M/S Yadav Flour Mills P.Ltd vs M/S Globus Agronics Ltd
2008 Latest Caselaw 2239 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                Date of Order : December 12, 2008


+                  RFA 444/2005


M/S YADAV FLOUR MILLS P.LTD            ..... Appellant
              Through: Mr. Rajesh Yadav, Advocate


                                versus


M/S GLOBUS AGRONICS LTD            ..... Respondent
             Through: Mr. Raman Kapur, Advocate


CORAM:

Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R. Midha

1. Whether reporters of local papers may be allowed
   to see the judgment?

2. To be referred to the Reporter or not?

3. Whether judgment should be reported in Digest?


: PRADEEP NANDRAJOG, J. (Oral)

1. Appellant had filed a suit for recovery of

Rs.6,63,640/- (Rupees Six Lacs Sixty Three Thousand Sixty

Hundred Forty only) alleging that it had been supplying Bajra

Atta to the respondent and one of its units, namely Haryana

Organics, and pertaining to the supplies delayed payments

were received due to which interest in sum of Rs.4,43,142/-

(Rupees Four Lacs Forty Three Thousand One Hundred Forty

Two only) and Rs.1,64,698/- (Rupees One Lac Sixty Four

Thousand Six Hundred Ninety Eight only) had accrued.

Additionally it was pleaded that as per agreement between the

parties if the empty gunny bags were not returned price

thereof @ Rs.12/- per bag was payable. Rs.30,276/- (Rupees

Thirty Thousand Two Hundred Seventy Six only) and

Rs.25,524/- (Rupees Twenty Five Thousand Five Hundred

Twenty Four only) as the price of unreturned gunny bags was

prayed to be decreed.

2. The respondent took a stand in the written

statement that on 10.2.1999 a settlement was arrived at

evidenced by Ex.D-2 that pertaining to the supplies at Haryana

Organics in full and final settlement Rs.4,66,902.28 (Rupees

Four Lacs Sixty Six Thousand Nine Hundred Two and paise 28

only) was payable and was paid. Pertaining to the supplies

effected on the respondent it was pleaded that vide Ex.D-1 on

13.4.1999 in full and final settlement Rs.2,00,000/- (Rupees

Two Lacs only) was payable for which the payment was made.

3. At the trial appellant sought to sustain the claim

with respect to a cheque in sum of Rs.4,00,000/- (Rupees Four

Lacs only) payment whereof was stopped. The cheque was

dated 1.2.1999.

4. The respondent sought to explain its action by

stating that a post dated cheque was issued but in view of the

settlement no amount was payable and hence payment was

stopped pertaining to the said post dated cheque.

5. Learned Trial Judge has returned a finding that Ex.D-

1 and D-2 do not bear the signatures of the appellant and

hence the writing thereon that the payments are towards full

and final settlement of the accounts does not bind the

appellant. Thus, the said documents have not been held to be

proved of a full and final settlement.

6. But, noting that there was no contract between the

parties to pay interest nor was any custom or market practice

proved nor was any notice demanding interest served, finding

returned is that no interest was payable on the delayed

payments.

7. Suit pertaining to recompense for gunny bags not

returned has been decreed in sum of Rs.55,800/- (Rupees Fifty

Five Thousand Eight Hundred only).

8. The appellant i.e. the plaintiff wants more i.e. the

interest on delayed payments.

9. Learned counsel for the appellant urges that the

logical corollary of the finding returned by the learned Trial

Judge that Ex.D-1 and D-2 do not evidence a full and final

settlement requires the claim to be decreed, if not in full, at

least in the sum of Rs.4,00,000/- (Rupees Four Lacs only) being

the cheque admittedly issued on 1.2.1999 payment whereof

was stopped.

10. We do not find any force in the said contention for

the reason merely because the defendant i.e. the respondent

could not prove that Ex.D-1 and D-2 recorded a full and final

settlement; plaintiff i.e. the appellant had to stand on its own

legs to prove entitlement to interest. We note that Ex.D-1 and

Ex.D-2 are vouchers of the respondent when payment was

made but do not bear the signature of any representative of

the appellant and hence the finding returned by the learned

Trial Judge that the writing thereon does not bind the appellant.

11. There is no evidence on record that from time to

time, the appellant raised debit notes pertaining to the interest

which appellant was crediting in its account books against the

respondent.

12. Learned counsel for the appellant concedes that

there is no written contract pertaining to payment of interest

but urges that the orders record a term; being that payment

would be made after five days. Counsel urges that some

meaning has to be given to the said term and that the only

meaning could be that if not made within a reasonable period

of five days the same shall carry interest.

13. Liability to pay interest has two elements. First, the

liability to pay the interest, and second, the rate at which

interest has to be paid.

14. Assuming that the clause means that money has to

be paid within a reasonable period; but if not so paid, at what

rate interest has to be paid? We are left guessing.

15. We find that there is no evidence of market practice,

custom or usage pertaining to payment of interest.

16. Under the Interest Act 1978, interest is payable

under three contingencies: (a) contract, (b) market practice or

custom and (c) upon proof of notice demanding interest.

17. The first two heads are missing. Pertaining to the

third, the only notice demanding interest is Ex.P-31 dated

19.5.1999, a date admittedly much after the principal amounts

were paid.

18. Pertaining to the plea of the appellant that the

cheque in sum of Rs.4,00,000/- (Rupees Four Lacs only) dated

1.2.1999 evidences a liability to pay at least Rs.4,00,000/-,

(Rupees Four Lacs only) suffice would it be to state that the

respondent has successfully established that the cheque was

issued post dated and that no further amount was payable

when Ex.D-1 and D-2 were drawn by it.

19. Though Ex.D-1 and D-2 record that the payment

tendered are towards full and final payment but since the

appellant has not signed the same the said writing cannot bind

the appellant. However, the fact of the matter remains that

the cheque dated 1.2.1999 was sent for encashment

somewhere in the month of July 1999. It probablizes the fact

that the same was issued as a post dated cheque to be used if

required.

20. Be that as it may, we prefer to adopt the safer route

and determine whether interest was at all payable on late

payments.

21. As noted herein finding returned is none was

payable.

22. We find no merits in the appeal.

23. Dismissed.

24. No costs.

PRADEEP NANDRAJOG, J.

J.R.MIDHA, J.

DECEMBER 12, 2008 rk