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2008 Supreme(Del) 1246
IN THE HIGH COURT OF DELHI
PRADEEP NANDRAJOG
YADAV FLOUR MILLS P.LTD - Appellant
Versus
GLOBUS AGRONICS LTD - Respondent
RFA 444/2005
Decided On : 12-12-2008
Mr. Rajesh Yadav, Advocate
Mr. Raman Kapur, Advocate
The main legal point established is that in the absence of evidence of a contract, market practice, or custom for the payment of interest, and with the only notice demanding interest issued after the principal amounts were paid, no interest was found to be payable on the delayed payments.
Headnote:
Interest Liability - Recovery Suit - Interest Act 1978 - Section 3, Section 4 - The court found that there was no evidence of a contract, market practice, or custom for the payment of interest. The only notice demanding interest was issued after the principal amounts were paid. The court also determined that the cheque issued was post-dated and no further amount was payable. The appellant's claim for interest on delayed payments was dismissed.
Fact of the Case:
The appellant filed a suit for recovery of delayed payments and the price of unreturned gunny bags. The respondent claimed that a settlement had been reached, and the trial judge found that the settlement documents did not bind the appellant. The court also ruled that no interest was payable on the delayed payments, and decreed recompense for the unreturned gunny bags.
Finding of the Court:
The court found that the settlement documents did not bind the appellant, and no interest was payable on the delayed payments. The appellant's claim for interest was dismissed.
Issues: The issues revolved around the validity of the settlement documents, the liability for interest on delayed payments, and the recompense for unreturned gunny bags.
Ratio Decidendi: The court determined that there was no evidence of a contract, market practice, or custom for the payment of interest. The only notice demanding interest was issued after the principal amounts were paid. The court also found that the cheque issued was post-dated and no further amount was payable.
Final Decision: The court dismissed the appellant's claim for interest on delayed payments and decreed recompense for the unreturned gunny bags.
1. Appellant had filed a suit for recovery of Rs.6,63,640/- (Rupees Six Lacs Sixty Three Thousand Sixty Hundred Forty only) alleging that it had been supplying Bajra Atta to the respondent and one of its units, namely Haryana Organics, and pertaining to the supplies delayed payments were received due to which interest in sum of Rs.4,43,142/- (Rupees Four Lacs Forty Three Thousand One Hundred Forty Two only) and Rs.1,64,698/- (Rupees One Lac Sixty Four Thousand Six Hundred Ninety Eight only) had accrued. Additionally it was pleaded that as per agreement between the parties if the empty gunny bags were not returned price thereof @ Rs.12/-per bag was payable. Rs.30,276/- (Rupees Thirty Thousand Two Hundred Seventy Six only) and Rs.25,524/- (Rupees Twenty Five Thousand Five Hundred Twenty Four only) as the price of unreturned gunny bags was prayed to be decreed.
2. The respondent took a stand in the written statement that on 10.2.1999 a settlement was arrived at evidenced by Ex.D-2 that pertaining to the supplies at Haryana Organics in full and final settlement Rs.4,66,902.28 (Rupees Four Lacs Sixty Six Thousand Nine Hundred Two and paise 28 only) was payable and was paid. Pertaining to the supplies effected on the respondent it was pleaded that vide Ex.D-1 on 13.4.1999 in full and final settlement Rs.2,00,000/- (Rupees Two Lacs only) was payable for which the payment was made.
3. Atthe trial appellant sought to sustain the claim with respect to a cheque in sum of Rs.4,00,000/- (Rupees Four Lacs only) payment whereof was stopped. The cheque was dated 1.2.1999.
4. The respondent sought to explain its action by stating that a post dated cheque was issued but in view of the settlement no amount was payable and hence payment was stopped pertaining to the said post dated cheque.
5. Learned Trial Judge has returned a finding that Ex.D-1 and D-2 do not bear the signatures of the appellant and hence the writing thereon that the payments are towards full and final settlement of the accounts does not bind the appellant. Thus, the said documents have not been held to be proved of a full and final settlement.
6. But, noting that there was no contract between the parties to pay interest nor was any custom or market practice proved nor was any notice demanding interest served, finding returned is that no interest was payable on the delayed payments.
7. Suit pertaining to recompense for gunny bags not returned has been decreed in sum of Rs.55,800/- (Rupees Fifty Five Thousand Eight Hundred only).
8. The appellant i.e. the plaintiff wants more i.e. the interest on delayed payments.
9. Learned counsel for the appellant urges that the logical corollary of the finding returned by the learned Trial Judge that Ex.D-1 and D-2 do not evidence a full and final settlement requires the claim to be decreed, if not in full, at least in the sum of Rs.4,00,000/- (Rupees Four Lacs only) being the cheque admittedly issued on 1.2.1999 payment whereof was stopped.
10. We do not find any force in the said contention for the reason merely because the defendant i.e. the respondent could not prove that Ex.D-1 and D2 recorded a full and final settlement; plaintiff i.e. the appellant had to stand on its own legs to prove entitlement to interest. We note that Ex.D-1 and Ex.D-2 are vouchers of the respondent when payment was made but do not bear the signature of any representative of the appellant and hence the finding returned by the learned Trial Judge that the writing thereon does not bind the appellant.
11. There is no evidence on record that from time to time, the appellant raised debit notes pertaining to the interest which appellant was crediting in its account books against the respondent.
12. Learned counsel for the appellant concedes that there is no written contract pertaining to payment of interest but urges that the orders record a term; being that payment would be made after five days. Counsel urges that some meaning has to be
