Bayer Crop Science Ltd vs M/S Hpm Industries Ltd And Ors
2011 Latest Caselaw 2532 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%             Judgment Pronounced on: May 11, 2011

+      CS(OS) No. 1106/2010

BAYER CROP SCIENCE LTD                         ..... Plaintiff

                      versus

M/S HPM INDUSTRIES LTD AND ORS               ..... Defendants


Advocates who appeared in this case:

For the Plaintiff: Mr. Ali Naqvi, Mr. Abhishek Singh and Ms.
                   Ishani, Advs.

For the Defendant:        None

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may
   be allowed to see the judgment?                    No.

2. To be referred to the Reporter or not?             No.

3. Whether the judgment should be reported            No.
   in Digest?

V.K. JAIN, J. (ORAL)

1. This is a suit for recovery of Rs. 101, 53,984.13/-. The

plaintiff company used to supply the goods to the defendant

no. 1 company from time to time and the time for making

payment varied upto 90 days depending upon each purchase

order. A sum of Rs. 10462564/- was due to the plaintiff

company from defendant no. 1 company as on 1 st January,

2004. Between 14th May, 2004 to 30th August, 2004, the

plaintiff company supplied goods worth Rs. 63,30,841.76/-to

defendant no. 1 company, as a result of which liability of

defendant no. 1 company to the plaintiff company rose to Rs.

1,67,93,405/-. Out of the aforesaid amount of Rs.

1,67,93,405/-, the defendant no. 1 made payment of Rs.

1,12,77,844/-, through various cheques, leaving a balance of

Rs. 55,15,561.76/-.

2. On 14th May, 2005, the defendant company made

payment of Rs. 2 lakhs thereby reducing the outstanding

amount to Rs. 53,15,561/-. A criminal complaint was then

filed by the plaintiff company against the defendants. During

pendency of the complaint, the plaintiff company received

payment of Rs. 2 lakhs from the defendant company vide two

separate cheques of Rs. 1 lakh each one of which was credited

on 20th March, 2007 and the other on 10th April, 2007. The

liability of defendant company to the plaintiff company

thereupon came down to Rs. 51,15,561/-.

3. It is also alleged that in a revision application filed by

defendant nos. 2 and 3 against the order passed by the

learned Metropolitan Magistrate on 24th August, 2006 in a

criminal complaint filed by the plaintiff company, the liability

of Rs. 5,31,55,61.76 was admitted. Since the defendants have

failed to make payment of the balance amount of Rs.

51,15,561/-, the plaintiff has claimed the aforesaid amount

along with interest @ 18% per annum amounting to Rs.

50,38,422.37/-.

4. The defendants were proceeded ex parte on 21 st March,

2011 since they neither appeared nor filed written statement

despite service of summons on them.

5. The plaintiff company has filed an affidavit of Mr. K.K.

Jain by way of ex parte evidence. In his affidavit, Mr. K.K.

Jain has stated that between 14 th May, 2004 to 30th August,

2004, the plaintiff company supplied goods worth of Rs.

63,30,841.76/- to defendant company vide invoices which are

annexed in Exhibit P/2 (Colly). He has further stated that on

account of the aforesaid supply of goods, the total amount

payable to the plaintiff company increased to Rs.

1,67,93,405/-. According to him, the defendant paid a sum of

Rs. 1,12,77,844/- through various cheques and one payment

of Rs. 6,38,929/- was made vide cheque no. 063141. He has

further stated that the defendant remitted payment of Rs. 2

lakhs to the plaintiff company vide cheque dated 14 th May,

2005 thereby reducing the outstanding amount to Rs.

53,15,561/-. According to him, the plaintiff received a further

sum of Rs. 2 lakhs from the defendant through two cheques of

Rs. 1 lakh each, one of which was credited on 20 th March,

2007 and the other on 10th April, 2007.

6. Exhibit P/8 (Colly) is the statement of account for the

period from 1st January, 2004 to 31st December, 2004. A

perusal of this document would show that a sum of Rs.

1,04,62,564/- was payable by the defendant no. 1 company to

the plaintiff company on 1st January, 2004. The statement of

account coupled with the invoices by the plaintiff company

also shows supply of goods worth Rs. 63,30,841.76 between

14th May, 2004 and 30th August, 2004.

7. It would thus be seen that a principal amount of Rs.

55,15,561.76/- was due to the plaintiff company from the

defendant no. 1 company before payment of Rs. 2 lakhs was

received by it on 14th May, 2005. Since the plaintiff company

received Rs. 2 lakhs on 14 th May, 2005 and another sum of Rs.

2 lakhs during pendency of the criminal case, the principal

amount payable by defendant no. 1 to the plaintiff company

got reduced to Rs. 51,15,561/-, which has been claimed by

way of present suit.

8. Exhibit P/7 (Colly) is the copy of the Revision Application

No. 130/2008 filed by the defendant nos. 2 and 3 who are the

Directors of defendant no. 1 company. In para 6(f) of the

criminal revision application, the defendant nos. 2 and 3

expressly admitted that a sum of Rs. 53,15,561.76/- was

payable to the plaintiff company and they were trying to clear

it despite their dues having not been paid by the Government

of Andhra Pradesh. It appears that while filing this revision

application, the defendant nos. 2 and 3 did not take into

account the payment of Rs. 2 lakhs made to the plaintiff

company during the pendency of the criminal proceedings.

Thus, there is an admission of liability made by the Directors

of defendant no. 1, in the criminal revision application filed by

them. Defendant No.1 has also admitted its liability to pay to

the plaintiff, vide its letters dated 27.11.1994, 3.1.2005,

16.2.2005 & 31.3.2005, though the precise amount payable to

the plaintiff company has not been indicated in these letters.

9. It has come in evidence that payment of Rs. 6,38,928/-

credited to the account of the plaintiff on 16th August, 2004

was received by cheque. The payment of Rs. 2 lakhs received

on 14th May, 2005 was also by cheque and so were the two

payments of Rs. 1 lakh each received during the pendency of

the criminal proceedings. In view of the provisions contained

in Section 19 of the Limitation Act, a fresh period of limitation

starts from the date these payments were made. These part

payments were made at the time when the debt had not

become time barred.

The admission of liability made in the criminal revision

application constitutes acknowledgment of liability within the

meaning of Section 18 of the Limitation Act and a fresh period

of limitation starts from the date acknowledgment was made.

Though the date of filing of the criminal revision application

has not been given by the plaintiff, a perusal of the copy filed

by the plaintiff would show that it was drafted in September,

2007. Obviously, it would have been filed in or after

September, 2007. Since part payments made on 16 th August,

2004 and 14th May, 2005 had earlier extended the period of

limitation, the acknowledgement in September, 2007 was also

within the prescribed period of limitation. Having been filed on

28th May, 2007, if the period of limitation is computed even

from 1st September, 2007, the suit is well within the prescribed

period of limitation. I, therefore, hold that the plaintiff is

entitled to recover the principal amount of Rs. 51,15,561.76/-

from the defendant.

10. The plaintiff has claimed interest @ 18% per annum.

There is no written agreement between the parties for payment

of interest. No usage of trade or customs for payment of

interest has been pleaded or proved. However, since this is a

suit for price of goods sold and delivered, interest can be

awarded to the plaintiff under Section 61(2) of the Sale of

Goods Act. Considering the nature of the transactions

between the parties, I am of the view that interest under

Section 61(2) of the Sale of Goods Act should be awarded at

the rate of 12% per annum. The amount of interest computed

@ 12% comes to Rs. 33,58,948.25/-. The total amount

payable by defendant no. 1 to the plaintiff company thus

comes to Rs. 84,74,510.01/-.

11. The decree for recovery of Rs.84,74,510.01 with

proportionate costs and pendente lite and future interest @

12% per annum is passed in favour of the plaintiff and against

defendant no. 1 only.

Since the goods were supplied to a company and

defendant nos. 2 and 3 were not the guarantors for the

payment to be made by the defendant no. 1, the plaintiff is not

entitled, in law, to recover amount from defendant nos. 2 and

3. The suit against defendants no. 2 & 3 is therefore

dismissed without any order as to costs.

The decree sheet be drawn accordingly.

(V.K. JAIN) JUDGE MAY 11, 2011 Sd