Delhi High Court
M/S The Motor & General Finance ... vs M/S Century Tubes Ltd. on 23 July, 2009
Author: S.Ravindra Bhat
22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
DECIDED ON: 23.07.2009
+ CS (OS) 1912/2000
M/S THE MOTOR & GENERAL FINANCE LIMITED ..... Plaintiff
Through: Mr. Sunil Magon, Advocate.
versus
M/S CENTURY TUBES LTD. ..... Defendant
Through: None.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
1.
Whether the Reporters of local papers YES
may be allowed to see the judgment?
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
S.RAVINDRA BHAT, J. (OPEN COURT)
% This is a summary Suit under provisions of Order-37 of Code of Civil
Procedure (CPC). The plaintiff claims a decree for the sum of
Rs.76,41,142/- (Seventy six lakhs forty one thousand one hundred forty two)
with interest @ 27% per annum pendente lite as well as future interest.
CS (OS)-1912/2000 Page 1
2. The previous orders disclose that unconditional leave was granted to
the Defendant No.2 on 13.09.2001. In the order made in I.A.-8420/2001 that
defendant filed a written statement and the matter proceeded thereafter.
During the later stage of the proceedings, plaintiff gave up his claim and
abandoned the Suit as against the second defendant.
3. The Punjab & Haryana High Court apparently had directed liquidation
of the first defendant company through its orders. The plaintiff, therefore,
sought leave under Section-446 of the Companies Act, to proceed with the
present Suit. The Punjab & Haryana High Court by its order dated
17.1.2003 granted the leave sought for in Company Petition No.260-
266/2002. The orders of this Court disclose that the Defendant No.1 was
served through the official liquidator sometime in 2005. The order dated
19.4.2006 discloses that the counsel for the defendant No.1 - through the
official liquidator appeared on that date. Thus, it is evident that the said
defendant No.1, although in liquidation, was aware of the Suit, since it had
been served with notice. No written statement or any pleading was,
however, made on behalf of the said defendant No.1. By the order dated
16.7.2009, said defendant was set down ex parte.
4. The plaintiff's case is that it is a non-banking finance company
incorporated in the Company's Act in Delhi which advances various credit
facilities including the facility of bill discounting to clients and customers.
The Suit refers to discounting of various bills mentioned to in paragraph-5,
CS (OS)-1912/2000 Page 2
by the plaintiff, aggregating to Rs.34,60,646/-. It is claimed that these bills
were drawn by defendant No.1 on defendant No.2, and who received the
benefits, as a part of the bill discounting facility. It is claimed that upon the
due date of the bills or hundis, as the case may be, the concerned defendant
failed to pay the amounts. In these circumstance, a sum of Rs.34,60,646/-
towards unpaid hundi has been claimed. The plaintiff submits that in
addition, an amount of Rs.41,80,496/- towards additional bill discounting
charges being the sum equivalent to 3% per month on the outstanding of
the amount actually received by the first defendant towards each of the
seven bills, is also payable. On these basic averments, the plaintiff
approached the Court for the reliefs claimed.
5. As noted earlier, the Defendant No.1, though in liquidation, has not
chosen to appear despite leave having been granted unconditionally. The
plaintiff has relied upon the documents, which are placed on the record,
being Exhibits P-5 to P-36 which are the original hundis along with the
invoices-cum-challans. It also alleges in the Suit that cheques tendered by
the first defendant were presented by it but were not honoured. The details
of these and the reasons why the amounts were not received are set out in
paragraph-8 of the Suit and also repeated in paragraph-10 of the affidavit
evidence of PW-1 Mr. R.K. Mittal, who has deposed on behalf of the
plaintiff. The cheques have been exhibited as Ex-P-37 to P-40. In support of
the claim, the plaintiff also relies upon registered AD notice, copies of which
along with the registered AD cards are marked as Ex. P-41 - P-44.
CS (OS)-1912/2000 Page 3
6. As is evident from the above narration, the Suit is based upon hundis
and negotiable instruments, which the first defendant had furnished to the
plaintiff. The plaintiff extended bill discounting facility where by a sum of
Rs.34,60,646/- was paid through cheques to the first defendant. The first
defendant is unable to return the said amount - evidenced by the cheques
which could not be honoured but were tendered by it to the plaintiff. In
support of the averments, the plaintiff has relied upon the testimony of Mr.
R.K. Mittal, its Vice-President. He was even cross-examined in the course of
this proceeding on 4.7.2007. However, nothing was elicited during the
course of the cross-examination to dislodge the testimony or veracity of
what was deposed by him.
7. In the circumstances, it is held that the plaintiff has been able to
substantiate its claim to the extent of Rs.34,60,646/-. However, no written
agreement or contract or any other document in support of the claim
towards additional discounting charges @ 3% per month totaling to Rs.
41,80,496/- has been placed on record. In the circumstances, the claim to
that extent cannot be upheld.
8. The plaintiff has claimed 27% interest per annum on the said
amounts. Although the plaintiff relies upon the condition spelt out in hundi,
the said rate of interest cannot be granted by the Court in view of express
provisions of law. The plaintiff would be entitled to reasonable interest, but
on the outstanding amounts which are commercial claims.
CS (OS)-1912/2000 Page 4
9. In the circumstances, Suit is decreed in the sum of Rs.34,60,646/-
with pendente lite and future interest @ 18 % per annum from the date of
the Suit till realization with costs, quantified @ Rs.50,000/-.
10. Suit is decreed in the above terms with costs; counsel's fee is
quantified at Rs.50,000/-.
S. RAVINDRA BHAT
(JUDGE)
JULY 23, 2009
/vd/
CS (OS)-1912/2000 Page 5
