IMPORTANT POINT
Admissions made by a party can serve as substantive evidence, allowing the court to grant a decree in the absence of a defense.

JUDGMENT :

Krishna Rao, J.

1. The plaintiff herein had instituted the captioned suit against the defendant, for a decree of a sum of Rs.1,65,90,037.41/- along with interest at the rate of 12% per annum on and from 1st July, 2023 till date of realisation and allied prayers.

2. The plaintiff has filed the present application under Chapter XIIIA of the Original Side Rules of this Court, praying for final judgment and decree for a sum of Rs.1,65,90,037.41/- along with interest.

3. The plaintiff is a company incorporated on or about 23rd January, 2008, under the Companies Act, 1956, and is engaged in the business of trading of yarn.

4. In the month of March, 2008, the Directors of the defendant approached the plaintiff to start a business relationship with the plaintiff. After series of meetings and discussion, the parties thereto entered into an oral agreement on the following terms and conditions :

(i) The plaintiff shall place orders upon the defendant for purchase of yarn and upon placement of such orders, the defendant would forthwith supply the desired quantity and quality of yarn to the plaintiff;

(ii) The plaintiff shall make payments including advance payments, as and when required to the defendant from its bank accounts maintained with Tamilnad Mercantile Bank Limited, Netaji Subhas Road Branch, Kolkata and HDFC Bank Limited, Tollygaunge Branch, Kolkata, for the defendant to take steps for causing delivery of the desired quantity and quality of yarn to the plaintiff;

(iii) The advance so received by the defendant shall be exclusively utilised by the defendant for the purpose of effecting supply upon the plaintiff;

(iv) In the event, if the goods supplied by the defendant do not conform with the specifications as desired by the plaintiff, the defendant shall forthwith replace the said goods with the goods of the desired specification at its own cost and expenses;

(v) The orders shall be placed by the plaintiff from its office and the goods would be supplied by the defendant from its factory;

(vi) The account between the parties would be mutual, current, and open as the advances or part payments made by the plaintiff to the defendant shall not be on invoice-wise basis but shall be generally made from time to time.

5. Thereafter, the parties started transacting business between them, and in or around August, 2018, upon reconciliation of accounts, it became apparent that the defendant owed the plaintiff a total amount of Rs.1,46,94,527.66/- and thus the parties mutually agreed to allocate the aforesaid due sum in manner mentioned herein below :

(i) An amount of Rs.1,00,00,000/- would be adjusted toward refundable advance payable to the defendant by the plaintiff under an agreement of lease, by virtue of which the factory, which belongs to the defendant, located at 2-9, Singlalundapurnam Privu Road, Rasipuram, District – Namakkal, Rasipuram – 637408, was leased out to the plaintiff.

(ii) The remaining balance of Rs. 46,94,527.66/- was identified as the opening balance in a separate account titled “J.K. Yarn Private Limited, Rasipuram”.

6. As agreed between the parties, a sum of Rs.1,00,00,000/- was adjusted by the defendant toward refundable advance payable by the plaintiff, under a ‘Lease Agreement’ executed on 16th July, 2018, as per the terms of which, the plaintiff would have the right to utilize the entire factory premises that encompassed two mills, namely Mill “A” and “B” and pursuant thereto the plaintiff had deposited a sum of Rs.1,00,00,000/- as a refundable advance with the defendant.

7. The terms and conditions of the said ‘Lease Agreement’ dated 16th July, 2018, are mentioned herein below :

(i) That the defendant has agreed to grant lease for a period of eleven months initially with the option of renewal every 11 months up to a maximum of thirty-six months. Either party may terminate the lease by providing a two-month notice to the other party. The Lease pertained to the factory premises including the plant and machinery located a