Delhi High Court
Liugong India Pvt Ltd vs Yograj Infrastructure Ltd & Ors on 8 February, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 8th February, 2018.
+ CS(OS) 3318/2012
LIUGONG INDIA PVT LTD ..... Plaintiff
Through: Mr. Gulshan Chawla, Adv.
versus
YOGRAJ INFRASTRUCTURE LTD & ORS ....Defendants
Through: Mr. Faisal Zafar, Adil Khan and Mr.
Vikas Sharma, Advs. For D-1 to 3.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.
The plaintiff has instituted this suit for recovery of principal amount
of Rs.1,03,50,000/-, being the unpaid price of the machinery supplied by
the plaintiff to the defendant no.1 and of which defendants no.2 to 4
namely Yogendra Singh, Ritu Singh and Ram Lal Jharia are described in
the memo of parties and in the plaint as Directors. The plaintiff, in
accordance with the clause on the invoices raised on the defendant no.1,
has also claimed interest @ 24% per annum for the period prior to the
institution of the suit, from the date of the invoices till the date of
institution of the suit. Hence the suit for recovery of Rs.1,56,48,380/- with
future interest and costs.
2. Only the defendants no.1 to 3 contested the suit by filing a written
statement and to which a replication was filed by the plaintiff. None
appeared for defendant no.4 Ram Lal Jharia. The counsels, on enquiry state
that the defendant no.4 was sought to be served at the address of the
defendant no.1 only and the defendant no.1 has filed an affidavit to the
effect that the defendant no.4 ceased to be a Director of the defendant no.1
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in the year 2007 i.e. much prior to the dates when the transaction subject
matter of the suit took place. The counsels on further enquiry also state that
there is no order proceeding ex parte against the defendant no.4 till now.
3. On the pleadings of the plaintiff and the defendants no.1 to 3, the
following issues were framed in the suit on 22nd July, 2014:-
"1. Whether the machinery supplied by the Plaintiff was
of inferior quality as claimed by the Defendants? If
so, what was its effect? OPD.
2. Whether the Plaintiff agreed to receive the amount
due to the Plaintiff in instalments without interest as
claimed by the Defendants? OPD.
3. Whether the Defendants No.2 to 4 are jointly or
severally liable to pay the amount?
4. To what amount, if any, the Plaintiff is entitled to
recover from the Defendants? If so, whether the
Plaintiff is entitled to any interest and what interest?
5. Relief:"
4. The parties have led their evidence, with each of the parties having
examined one witness and the suit is ripe for final hearing.
5. The counsel for the plaintiff and the counsel for the defendants no.1
to 3 have been heard.
6. The plaintiff, on the evidence led, has proved sale and supply of
machines of the total value of Rs.1,56,57,000/- to the defendant no.1 and
sale, supply and delivery whereof is supported by 'C' Form under the
erstwhile Sales Tax law issued by the defendant no.1 to the plaintiff. It is
also not in dispute that the defendant no.1 has paid only a sum of
Rs.53,07,000/- leaving the balance of Rs.1,03,50,000/-.
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7. I have thus asked the counsel for the defendants no.1 to 3, what is the
defence in this respect.
8. The counsel for defendants no.1 to 3 has drawn attention to the pleas
taken in the written statement and on which issues aforesaid were framed
but which as aforesaid are found to have been proved in favour of the
plaintiff. Though the defendants took a plea of the machinery being of
inferior quality and of an Agreement with the plaintiff of payment of price
thereof in instalments, but have utterly failed to prove the same and the said
pleas are found to be falsified from the contemporaneous conduct of
issuance of cheques and confirmation of balance.
9. Issues no.1 & 2 aforesaid are thus decided in favour of the plaintiff
and against the defendants.
10. However, with respect to issue no.3, the counsel for the defendants
no.1 to 3 has argued that the defendants no.2 to 4, merely on account of
being the Directors of the defendant no.1 which is a juristic entity and a
body corporate, do not become personally liable for the debts of the
defendant no.1. On enquiry, it is stated that there is no case pleaded or
proved of piercing of corporate veil of the defendant no.1.
11. The counsel for the plaintiff also on enquiry merely states that the
defendant no.2 was signing all documents and dealing with the plaintiff and
the said fact is not disputed.
12. A company, being a juristic entity, has to necessarily act through
natural persons and we are still far from the day when such juristic entities,
with the assistance of Artificial Intelligence will enter into contracts
without acting through natural persons. Thus, merely because a natural
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person has acted on behalf of a juristic entity like a company will not make
such natural person personally liable for the debts of such juristic entity.
Reference if any required in this context can be made to V.K. Uppal Vs.
Akshay International Pvt. Ltd. 2010 SCC OnLine Del 538 and Anirban
Roy Vs. Ram Kishan Gupta MANU/DE/3524/2017.
13. Issue no.3 is thus decided against the plaintiff and in favour of the
defendant no.2 to 4.
14. With respect to the aspect of interest, the counsel for the defendants
no.1 to 3 has contended that the interest claimed @ 24% per annum is
excessive. It is however proved and not disputed that the invoices
contained a clause for payment of interest at the said rate and no protest
was made with respect thereto and in fact the price was sought to be paid
by cheques which were dishonoured.
15. In this view of the matter, I am of the view that for the pre-suit
period, the plaintiff is entitled to the contractual rate of interest for the
reason of the transaction between the parties being a 'commercial' one.
However considering the prevalent rates of interest paid on fixed deposits
in the contemporaneous time, the plaintiff is found entitled to future
interest at 9% per annum.
16. The counsel for the defendants no.1 to 3 has drawn attention to the
payment plan Agreement dated 2nd May, 2011 filed by the plaintiff itself
and whereunder the plaintiff had agreed to payment by the defendant no.1
of the balance price, then of Rs.1,16,50,000/- in instalments, till 30th March,
2012. The counsel for the defendants no.1 to 3 thus contends that the
liability for interest for the pre suit period would be w.e.f. 1 st April, 2012.
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17. The counsel for the plaintiff states that the plaintiff nowhere in the
said Agreement superseded the clause in the invoices for payment of
interest.
18. Undoubtedly so; however a reading of the entire Agreement shows
the intent of the plaintiff to accommodate the defendant and to not claim
any interest till then.
19. Thus, the claim of the plaintiff for interest at 24% per annum can
only be w.e.f. 1st April 2012 till the date of institution of the suit.
20. Issue no.4 is decided accordingly.
21. A decree is accordingly passed in favour of the plaintiff and against
the defendant no.1 only, for recovery of Rs.1,03,50,000/- with interest at
24% per annum from 1st April, 2012 till the date of institution of the suit
and at 9% per annum w.e.f. the date of institution of the suit till the date of
realisation/payment. The plaintiff shall also be entitled to costs of the suit.
The suit, insofar as against the defendants no.2 to 4 is dismissed.
22. Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J
FEBRUARY 08, 2018
'pp'..
CS(OS) 3318/2012
