Ifci Factors Ltd. vs Vasudev Rao & Anr.
2014 Latest Caselaw 2238 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                     Date of Decision : May 02, 2014
+                        FAO(OS) 214/2014
      IFCI FACTORS LTD                                  ..... Appellant
                Represented by:       Ms.Anjali Sharma, Advocate

                                      versus

      VASUDEV RAO & ANR                                  ..... Respondents
              Represented by:         None

CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE JAYANT NATH

PRADEEP NANDRAJOG, J. (Oral)

CM No7757/2014 Allowed subject to just exceptions.

FAO (OS) No.214/2014

1. It is trite that a liquidated demand has to be concerning an amount which can be made certain by mathematical calculations from factors which are or ought to be in possession or knowledge of the party to be charged. It must thus exclude demands which need to be quantified after determining disputed facts.

2. Keeping in view the aforesaid principle of law, we see no reason to interfere with the impugned order dated March 21, 2014 whereunder it has been held that appellant's suit is not maintainable under Order XXXVII of the Code of Civil Procedure.

3. The suit has been filed on the plea that a company Cheminnova

Remedies Pvt. Ltd. was granted Domestic Sales Bill Factoring Facility by the appellant with a limit of `5,00,00,000/- (Rupees Five Crores only) and that as per the books of accounts maintained by the appellant `1,78,19,565.63 (Rupees One Crore Seventy Eight Lakhs Nineteen Thousand Five Hundred Sixty Five and Paisa Sixty Three only) was payable by the said company. Since interest was payable under the Domestic Sales Bill Factoring Facility @ 14.5% per annum (being the discount charges) with further 4% penal charges for late payment, the amount payable by the company was `1,92,63,467.81 (Rupees One Crore Ninety Two Lakhs Sixty Three Thousand Four Hundred Sixty Seven and Paisa Eighty One only). So pleading, suit was instituted against the two guarantors only on the plea that it is settled law that liability of the guarantors is co-extensive with that of the principal.

4. The learned Single Judge has correctly opined that being based on a statement of account the suit is not one for recovery of a liquidated demand.

5. A feeble attempt is made to urge that the principal had issued cheques totalling `1,78,19,565.63 (Rupees One Crore Seventy Eight Lakhs Nineteen Thousand Five Hundred Sixty Five and Paisa Sixty Three only) and these cheques have to be treated as a written acknowledgment and co-extensive liability fastened on the guarantors in relation thereto and hence the suit would be maintainable under Order XXXVII of the Code against the two guarantors.

6. It may be true that there is a reference in the plaint that the principal debtor had issued cheques which were dishonoured, but no details thereof have been pleaded. In any case, the suit is categorically premised with reference to the principal sum payable as per the statement of accounts.

With respect to the cheques issued by the principal debtor, the only pleadings are in paragraph 7 of the plaint which reads as under:-

"7. The plaintiff submits that however, not only have the approved debtors failed to pay the amounts due, the borrower, Cheminnova Remedies Pvt. Ltd. has defaulted as well in rendering the payment owing to the plaintiff. In fact, the cheques issued by the borrower in purported repayment of the plaintiff's dues, have been dishonoured upon presentment, and the plaintiff has been constrained to file complaints under Section 138 of the Negotiable Instruments Act against the borrower and against its directors. It is pertinent that the accused have been summoned. Furthermore, the plaintiff has also filed a winding up petition against the borrower on account of its inability to pay its debts. The said petition is pending adjudication before the Hon'ble High Court of Andhra Pradesh at Hyderabad."

7. Suing against the guarantors with reference to the debt of the principal, the averments in paragraph 7 of the plaint do not bring out that the demand would be a liquidated demand with reference to the cheques. We would have appreciated if in the plaint the pleadings made a reference to the various cheques and their amount with further pleading that the total of the said cheques was `1,78,19,565.63 (Rupees One Crore Seventy Eight Lakhs Nineteen Thousand Five Hundred Sixty Five and Paisa Sixty Three only). It could then possibly have been urged that the suit was on a liquidated demand. But, as pleaded, the suit is clearly premised on a statement of account which has not been acknowledged by the principal debtor or the guarantors.

8. Pleadings in a summary suit have to be construed strictly for the reason an otherwise valuable right recognized by law that every person has a right to defend a proceedings initiated against him is curtailed by a summary

suit because of business efficacy requiring that in commercial transactions of the kind envisaged by Order XXXVII a defendant must obtain leave to defend by prima facie pleading facts which if proved would non-suit the plaintiff.

9. The appeal is dismissed in limine but without any orders as to costs.

(PRADEEP NANDRAJOG) JUDGE

(JAYANT NATH) JUDGE MAY 02, 2014 mamta