Karnataka High Court
M/S Ascent Business & Consulting vs M/S Chetas Control Systems Pvt Ltd on 5 April, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF APRIL, 2024
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
R.F.A. No.241 OF 2017 (MON)
BETWEEN
1. M/S ASCENT BUSINESS & CONSULTING
NO.E-1107, JACARANDA,
BRIGADE MILLENNIUM, J P NAGAR
7TH PHASE, PUTTENAHALLI
BENGALURU-560078
A PROPRIETARY CONCERN
REPRESENTED BY ITS PROPRIETOR
MR NARENDRA KUMAR SARAWGI
2. MR NARENDRA KUMAR SARAWGI
PROPRIETOR
M/S ASCENT BUSINESS &
CONSULTING NO.E-1107
JACARANDA, BRIGADE
MILLENNIUM, J P NAGAR
7TH PHASE, PUTTENAHALLI
BENGALURU-560078
...APPELLANTS
(BY SRI GANAPATHI HEGDE, SENIOR COUNSEL FOR
SRI B G GOURAV MANDAPPA, ADVOCATE)
AND
M/S CHETAS CONTROL SYSTEMS PVT LTD
A COMPANY REGISTERED UNDER
2
THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
CHETAS HOUSE PLOT NO.1,
SURVEY NO.8+9 SIDDHATEK SOCIETY
NEAR PASHAN LAKE
PUNE-411021
ALSO HAVING ITS ADDRESS AT:
M/S CHETAS CONTROL SYSTEMS PVT LTD
NO.876, II CROSS, VIII MAIN
III PHASE, 3RD BLOCK
BASAVESHWARANAGAR
BANGALORE-560079
...RESPONDENT
(BY SRI. GURURAJ D M, ADVOCATE)
THIS RFA IS FILED UNDER SEC.96 R/W ORDER XLI RULE
1 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED
30.11.2016 PASSED IN OS NO.7680/2009 ON THE FILE OF THE
XLI ADDL., CITY CIVIL JUDGE, BENGALURU (CCH NO.42),
DISMISSING THE SUIT FOR RECOVERY OF MONEY AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 27.3.2024, COMING ON FOR PRONOUNCEMENT
OF JUDGMENT, THIS DAY, POONACHA. J., DELIVERED THE
FOLLOWING:
JUDGMENT
The present first appeal is filed by the plaintiff under
Section 96 of the Code of Civil Procedure, 19081
challenging the judgment and decree dated 30.11.2016
passed in OS No.7680/2009 by the XLI Additional City Civil
Hereinafter referred to as the 'CPC'
Judge, Bengaluru (CCH-42), whereunder the suit filed by
the plaintiffs for recovery of money has been dismissed.
2. For the sake of convenience, the parties herein
are referred as per their rank before the Trial Court.
3. It is the case of the plaintiffs that plaintiff No.1
is a proprietorship concern and plaintiff No.2 is the
proprietor of plaintiff No.1, who was approached by the
defendant - company with a request to become its
marketing representative for liaisoning with the Bangalore
Water Supply and Sewage Board2 since it proposed to
participate in the tender notification dated 12.7.2007
issued by the BWSSB for supply, installation and seven
years maintenance of bulk flow metres in Bengaluru City.
That the plaintiffs agreed and executed a Memorandum of
Agreement/letter dated 8.9.20073 setting out the terms
and conditions. It was agreed that the plaintiffs shall be
paid 13% of the commission of the total value of the
contract awarded by the BWSSB, out of which 3% shall be
paid immediately on issue of the Letter of Intent in favour
Hereinafter referred to as the 'BWSSB'
Hereinafter referred to as the 'said Agreement'
of the defendant and the balance 10% on pro rata basis
against the receipt of payment by the defendant from
BWSSB from time to time.
3.1 It is the further case of the plaintiffs that
consequent to the Agreement, the plaintiffs purchased the
said tender documents on behalf of the defendant and
spent considerable effort, money and time in marketing
activities and assisted the defendant to fill-up/prepare the
tender documents and submit the same to the BWSSB.
That the plaintiffs also represented the defendant in the
pre bidding meetings with the BWSSB. That the defendant
had written a letter to the BWSSB that the plaintiffs are its
marketing representative. As a result of the efforts of the
plaintiffs, the defendant was the successful bidder and was
issued with the Letter of Intent by the BWSSB on
28.12.2007. That the plaintiffs also assisted the defendant
in various formalities such as, execution of the Agreement
with the BWSSB, etc., consequent to which the Work Order
was issued on 18.2.2008. That the defendant was
required to pay 3% of the commission at the time of
issuance of Letter of Intent and hence, the defendant
ought to have paid the plaintiffs a sum of `41,08,654.80.
Instead the defendant paid a total sum of `6,52,620/- and
a balance of `34,56,034.80 was required to be paid.
3.2 Despite the plaintiffs demanding for the said
balance payment, since the amount was not paid, various
correspondences have been exchanged between the
parties as also legal notice and reply notice. It is the
further case of the plaintiffs that since the defendant did
not comply with the demand made in the legal notice and
pay the outstanding dues, the plaintiffs filed
COP.No.926/2008 before the High Court of Judicature at
Bombay under Sections 433(e), 434 and 439 of the
Companies Act, 19564, for winding up of the defendant -
company. That pursuant to the order dated 25.2.2009
passed by the High Court of Judicature at Bombay, the
defendant deposited a sum of `15,00,000/- as also
executed a bank guarantee of a sum of
`20,00,000/-
20,00,000/-. Subsequently, the High Court of Bombay,
Hereinafter referred to as the 'Companies Act'
vide order dated 15.10.2009 has permitted the plaintiffs to
file a suit before the jurisdictional Court. Hence, the
plaintiffs filed a suit claiming the following amounts:
a) Principal amount due and payable `34,56,034.80
b) Interest calculated at 18% from
29.12.2007 to 1.12.2009 (704 days) `11,99,862.40
c) Costs incurred by the plaintiffs
in connection with the winding up
petition in the High Court of Bombay `07,50,000.00
Total `54,05,897.20
4. The defendant entered appearance before the
Trial Court and filed its written statement denying the case
of the plaintiffs. The defendant has further contended that
the purpose for which the plaintiffs came to be appointed
is illegal and the contract, if any, is opposed to public
policy and void ab initio. It is further specifically contended
that the plaintiffs have not produced the Annexure to the
Agreement/letter dated 8.9.2007. That the terms that
were agreed to be performed by the plaintiffs in the
Annexure have not been performed. That the plaintiffs
approached the defendant by sending an e-mail on
14.8.2007 offering marketing services and considering the
same, the defendant decided to appoint the plaintiffs as
marketing representative. That the plaintiffs' performance
was not satisfactory and the defendant realised that the
plaintiffs are incapable of performing the obligations
undertaken. Hence, the defendant was constrained to
terminate the appointment of the plaintiffs vide letter
dated 6.9.2008. The averments made in the plaint have
been in detail denied by the defendant in the written
statement. Hence, the defendant sought for dismissal of
the suit.
5. Consequent to the pleadings of the parties, the
Trial Court has framed the following issues and additional
issues:
"1. Whether the Plaintiff proves that there was a
contract between the Plaintiff and the Defendant
for providing marketing representation services in
connection with the BWSSB Tender No.
BWSSB/CE(M)/TA-92187 dated 12.07.2007?
2. Whether there was any agreement between the
Plaintiff and Defendant for payment of 3%
commission on the total value of the order
immediately on issue of letter of intent in favour of
the Defendant by BWSSB?
3. Whether the Plaintiff proves that the Plaintiff has
provided marketing representation services to the
Defendant for obtaining Letter of Intent or Order
from BWSSB against BWSSB tender No.
BWSSB/CE(M)/TA-92187 dated 12.07.2007?
4. Whether the Defendant proves that the plaintiff
has violated any terms of the agreement related to
payment of 3% sales commission?
5. Whether the Defendant proves that the Plaintiff
is not appointed as marketing representative of the
Defendant in connection with the said BWSSB
Tender?
6. Whether the Plaintiff proves that the Defendant
is liable to pay the suit claim of Rs. 54,05,897,20/-.
to the Plaintiff with interest and cost?
ADDITIONAL ISSUES FRAMED ON 1/10/2011
1. Whether the Plaintiff proves that this Court has
jurisdiction to try this suit?
2. Whether the Defendant proves that the service
of the Plaintiff was terminated as per the
termination notice dated 06.09.2008?
3. Whether the Defendant proves that the suit is
bad for want of cause of action as the subject
matter of the cause of action shown is unlawful?"
6. Plaintiff No.2 was examined as PW.1. Exs.P1
to P37 were marked in evidence. The defendant examined
its Manager as DW.1. Exs.D1 to D16 were marked in
evidence. The Trial Court by its judgment and decree
dated 30.11.2016 dismissed the suit filed by the plaintiffs.
Being aggrieved, the present appeal is filed.
7. Learned Senior Counsel Sri Ganapathi Hegde,
appearing along with Sri B.G.Gourav Mandappa, learned
counsel for the appellants/plaintiffs contends that the Trial
Court has answered the issues, the burden of which was
casted on the plaintiffs, in its favour and the issues, the
burden of which was casted on the defendant, against the
defendant except for the finding on issue No.6, consequent
to which the suit has been dismissed. He further contends
that the sole ground on which the Trial Court has
dismissed the suit is that the Agreement/letter is in
violation of the public policy as contemplated under
Section 23 of the Indian Contract Act, 18725 and the said
finding is erroneous. He further submits that there was no
plea by the defendant as to the manner in which the
contract was contrary to the public policy as also there is
no evidence adduced in that behalf. It is further
contended that the plaintiffs had initially filed a petition
Hereinafter referred to as the 'Contract Act'
under Section 433(e) of the Companies Act before the
High Court of Judicature at Bombay and since the
defendant had taken a contention with regard to the
Annexure to the letter dated 8.9.2007 (Ex.P1), and the
same was noted in the order dated 15.10.2009 when the
Bombay High Court directed the defendant to deposit the
amount and further permitted the plaintiffs to file a suit for
recovery of the money. That the order of the Bombay
High Court is binding on the defendant and it cannot
subsequently raise a plea that the said Agreement/letter
between the parties is contrary to the public policy. It is
further contended that having regard to the fact that all
the other issues have been answered in favour of the
plaintiffs and against the defendant and in view of the fact
that no cross appeal has been filed by the defendant, the
suit of the plaintiffs is liable to be decreed. Hence, he
seeks for allowing of the present appeal and granting of
the reliefs sought for.
8. Per contra, Sri B.M.Guru Raj, learned counsel
for the respondent/defendant contends that the Trial Court
has rightly appreciated the fact that the contract in respect
of which the suit claim is made, is contrary to the public
policy. He further submits that having regard to the e-mail
(Ex.D3), the scope of work that the plaintiffs have offered
to do is clearly forthcoming from the record. He further
submits that the order passed by the High Court of
Bombay is not binding and the plaintiffs were
independently required to demonstrate that they are
entitled to the suit claim amount. That the Trial Court has
rightly appreciated the contention of the defendant and
dismissed the suit, which is not liable to be interfered with
by this Court in the present appeal. Hence, he seeks for
dismissal of the above appeal.
9. The submissions of both the learned counsel
have been considered and the material on record including
the records of the Trial Court have been perused. The
questions that arise for consideration are:
i) Whether the finding recorded by the Trial Court on
issue No.6 is erroneous and liable to be interfered
with?
ii) Whether the suit of the plaintiffs is liable to be
decreed?
Re. question No.(i)
10. Vide issue No.6 the plaintiffs were required to
demonstrate as to whether the defendant is required to
pay the suit claim of `54,05,897.20. It is relevant to note
that while answering issue Nos.1, 2 and 3 in the
affirmative the Trial Court has already recorded a finding
that the plaintiffs proved that there was a contract
between the parties and that the plaintiffs have provided
marketing services to the defendant for obtaining a Letter
of Intent from the BWSSB and that there was an
Agreement between the parties for payment of 3%
commission on the total value of the order immediately on
issue of the Letter of Intent in favour of the defendant by
the BWSSB. Further, while answering issue Nos.4 and 5 in
the negative, the Trial Court has recorded a finding that
the defendant has failed to prove that the plaintiffs were
not appointed as marketing representative of the
defendant in connection with the BWSSB tender and the
plaintiffs have violated any of the terms of the said
Agreement related to payment of 3% of the sales
commission. The additional issue No.1 has been answered
in the affirmative that the plaintiffs have proved that the
Trial Court has jurisdiction to try the suit. Additional Issue
Nos.2 and 3 have been answered in the negative that the
defendant has failed to prove that the suit was bad for
want of cause of action as the subject matter is unlawful
and further that the defendant failed to prove that the
services of the plaintiffs were terminated as per the
termination notice dated 6.9.2008.
11. While considering issue No.6 the Trial Court
has recorded a finding that the agreement between the
parties is unenforceable as the object and consideration is
unlawful.
12. Before considering question No.(i) framed for
consideration in this appeal, it is relevant to notice the
relevant factual matrix to enable adjudication of the same.
13. It is not disputed that the defendant had
appointed the plaintiffs as its marketing representative
with respect to the BWSSB e-tender dated 12.7.2007
pursuant to the Agreement/letter dated 8.9.2007 (Ex.P1),
whereunder the defendant undertaken to pay the plaintiffs
sales commission of 13% on all contracts against the
referred tender, which shall be paid in the manner agreed,
i.e., (i) 3% of the sale commission on the total
order/contract value to be paid immediately upon release
of the Letter of Intent from the BWSSB; (ii) 10% of the
sales commission on the total order/contract value to be
paid on pro rata basis immediately on receipt of the
payments by the defendant from the BWSSB from time to
time.
14. Admittedly, the present claim of the plaintiffs is
only with regard to 3% of the sales commission to be paid
against the release of Letter of Intent. It is further
undisputed that consequent to the defendant participating
in the tender of the BWSSB, tender of the defendant has
been accepted by the Board of the BWSSB and the Letter
of Intent dated 28.12.2007 (Ex.P8) has been issued by the
BWSSB. Further, pursuant to the said Letter of Intent
(Ex.P8), the BWSSB has issued Work Order dated
18.2.2008 (Ex.P9) in favour of the defendant.
15. It is the specific case of the plaintiffs that
consequent to the issuance of the Letter of Intent, it has
claimed the amounts due towards 3% of the sales
commission and in that regard, various correspondences
have been exchanged between the parties and the
plaintiffs also got issued a legal notice dated 19.8.2008
(Ex.P23), whereunder the defendant was notified that it
was required to pay a sum of `41,08,654.80 being 3% of
the contract value and that the plaintiffs have received
`3,00,000/-, `2,50,000/- and `1,02,620/- being a total
sum of `6,52,620/- and that the defendant was required to
pay the balance sum of `34,56,034.80. The defendant got
issued a reply notice dated 29.9.2008 (Ex.P31),
whereunder it denied its liability to pay the amounts
claimed by the plaintiffs and sought for refund of the
amounts paid by the defendant to the plaintiffs.
16. Subsequent to the denial of the defendant to
pay the amounts claimed, the plaintiffs filed
COP.No.926/2008 before the High Court of Judicature at
Bombay. Vide order dated 25.2.2009 passed in
COP.No.926/2008, it was ordered as follows:
"8. There is therefore no bona-fide dispute.
However with a view to affording the company an
opportunity the following order is passed:-
i) In the event the Company paying to the
Petitioner a sum of Rs.40,00,000/- within eight
weeks from the date of being served with a copy of
this order by the Petitioner, the Petition shall stand
dismissed.
ii) In case of failure on the part of the Company to
pay the amount as aforesaid, the Petition shall
stand admitted and to be advertised in Free Press
Journal, Maharashtra Times and Maharashtra
Government Gazette. In that event the Petitioner
to deposit an amount of Rs. 10,000,0 with the
Prothonotary and Senior Master of this Court within
four weeks from the date of default.
iii) The Petitioner is at liberty to adopt proceeding
including for the balance amount as well as for
further interest.
Parties to act on an ordinary copy of this order duly
authenticated by the Associate/Private Secretary of
this Court."
17. The Bombay High Court subsequently, vide
order dated 15.10.2009 (Ex.P36) has ordered as follows:
"1. In the above company petition the following
order is passed by consent of the parties.
i) The respondent company has already submitted
a Bank Guarantee issued by the Bank of India to
the tune of Rs.20,00,000/- in favour of the
Prothonotary and Senior Master as directed by this
Court by its earlier order. The respondent submits
that in the event of the plaintiff filing a suit in
respect of the amount claimed in the petition
within the period stipulated hereunder, the said
Bank Guarantee already submitted be 'treated as
a Bank guarantee furnished by the respondent in
the said suit filed by the petitioner. The Bank
Guarantee already submitted is for a period of one
year and shall be renewed every year by the
respondent Company until the hearing and final
disposal of the suit and the orders passed therein
by the appropriate Court.
i) Over and above the said Bank Guarantee the
respondent company shall deposit an amount of
Rs.15,00,000/- within a period of six weeks from
today with the Prothonotary and Senior Master
and forthwith inform the petitioners in writing that
the said amount is deposited with the
Prothonotary and Senior Master.
iii) The petitioner shall within a period of one week
thereafter file a suit before the appropriate Court
and furnish particulars of the suit to the
respondent as well as the Prothonotary and Senior
Master, High Court, Bombay.
iv) If the suit filed by the plaintiff is in some other
Court and not before this Court, the Prothonotary
and Senior Master shall transfer the said amount
of Rs. 15,00,000/- to the Court before which the
suit is filed by the petitioner and the said Court
shall retain the said amount of
Rs. 15,00,000/- in the suit account until the suit is
heard and disposed of.
v) The Bank Guarantee of Rs.20,00,000/- shall
also be renewed by the respondent company in
favour of the Registrar of the Court before which
the suit has been filed by the petitioner as
provided in clause (i) above.
vi) Both the parties shall be at liberty to take out
appropriate proceedings seeking ad-
interim/interim relief in the suit filed by the
petitioner.
viii) Parties shall also be at liberty to obtain
directions from the appropriate Court for
investment of the said amount of Rs. 15,00,000/-
deposited by the respondent company.
ix) All rights and contentions of the parties are
kept open.
x) In the event of the respondent company not
depositing the said amount of Rs.15,00,000/-
within six weeks from today or failing to renew the
Bank Guarantee from time to time as set in Clause
(i) above the petition shall stand revived and shall
stand admitted without reference to this Court.
The petitioner shall thereafter advertise the
petition in two local newspapers, namely, Free
Press Journal, and Maharashtra Times and in the
Maharashtra Government Gazette.
The petitioner shall deposit an amount of Rs.
10,000/- with the Prothonotary and Senior Master
towards the publication charges, within three
weeks from the date of any default with intimation
to the Company Registrar failing which the petition
shall stand dismissed for non prosecution.
2. The company petition is accordingly disposed
of."
18. Subsequent to the disposal of the
COP.No.926/2008, the plaintiffs have filed the present suit.
In the present suit, the plaintiffs have once again relied
upon the said Agreement/letter (Ex.P1) and the fact that
the Letter of Intent (Ex.P8) and Work Order (Ex.P9) have
been issued in order to claim 3% of the commission.
19. The defendant in the written statement has
specifically contended that the works of the plaintiffs that
were required to be done were set out in the Annexure to
the Agreement/letter dated 8.9.2007 (Ex.P1) and if the
same is taken into account, it would be clear that the
plaintiffs have not performed any task and having regard
to the fact that the plaintiffs failed to perform the
obligation mentioned in the Annexure to Ex.P1, the
defendant is not liable to pay any moneys. Admittedly, the
Annexure to Ex.P1 has not been marked in evidence nor is
there any material on record to demonstrate the contents
of the said Annexure.
20. It is the vehement contention of the learned
counsel for the defendant that if the e-mail dated
14.7.2007 (Ex.D3) is perused, it is clear that the
transaction between the parties is contrary to the public
policy. It is relevant to note that consequent to the e-
mail, the letter (Ex.P1) has been issued by the defendant
appointing the plaintiffs as the marketing representative.
There is no material on record which indicates that the
payment agreed to be made by the defendant to the
plaintiffs vide Ex.P1 will be subject to the tasks that the
plaintiffs represented that would be done as set out in the
e-mail (Ex.D3).
21. Ex.P1 constitutes a complete agreement
between the parties. It is further relevant to note that a
copy of Ex.P8 and Ex.P9 has been issued by the BWSSB to
the plaintiffs by stating them to be the local
agent/representative of the defendant. Having regard to
the issuance of Ex.P8 and Ex.P9 by BWSSB, the defendant
is liable to pay the amounts as agreed under Ex.P1.
22. The Trial Court, while considering issue No.6
has construed that having regard to the statements made
by the plaintiffs in the e-mail (Ex.D3) and the statements
made by PW.1 during the course of cross-examination, the
object of the said Agreement between the parties is that
the plaintiffs will yield and influence the government
authorities in securing the tender and for the said purpose,
the plaintiffs would be paid their commission and hence,
held that the object/consideration of the contract being
unlawful is void ab initio as per illustration (f) of Section 23
of the Contract Act.
23. Section 23 of the Contract Act and illustration
(f) contained therein reads as follows:
"23. What considerations and objects are lawful,
and what not.--The consideration or object of an
agreement is lawful, unless--
it is forbidden by law; or
is of such a nature that if permitted, it would
defeat the provisions of any law; or
is fraudulent ; or
involves or implies injury to the person or
property of another; or
the Court regards it as immoral, or opposed
to public policy.
In each of these cases, the consideration or object
of an agreement is said to be unlawful. Every
agreement of which the object or consideration is
unlawful is void.
Illustration
(f) A promises to obtain for B an
employment in the public service and B promises to
pay 1,000 rupees to A. The agreement is void, as
the consideration for it is unlawful."
24. The relevant portion of the cross-examination
of PW.1 which is extracted at para 45 of the judgment of
the Trial Court is noticed hereinbelow for ready reference:
"45. Further, the PW1 during the course of the
cross-examination deposed regarding the nature of
work done by him, which is as under:
a) Marketing representation of the defendant.
b) Finding out the competitive situation.
c) When the pre-bid meeting and any other official
meeting will be held.
d) Attending the tender opening at Bangalore
Water Supply and Sewerage Board.
e) Informing the defendant who are bidders and
what is the process quoted by them.
f) Informing the defendant what is the progress of
the tender in BWSSB.
g) What is the competition doing and when the
letter of intent is likely to be placed by BWSSB and
who is the lower bidder and who is likely to be get
the order.
To highlight the BWSSB officers the merits of the
defendant".
25. It is forthcoming that PW.1 has merely stated
various tasks, which have been recorded as (a) to (g) in
the cross-examination, which clearly indicate that the
plaintiffs were representing the defendant in the tender
process of the BWSSB which the defendant had
participated in. It is further relevant to note that the
defendant was located at Pune and admittedly, the only
representative of the defendant at Bangalore was the
plaintiffs. It is further undisputed that it was the plaintiffs
who were representing the defendant in all the interactions
with the BWSSB during the period that the defendant
participated in the tender process of the BWSSB. None of
the statements made in the testimony of PW.1, as noticed
above, would attract Section 23 of the Contract Act.
Further, the transaction between the parties is in no way
similar to the transaction which is set out in the illustration
(f) of Section 23 of the Contract Act.
26. The defendant at para 4 of the written
statement while taking the contention that the contract is
opposed to public policy has averred as follows:
"4. It is respectfully submitted that there is no
cause action whatsoever and the semblance of
cause shown is wholly unlawful. The purpose for
which the plaintiff claims to be appointed is by
itself illegal. The contract if any, is opposed to
public policy and hence void ab-initio. The above
suit is liable to be dismissed in limine on this
ground alone."
27. It is forthcoming that the defendant has
averred that the purpose for which the plaintiffs claim to
be appointed is itself illegal and hence, the contract is
opposed to public policy and void ab initio.
28. It is relevant to note that the basis of claim of
the plaintiffs is Ex.P1 as noticed hereinabove and having
regard to the issuance of the Letter of Intent (Ex.P8) and
Work Order (Ex.P9), the plaintiffs are entitled to 3% of the
commission amount as stipulated in Ex.P1. The details of
the nature of work which has been enumerated in Ex.P1 as
also in the testimony of PW.1, do not, by any stretch of
imagination, constitute that the work of the plaintiffs is
illegal as contemplated under Section 23 of the Contract
Act and more particularly illustration (f) of Section 23.
29. As noticed above, the findings of the Trial
Court on all the issues are in favour of the plaintiffs and
against the defendant. It is further relevant to note that
the said findings have not been challenged by the
defendant as per Order XLI Rule 22(1) of the CPC. In view
of the same, having regard to the findings recorded by the
Trial Court on the other issues framed by it, the finding on
issue No.6 is erroneous and liable to be interfered with.
Hence, question No.(i) framed for consideration is
answered in the affirmative.
Re. question No.(ii)
30. The defendant being held liable to pay the
amounts in terms of Ex.P1, with regard to the quantum of
amounts claimed, it is forthcoming that the balance
amounts due and payable by the defendant to the plaintiffs
is a sum of `34,56,064/- ie., the balance of commission of
3% in terms of Ex.P1. The plaintiffs have also claimed a
sum of `11,99,862/- as interest at 18% pa., from
29.12.2007 to 1.12.2009 (for a period of 704 days). It is
relevant to note that under Ex.P1 the parties have not
agreed to any rate of interest, in the event of delayed
payments by the defendant. There is no other material on
record to indicate that the parties have agreed with regard
to payment of interest on the delayed payment. Under the
circumstances, the plaintiffs are not entitled to interest at
18% pa.
31. Keeping in mind the dicta laid down by the
Constitution Bench of the Hon'ble Supreme Court in the
case of Central Bank of India v. Ravindra6 with regard
to the award of interest for the pre suit period, pendente
lite as well as post decree and having regard to the
discretion of the Court to award interest as contained
under Section 34 of the CPC and keeping in mind the
nature of transaction between the parties, it is just and
proper that the defendant be directed to pay the plaintiffs
a sum of `34,56,064/- together with interest at 8% pa.,
from the date of legal notice i.e., from 19.8.2008 up to the
date of payment. Hence, question No.(ii) framed for
consideration is answered in the affirmative.
32. Having regard to the discussion made above,
the suit of the plaintiffs is liable to be partly decreed.
Hence, the following:
ORDER
i) The above appeal is allowed;
(2002) 1 SCC 367
ii) The judgment and decree dated 30.11.2016
passed in OS No.7680/2009 by the XLI Additional
City Civil Judge, Bengaluru (CCH-42), is set aside.
iii) The suit in OS No.7680/2009 on the file of the
XLI Additional City Civil Judge, Bengaluru (CCH-42),
is decreed as follows:
a) The defendant is liable to pay the
plaintiffs a sum of `34,56,064/- together with
interest at 8% p.a. from 19.8.2008 up to the
date of payment with costs.
iv) Modified decree to be drawn accordingly.
Sd/-
JUDGE
Sd/-
JUDGE
nd/-
