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2016 Supreme(Mad) 2310
IN THE HIGH COURT OF JUDICATURE AT MADRAS
PUSHPA SATHYANARAYANA, J.
M/s. JAY AR Enterprises - Plaintiff
Versus
M/s. SCRAPT TRADERS - Defendant
C.S. No. 869 of 2009
Decided On : 28-07-2016
Advocate Appeared:
For the Plaintiff : Mr. R. Loganathan
Headnote:
Civil Procedure Code, 1908 - Section 34 –Civil Suit – Debt Recovery and Monetary Laws - Bank Sui for Recovery of amount - Interest - Non-Ferrous and M.S.C.I. Rolling Scraps and Electrical Goods etc., and procured Iron Ore Pines for purpose of exporting to Overseas Countries - For said purpose, plaintiff had paid defendant amount for sale and supply of Metric Tons of Iron Ore Pines and bill of lading was arranged - Thereafter, on verification, it was found that Iron Ore Pines were not of expected quality and agreement between plaintiff and defendant had to break - Defendant, realising his position, agreed to remit amount back to plaintiff and accordingly, paid it through a cheque drawn on ICICI Bank - Said cheque itself was paid, after a long correspondence between th parties - Held, It is well settled that interest for period prior to suit is payable under contractual interest, and after institution of suit, it is governed by Section 34 of Code - After institution of suit, Court has got discretion to order payment of interest at such rate as Court deems reasonable - In this case, despite transaction being commercial, so far as percentage of interest payable is concerned, excepting claim made in plaint, there is no document filed - Defendant is directed to pay interest at rate of 6% per annum on principal sum adjudged from date of filing of suit, to the date of decree, that is, pendente lite - Interest from date of decree, till date of realisation i.e., future interest or further interest is also fixed – Suit decreed.
The suit is filed for recovery of a sum of Rs.62,41,356/- with 24% interest per annum and for other reliefs.
2. The defendant is a dealer in Ferrous, Non-Ferrous and M.S.C.I. Rolling Scraps and Electrical Goods etc., and procured Iron Ore Pines for the purpose of exporting to Overseas Countries. For the said purpose, the plaintiff had paid the defendant a sum of Rs.50,00,000/- (Rupees Fifth Lakhs Only) for sale and supply of 20,000 Metric Tons of Iron Ore Pines and the bill of lading was arranged. Thereafter, on verification, it was found that the Iron Ore Pines were not of the expected quality and the agreement between the plaintiff and the defendant had to break. The defendant, realising his position, agreed to remit the sum of Rs.50,00,000/- back to the plaintiff and accordingly, paid it through a cheque dated 10.04.2006, drawn on ICICI Bank, Kolkatta. The said cheque itself was paid, after a long correspondence between the parties.
3. The plaintiff presented the cheque for realisation on 05.10.2006 and the same was returned by the Bank on 07.10.2006 on the ground of “Funds Insufficient”. After the return, the plaintiff had forwarded a debit note indicating the same to the defendant, with respect to the original cheque. The plaintiff also issued a demand notice, through advocate, on 08.11.2006. It is stated further that in the meanwhile, the defendant had chosen to issue three demand drafts drawn in favour of the plaintiff, dated 25.04.2006, for a sum of Rs.20,00,000/-. The covering letter also averred that the said payment was part of the payment dues, arising out of the cheque, which was dishonoured.
4. Hence, it is contended by the plaintiff that the defendant is liable for the balance of Rs.30,00,000/-, arising out of the liability. Admittedly, the transaction being commercial one, the plaintiff has computed the rate of interest at 24% per annum, from 05.08.2005 till 25.04.2006, and thereafter, on a sum of Rs.30,00,000/-, till realisation of the suit. Thus, there is a liability on the part of the defendant to pay interest as per the agreed terms in addition to the principal amount of Rs.30,00,000/-.
5. After service of notice, the defendant had entered appearance and filed written statement. In the written statement, it is specifically admitted that the defendant issued a post-dated cheque drawn on ICICI Bank, R.N. Mukherjee Branch, dated 05.10.2005, for a sum of Rs.50,00,000/- towards commission amount, only on expectation that the foreign buyer viz., United Overseas Ltd., would issue a letter of credit/documentary credit towards 100% payment towards supply. It is further stated that the said amount of Rs.50,00,000/- was paid as advance payment of commission for supply of Iron Ore to M/s. United Overseas Ltd., and the payment made as stated above was only on behalf of M/s. M.J.R. Logistics and without the said M.J.R. Logistics as party, the suit is bad for non-joinder of necessary party and prayed for dismissal.
6. Though the defendant had filed the written statement, as there is no representation or co-operation from his part in proceeding with the trial, he was set ex parte on 29.04.2016.
7. The questions that have to be decided are (i) whether the plaintiff is entitled to recover the suit claim against the defendant; (ii) whether the plaintiff is entitled for the interest as claimed; and (iii) what are all the other reliefs.
8. Mr. P. Janardhan Rao, Managing Partner of the plaintiff's firm, on behalf of the plaintiff, has filed proof affidavit for his chief examination to prove the suit claim, besides examining himself as P.W.1., and marked 20 documents as Exs.P1 to P20.
9. Heard the submissions made by the learned counsel for the plaintiff and perused the materials available on record.
10. The suit claim is based on a cheque for Rs.50,00,000/-, which was dishonoured at the behest of the defendant. First of all, it has to be seen whether there was any liability on the defendant to pay the said amount. In this regar
