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2008 Supreme(Mad) 2946

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE A.C. ARUMUGAPERUMAL ADITYAN
M/s. Aishnavi Leathers
Versus
Multizhip Pvt. Ltd. Rep by its Director
A.S.No.48 of 2001
Decided on : 18-08-2008

Advocates Appeared:
For the Appellant:T.E. Baskar, Advocate.
For the Respondent:Ashok Kumar, Advocate.

The suit was not barred by limitation, and the plaintiff was entitled to claim only 9% interest for the amount due from the defendant.

Headnote:

Limitation - Commercial Transaction - Sale of Goods Act - [O.S.No.591 of 1996] - [Article 47 of the Limitation Act, 1963, Sale of Goods Act] - The court held that the suit was not barred by limitation as it was filed within three years from the date of failure of payment on the running account maintained by the plaintiff. The plaintiff was entitled to claim only 9% interest for the amount due from the defendant and not 18% interest as claimed by them in the plaint.

Fact of the Case:

The plaintiff supplied zipper materials to the defendant, who failed to pay the outstanding amount. The defendant claimed that the supplies were defective and of poor quality, resulting in losses for the defendant.

Finding of the Court:

The court found that the suit was not barred by limitation and decreed the suit for the principal amount with reduced interest. The defendant's claims of defective supplies were not substantiated.

Issues: 1) Whether the suit is barred by limitation? 2) Whether the interest claimed by the plaintiff is admissible? 3) Whether the decree and judgment in O.S.No.591 of 1996 on the file of the III Additional Judge, City Civil Court, Chennai, is liable to be set aside for the reasons stated in the memorandum of appeal?

Ratio Decidendi: The suit was not barred by limitation as it was filed within three years from the date of failure of payment. The plaintiff was entitled to claim only 9% interest for the amount due from the defendant and not 18% interest as claimed by them in the plaint.

Final Decision: The appeal was allowed in part, and the suit was decreed for the principal amount with reduced interest. The appeal was dismissed in other respects.

Judgment :-

This appeal has been directed against the decree and judgment in O.S.No.591 of 1996 on the file of the Court of III Additional Judge, City Civil Court, Chennai.

2. Even though the appeal was posted under the caption For Dismissal, the learned counsel for the appellant present in the Court and argued the appeal, but there was no representation for the respondent.

3. The averments in the plaint in brief are as follows:-

The plaintiffs are carrying on their business in zipper materials and based on the orders placed by their customers, the plaintiff/company supplied goods to them. The defendants representative approached the plaintiff-company on various dates prior to the year 1992 and purchased zipper materials from the petitioner-company. The defendant enjoyed credit facilities and had running credit for Multizip Pvt. Ltd., account with the plaintiff-company. The plaintiff-company sold and delivered goods to the defendant on various dates. As per the books of accounts maintained by the plaintiff-company, after giving credit to the payments made by the defendant, still there is a balance of Rs.3,40,115/16 due and payable by the defendant. The statement of account failed along with the plaint reflects the said amount. After adjusting the payments from the amount outstanding by the defendant towards the goods supplied by the plaintiff, the defendant-company is liable to pay to the plaintiff a sum of Rs.3,04,115/16 towards principal. Further as per the terms and conditions of sale, since the defendant has failed to pay the amount in respect of purchases made by them within the agreed time limit, they are liable to pay interest at 18% pa from 9. 1992 on the principal sum of Rs.3,04,115/16 as on date which works out to Rs.1,59,660/84. This in all the amount due from the defendant to the plaintiff comes to Rs.4,63,776/-. In spite of the repeated demands, the defendant has failed to pay the suit amount to the plaintiff. Hence, the suit.

4. The defendant-company in their written statement would contend that the defendant concern was started 7 years back and is doing the business of manufacturing and exporting leather garments to several countries with turnover in crores of rupees. Through out our concern has been profitable and has strenuously built a strong reputation for quality and reliability internationally. The plaintiff company was one of several suppliers of small raw materials to the defendant viz., zip fastenrs, buttons etc. They supplied these small items between February-1992 and August-1992 to the tune of few lakhs of rupees. However, the supplies of the respondent were defective and of very poor quality. The defendant had continuously received the following remarks/complaints from their production technicians as listed below:-

a)Zippers are black and no uniformity in teeth

b)Slider cracks/demages

c)Teeth gaps are more

d)Teeth/tape alignment is not proper etc.,

These defects have been repeatedly intimated to the plaintiff and one such letter written to them on 16.09.1992 is also filed by the plaintiff. Several of the plaintiffs goods have been rejected and returned. Several consignments of the plaintiff were rejected and intimated to the plaintiff and they did not come and collect the same. Further several of the defendants export consignments using the plaintiffs receipts were rejected by the defendants overseas purchasers and the defendant had been put to heavy loss. Thus several calls made by the defendant to the plaintiff requesting them to come and check their defective supplies and replace the same had fallen into deaf ears. The plaintiff never visited the factory of the defendant. The plaintiff is bound to make good the loss incurred by the defendant due to the plaintiffs defective supply of zips. The plaintiff had filed complaint before the District Consumer Redressal Forum, Chennai, in O.P.No.158 and 1158 of 1994 against the defendant. But the District Consumer Redressal Forum had dismissed both the co










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