Maharashtra Apex Corp. Ltd. vs Svc Superchem Ltd.
2005 Latest Caselaw 246 Del

JUDGMENT

Pradeep Nandrajog, J.

1. Suit is under Order 37 of the Code of Civil Procedure. Decree in sum of Rs.90,30,937/- is prayed for. Basis of the same claim is as under:-

  1. Principle amount as per agreement  Rs.62,00,000/-     dated 21.6.1999
2. Interest @ 24% p.m. from           Rs.28,30,934/-    1.1.2000 to 25.11.2001
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                                Total Rs.90,30,937/-
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2. Pendente lite and future interest @ 24% p.a. from 26.11.2001 on principal sum of Rs.62,00,000/- is prayed for.
 

3. Suit is based on a written agreement dated 21.6.1999.
 

4. Agreement records that the defendant had taken on hire purchase certain equipment and machinery vide hire purchase agreement No.007984 dated 30.10.1995 and hire purchase agreement No.007985 dated 26.10.1995. Equipment hired/leased was from the plaintiff. Agreement dated 21.6.1999 also refers to a loan agreement No.007267 dated 30.9.1996 between the parties.

5. Agreement records that a sum of Rs.2.90 crores is payable by the defendant to the plaintiff.

6. Regarding the recitals afore-noted agreement dated 21.6.1996 inter alia records the following:-

(i) That the plaintiff, as a special concession has agreed to receive a sum of Rs.162 lacs in satisfaction of the claim of Rs.2.9 crores under the various agreements noted in the recital.

(ii) That the amount of Rs.162 lacs will be paid in two Installments being Rs.100 lacs at the time of execution of the agreement dated 21.6.1999 and Rs.62 lacs payable on or before 31.12.1999.

7. Agreement dated 21.6.1999 requires the plaintiff to comply with certain formalities when sum of Rs.100 lacs is received. Formalities required to be completed are in clause 2 of the agreement. It is as under:-

2. The party of the second part undertakes to take following actions on receipt of the first Installment of Rs.100 lacs from the party of the first part:

(a) Return all the PDCs issued by the party in the first part to the party in the second part vide HP agreements and demand loan agreement referred to above which are still in the possession of party of the second part.

(b) Transfer machinery provided on HP Agreement to the first party under agreement no.007984 dated 30/10/95 viz., Demineralizing water plant complete with accessories in accordance with Clause V of the HP Agreement and thus the HP agreement no. 007984 dated 30/10/95 will stand terminated by settlement. Together with the release of machineries under HP Agreement dated 30/10/95 the DL account dated 30/09/96 will also stand closed.

(c) Take immediate steps to withdraw all legal cases/processes initiated against party in the first part by filing urgent applications for withdrawal of cases. The process of withdrawal of all the cases is to be completed within 60 days of the signing of this agreement and all cheques issued in court in support of these cases are to be withdrawn and returned to party in the first part within 60 days of signing of this agreement subject to release of the same from respective honorable courts.

(d) Party of the second part undertakes not to file any fresh legal proceedings against the party of the first part unless they commit a default in relation to its obligation of this agreement."

8. As per the plaintiff, on receipt of Rs.100 lacs it has complied with the agreement dated 21.6.1999. Since defendant has not paid the sum of Rs.62 lacs, plaintiff seeks recovery.

9. Clause 7 of the agreement stipulates that in case of default, interest would be payable by the defendant at the rate of 24% p.a.

10. In the application seeking leave to defend it is inter alia, urged in support of the defense and grounds shown entitling defendant for leave to defend that:-

(a) Hire purchase agreements contain an arbitration clause and confer exclusive jurisdiction on the course at Udupi to adjudicate all disputes under the agreements.

(b) Plaintiff has not fulfillled its part of the obligation under the agreement dated 21.6.1999 and hence was not entitled to receive, much less recover sum of Rs.62 lacs from the defendant.

11. On the first ground on which leave to defend is sought, decision of Division Bench of this court M/s Jindal Aromatics Vs. M/s South East Spices Pvt. Ltd. be noted. Taking note of the decision M/s Vasanji Navji & Co. Vs. M/s K.P.C.Spinners & Ors., , Roopak Bambha Vs. K.C.Bhandari and 2nd (1986) 1 Delhi 382 M/s Saraswati Industrial Syndicate Ltd. Vs. M/s Apolo Tyres Ltd., in para 23, the Division Bench held as under:-

23. The legal position which emerges from the aforesaid judgment is that an accord discharges the performance of obligations under the contract. A dispute pertaining to satisfaction furnishes a fresh and independent cause of action, until and unless it is provided that the performance of the satisfaction was a condition precedent for discharge under the contract. If promise is received in satisfaction, it is a good satisfaction, but if the performance and not the promise is intended to operate in satisfaction, then there will be no satisfaction without performance. Wherever there is an accord, obligations under the original contract would be discharged until and unless it is specifically provided that the performance of the satisfaction would discharge the obligations under the contract.

12. In the context of the law aforesaid, it has to be noted that the agreement dated 21.6.1999 was in supersession of 3 earlier agreements between the parties, duly noted in the recital. Parties were bound in its entirety to the agreement dated 21.6.1999. All reciprocal obligations of the parties stood confined to the agreement dated 21.6.1999. Previous agreements were superceeded.

13. The first ground on which leave to defend is predicated is accordingly rejected, being frivolous and contrary to the agreement dated 21.6.1999.

14. On the issue whether the plaintiff has complied with Clause 2 of the agreement dated 21.6.1999 or not, pleas of the defendant are contained in paras 9 and 10 of the application seeking leave to defend. The same reads as under:-

"9. That since the plaintiff has failed to fulfilll their part of obligation purchased in the Agreement dated 21.6.2002 and defaulted on their part because they have not returned the three cheques of the defendant company as stipulated in the Agreement despite the fact that the defendant has made the payments of rupees one crore in accordance with the Agreement. Plaintiffs are not entitled to any amount as claimed by them in the present suit for recovery.

10. The non-performance of the terms and conditions of the Agreement dated 21.6.2002 by the plaintiff company renders the Agreement ineffective and unenforceable and defendant are not under any obligation to pay any thing further to plaintiff. The claim of the plaintiff for the balance of above referred three Hire Purchased Agreements is time barred and no decree can be passed in favor of the plaintiff for the suit amount."

15. Reply of the plaintiff is as under:-

"9. That the contents of para 9 of the application are wrong, incorrect and hence denied. It is denied that the plaintiff has failed to fulfilll their part of the obligation as per the agreement dated 21.6.99. It is denied that the plaintiff has defaulted on their part as alleged. It is submitted that as per the said agreement the plaintiff duly withdrew the cheques in question from the court which were lying in the court files of the criminal complaints under section 138 Negotiable Instruments Act and vide their letter dated 20.11.99 informed the defendant about the same to the defendant and called upon the defendant to exchange the said cheques with a cheque of Rs.62 lacs but no response was received by the plaintiff to the same from the defendant. It is submitted that the defendant again refused to make the payment of the balance dues as per the agreement dated 21.6.99. Plaintiff is entitled to the said amount of Rs.62 lacs Along with interest.

10. That the contents of para 10 of the application are, incorrect and hence denied. It is denied that the plaintiff has not performed any obligation as per the terms and conditions of the agreement dated 21.6.2002. As such there is no occasion for the alleged non performance to render the agreement ineffective and unenforceable. It is denied that the defendant are not under any obligation to pay any amount to the plaintiff. It is denied that the claim is for the balance of the said hire purchase agreements. It is denied that the claim is time barred or that no decree can be passed in favor of the plaintiff for the suit amount. The claim of the plaintiff is within limitation. The said claim is based on the agreement dated 21.6.99 and the present suit was filed in December, 2001, within the period of limitation. As submitted above the plaintiff is entitled to a decree for the suit amount Along with pendentlite and future interest forthwith. The contents of preceding paras may kindly be read as part and parcel of this para as the same are not being repeated herein for the sake of brevity."

16. Learned counsel for the defendant sought to argue that there is complete default by the plaintiff in compliance of various obligations under Clause 2 of the agreement dated 21.6.1999. Counsel for the plaintiff urged that the defendant, while seeking leave to defend has urged only one alleged non-compliance, being the default on the part of the plaintiff to return the cheques as stipulated in the agreement. Counsel for the plaintiff urged that as stated in the reply to the defendants application seeking leave to defend, plaintiff withdrew the cheques from the criminal courts where proceedings under Section 138 of the Negotiable Instruments Act were initiated and vide letter dated 20.11.1999 informed the defendant about the same and called upon the defendant to tender second Installment of Rs.62 lacs on or before 31.12.1999 and received the cheques issued by the defendant earlier.

17. Since pleading of the defendant is restricted on the issue of return of 3 cheques, defendant cannot be permitted to urge at the hearing any other alleged default.

18. Counsel for the plaintiff had shown at the hearing the cheques which were taken back by the plaintiff from the concerned criminal courts where proceedings under Section 138 of the Negotiable Instruments Act were pending. Learned counsel for the plaintiff, though not required to show, showed to this court that the plaintiff had withdrawn the criminal complaints lodged by it under Section 138 of the Negotiable Instruments Act.

19. The defense raised is a complete farce. It is frivolous. Written agreement dated 21.6.1999 has been admitted by the defendant. No case is made out for grant of leave to defend for the reason no friable issue has been shown by the defendant as would need any trial. IA NO.7780/2002 is dismissed with costs in the sum of Rs.25,000/- in favor of the plaintiff and against the defendant.

CS(OS) NO. 76/2002

20. In view of the dismissal of IA NO.7780/2002, suit filed by the plaintiff is decreed as prayed for. A decree in the sum of Rs.90,30,937 is passed in favor of the plaintiff and against the defendant. Plaintiff would be entitled to interest @ 24% p.a. from 26.11.2001 on sum of Rs.62,00,000/- till date of decree and would also be entitled to future interest at same rate from date of decree till date of realization.

21. Costs shall follow in favor of the plaintiff and against the defendant.