The importance of providing evidence to establish authorization and liability in a recovery suit, and the requirement for parties to substantiate their claims with credible evidence.

S.P GARG, J.

1. Present suit for recovery of Rs.3,75,64,364.00 has been preferred by Hindalco Industries Ltd.(hereinafter ‘the plaintiff’) against White Metals Inds.Pvt.Ltd. (hereinafter ‘the defendant’).

2. Briefly stated, the plaintiff’s case as pleaded in the plaint is that the defendant approached the plaintiff-company to effect sale of its products as a dealer on various terms and conditions agreed between the parties. After effecting the sales, the plaintiff used to raise invoices in respect of sales made to the defendant from time to time against the running account. As per the arrangement, the defendant was required to make the payment of the invoices within a period of 45 days, at times through letters of credit and at other times through the other mode of payment. It is averred that the plaintiff at request of the defendant from time to time sold and supplied to the defendant various consignments of the products during the period 20.11.2005 till 9.2.2006. The defendant made part payments only against two invoices; and neglected to pay the amount of the remaining invoices. The plaintiff raised the invoices during this period against the supplies of the products in the sum of Rs.3,18,92,818/-. The defendant against the outstanding amount paid a sum of Rs.3,68,658/-only and the outstanding dues payable by the defendant were to the tune of Rs.3,15,24,160/-. After considering the credit/debit notes issued in respect of the discounts, claims, expenses etc. for a sum of Rs.10,55,839/-, the defendant owed a sum of Rs.3,28,80,353/-to the plaintiff.

3. It is further pleaded that the plaintiff supplied the products to the defendant on principal to principal basis as a dealer/customer under good faith by virtue of Consignment Agency Agreement dated 20.06.2000, which was initially valid for a period of three years i.e. uptill 19.06.2003. It was subsequently extended till 30.05.2005 and thereafter till 31.03.2006.

4. It is further averred that there was an outstanding amount of Rs.3,96,93,758.36 as on June, 2000. Mutual arrangement for settlement of dues was executed between the parties vide agreement dated 20.06.2000 and letter of the defendant dated 2.6.2003. As per the said agreement the defendant was to pay interest on the outstanding amount @ 10% p.a. as a special case; the defendant was to clear the principal dues within the mutually agreed time schedule. The defendant was liable to pay interest amounting to Rs.86,10,008/-on the said outstanding amount. An amount of Rs.48,49,568/-was adjusted from the commission/discount against the future supplies under the new account transaction i.e. the account maintained after frozen of the earlier liability of Rs.3,96,93,758.36. The defendant was thus liable to pay the balance outstanding interest amounting Rs.37,60,440/-which he failed to pay.

5. By a communication dated 2.6.2003, the defendant pursuant to the agreement dated 20.06.2000 acknowledged its liability and its commitment to clear the entire outstanding dues as per the agreement. The defendant, however, did not meet the time schedule and the contract period was extended till 30.05.2004. Vide communication dated 31.08.2005, the plaintiff informed the defendant that out of the total interest amounting to Rs.86,10,008/-only a sum of Rs.48,49,568/-has been received leaving a balance of Rs.37,60,440/-. The defendant is further liable to pay Rs.9,23,571/-against the supplies made to the defendant as a consignment agent against the five challans dated 30.12.2005. The amount of challans issued by the plaintiff is Rs.6,02,541/-and the defendant has paid only a sum of Rs.35,916/-leaving a balance of Rs.5,66,625/-. After adjusting the debit/credit memos, a sum of Rs.9,23,571/-is still outstanding. The defendant failed to clear the outstanding amount despite various reminders; hence the suit.

6. The suit is contested by the defendant. In the written statement, the defendant controverted the allegations of the plaintiff and informed