The court upheld the plaintiff's right to recovery under the Negotiable Instrument Act and awarded interest in accordance with the agreement and prevailing rates.

( 1 ) THE plaintiff has filed this suit for recovery of Rs. 1,09,01,632. 00 with pendente lite and future interest. It is a case of the plaintiff that it is engaged in the business of manufacturing and marketing Polyester Partially Oriented Yarn (hereinafter referred to as the poy ). The defendant company which is manufacturing concern, uses POY as raw material for its production activities. On the basis of orders placed by the defendant to the plaintiff for the purchase of various quantities of POY from time to time, the material was delivered to the defendant on credit basis and in lieu thereto sales hundis were drawn on the defendant and the defendant was liable to make payment to the plaintiff within 60 days from the date of despatch of the consignment.

( 2 ). It is further stated in the plaint that it was the practice of the defendant company to place purchase orders with the plaintiff company for various quantities of POY sought to be purchased. The plaintiff company in turn, raised invoices in accordance with the said purchase orders and supplied to the defendant company, POY in terms of the said invoices. The plaintiff has been duly supplying the goods and the defendant has been receiving the same without any objection or complaint as is evident from the acknowledged lorry receipts wherein the defendant has acknowledged the receipt of the goods/poy in terms of the invoices raised.

( 3 ). Further it is stated that the defendant in the year 1994 started making defaults in the payment of the purchase price of the said POY to the plaintiff. As a result of these defaults the outstanding due and payable by the defendant accumulated. The defendant has duly acknowledged their liability towards the plaintiff in letter of the defendant dated 7. 9. 1994 addressed to the plaintiff herein and vide the minutes of the meeting between the parties on 6. 9. 1994 (The defendant company being represented in the said meeting by its Managing director ).

( 4 ). It is further stated that the defendant company made several requests to the plaintiff to continue with the supply of POY and assured the plaintiff that all the outstandings would be cleared very soon. The plaintiff accepting the plea/assurances of the defendant supplied the defendant with various quantities of POY in terms of various invoices from 3rd of June,1995 onwards till 28. 9. 1995 (being the date of the last invoice raised and goods supplied in terms thereof ). The defendant company has duly acknowledged the receipt of POY supplied in terms of the aforesaid invoices and the same is evident from the acknowledged lorry receipts.

( 5 ). Thereafter the defendant issued following two cheques as part payment of the outstanding dues: ___________________________________________________ s. No. Cheque No. Date Amount (Rs.) ___________________________________________________ 1. 082969 22. 01. 98 3,18,122. 00 2. 290337 19. 01. 98 1,00,000. 00 ____________________________________________________

( 6 ). These cheques were, however, dishonoured on presentation on the ground that there were no sufficient funds in the account of the defendant. When the cheques were returned. After the dishonouring of the said cheques, the plaintiff sent legal notice dated 5. 2. 1998 under the provisions of Negotiable Instrument Act calling upon the defendant to clear the outstanding dues. However, no payment was made and in these circumstances the plaintiff initiated criminal proceedings against the defendant under Section 138 of the Negotiable instrument Act. It is further stated that the defendant is jointly, severally liable to pay a sum of rs. 1,09,01,632/- which liability they have acknowledged from time to time. They are also liable to pay interest 24% P. A.

( 7 ). The defendant was duly served with the summons in this suit. However, nobody appeared on behalf of the defendant in spite of service and by orders dated 25. 8. 1998 the defendant was proceeded ex-parte. Thereafter, by order dated