M/S Wh Wintech Pvt. Ltd. vs M/S Orchid Infrastructures And ...
2012 Latest Caselaw 2108 Del

*         HIGH COURT OF DELHI: NEW DELHI

%                                            Order decided on: 28.03.2012

+              R.A. No.135/2012 in CS(OS) No.3330/2011


       M/S WH WINTECH PVT LTD                  ..... Plaintiff
                    Through   Mr. Rajeshwar Rao, Mr. Anand
                              K. Mishra & Ms. Manini Barar,
                              Advs.

                       versus


       M/S ORCHID INFRASTRUCTURES AND DEVELOPERS PVT
       LTD                                ..... Defendant
                     Through None

CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (ORAL)

1. The plaintiff has filed the present suit under Order XXXVII CPC for recovery of Rs.97,59,189/-. The claim of the plaintiff is based on the amounts due for supply of the material which is claimed at Rs.56,73,947/- along with interest @ 24% per annum on the said amount till the date of filing of the suit which comes to Rs.40,85,242/-.

2. The suit was listed before the Joint Registrar on 21.01.2012 who issued summons in the suit by treating the same as an ordinary suit. The reasons given in the order were that there is no agreement between the parties ascertaining the rate of interest. Thus, the suit under Order XXXVII

R.A. No.135/2012 in CS(OS) No.3330/2011 Page No.1 of 6 CPC is not maintainable, though the summary suit filed by the plaintiff for recovery of liquidated demand of money based on a contract is maintainable.

3. The said order was challenged by the plaintiff in Chamber Appeal being O.A. No.14/2012. Notice of the said appeal was issued for 28.03.2012. Later on, the Review Application being R.A. No.135/2012 has been filed by the plaintiff who stated that no notice was required to be issued to the defendant in the appeal, as the order passed by the Joint Registrar is contrary to the law and in appeal this Court has, at this stage, only to examine the validity of order. The second point raised by the learned counsel for the plaintiff is that no separate agreement with regard to ascertaining the rate of interest is required as per the settled law.

4. The first issue raised by the plaintiff has been dealt by this Court in the following cases:-

(i) Khera Handloom Supply vs. O.B. Exports & Ors., reported in 41 (1990) DLT 343, the relevant para reads as under:-

"4. I have heard arguments advanced by learned counsel for the parties and have given my careful consideration to the points urged at the bar. So far as the aspect of proper service of the defendants is concerned, I am of the view that the defendants in this respect cannot be heard."

(ii) M/s. Tata Finance Ltd. vs. Viniyoga International Ltd. & Ors., reported in 79 (1999) DLT 342 (DB), the relevant para reads as under:-

"5. Having perused both the Bills of Exchange in question, covering letters annexed thereto and also the

R.A. No.135/2012 in CS(OS) No.3330/2011 Page No.2 of 6 averments made in the plaint, we are of the view that the suit, out of which the present appeal arises, is prima facie maintainable under Order XXXVII CPC. Without touching the merits of the submissions referred to above, we are also of the opinion that in the facts and circumstances of the case, at the stage of issuing summons, the questions which have been dealt with in the impugned order, ought not to have been gone into by the Single Judge and the order under appeal thus deserves to be set aside."

5. On second issue, as to whether the suit filed by the plaintiff is maintainable in the absence of specific clause of interest in the contract, the same judgment Khera Handloom Supply (supra) has been relied upon, in which it has been held as under:-

"......I may then deal with the other submissions made in this affidavit regarding interest. It is provided in Order 37 of the Code itself that it applies to suits upon Bills of Exchanges, Hundies and Promissory notes. It also applies when the plaintiff seeks only to recover the debts or liquidated demand in money payable by defendants with or without interest arising on a written contract or on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty. This order also applies to action based on guarantees where the claim against the Principal is in respect of a debt or liquidated demand only. It does not Mate at all that before a plaintiff is entitled to recover interest, there must be a written agreement between the parties that interest is payable at a certain specific rate As is clearly stated in this sub- rule, the suits can also be filed on the basis of promissory notes. The promissory note is defined as follows in the Negotiable Instrument Act, 1881. "A promissory note is an instrument in writing (not being a bank note or a currency note) containing an un-

R.A. No.135/2012 in CS(OS) No.3330/2011 Page No.3 of 6 conditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument". Some illustrations then are given under this definition contained in Section 4. "I promise to pay B or order Rs.500/-" is an illustration appended with this Section. A bare perusal of the above form of the promissory note clearly shows that the promissory note may not even contain an agreement between the parties to pay interest. However, it is a matter of common knowledge that generally promissory notes are executed between the parties which contain a promise to pay interest also at a certain rate. But that would not mean that a promissory note which does not contain any such promise to pay interest would not fall within the ambit of a promissory note. Therefore, in a case under Order 37 of the Code which is based upon a promissory note, there seems to be no bar against a plaintiff prohibiting him from claiming interest as per the rate of interest prevalent in the market. Similarly suits are also filed on the basis of dishonoured cheques under Order 37 of the Code. The very from a cheque issued by a debtor to the creditor will convince anyone that it does not contain any column regarding payment of interest. It is only a promise or direction by a debtor to his bank to pay a certain fixed sum of money to his creditor. Can by any stretch of imagination it be said that in the absence of any agreement to pay interest, the plaintiff is debarred from claiming interest in a suit under Order 37 of the Code. I am of the view that there is nothing to indicate in the language of Order 37 of the Code which may disentitle the plaintiff to claim interest from the defendant. On the other hand it seems rather clear from a bare perusal of Order 37 Rule 1 Sub-rule (2) of the Code that summary suits under this order can be filed based on Bills of Exchange, Hundies and Promissory notes where there is even no promise to pay interest at a certain specified rate. Therefore, simply because there

R.A. No.135/2012 in CS(OS) No.3330/2011 Page No.4 of 6 was no agreement between the parties to pay interest at the specific rate of 18% per annum will not debar the plaintiff from filing a suit under Order 37 of the Code, In fact, in the circumstances such as prevailing in this case, the plaintiff will always be entitled to recover interest, the transaction in question being of a commercial nature. It is a matter of common knowledge that the rate of interest for procuring money for business these days is not less than 18% per annum. If after issuing of cheque the same is not honoured by the banker of the debtor, certainly the debtor will be liable to pay interest for having deprived the plaintiff of his money. That is why it is recognized in Section 34 of the Code that in so far as a decree is for the payment of money, the Court may order interest at such rate as the Court deems reasonable to be paid on the principal sum from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit. Proviso to this Section further says that where the liability in relation to the same arises out of a commercial transaction the rate of future or further interest may exceed 6% per annum but it shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which the monies are lent or advanced by a Nationalized bank in relation to commercial transactions. In the present case, therefore, the claim of the plaintiff regarding interest at the rate of 18% per annum is very reasonable, as loans by nationalized banks these days are not allowed below this rate."

6. The other judgment relied upon is in the case of M/s. Punjab Pen House vs. M/s. Samrat Bicycle Ltd., reported in AIR 1992 Delhi 1, in which it has been held as under:-

"...... Therefore, when the goods are supplied through a bill on certain terms and conditions duly agreed to

R.A. No.135/2012 in CS(OS) No.3330/2011 Page No.5 of 6 between the parties, there is no escape from the conclusion that it amounts to a written contract between the parties. Therefore, I am of the view that the suit is covered by cl. (2) sub-cl. (b) of O. 37 of the Code according to which the plaintiff seeks to recover a debt or liquidated amount in money payable by the defendant with or without interest arising on a written contract. Learned counsel for the plaintiff also tried to cover the present suit on the clause according to which recovery of a debt or liquidated money, with or without interest is based on an enactment. In view of the aforesaid conclusion by me that the suit is based on a written contract between the parties, I need not deal with this argument in this case."

7. In view of the settled law on this aspect, the appeal of the plaintiff is allowed. The order passed by the Joint Registrar, dated 21.01.2012 is set-aside.

8. The appeal is disposed of.

CS(OS) No.3330/2011 Issue notice to the defendant in the prescribed manner of Order XXXVII CPC, on filing of process fee and registered A.D. covers within two weeks, returnable before the Joint Registrar on 23.05.2012.

The date fixed by the Joint Registrar as 16.04.2012 stands cancelled.

MANMOHAN SINGH, J.

MARCH 28, 2012/ka

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