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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
Rama Home Need (P) Ltd. - Appellant
Versus
Sarath Chandran - Respondent
C.S. No. 395 of 2007
Decided On : 02-12-2016
Companies Act, 1956 – Negotiable Instrument Act – Section 80 – Code of Civil Procedure, 1908 – Order VIII Rule 5 – Recovery of amount – Suit is filed for recovery of sum of Rs. 61,62,325/- together with interest at the rate of 24% p.a. for Rs. 20,00,000/- from the date of plaint till the date of realisation. – Held, It is clear that the defendant has issued a cheque Ex. P1 on 25.02.2002. – The period of limitation, i.e. three years, would expire only on 24.2.2005, whereas Ex. P6 was signed on 06.01.2005, which is well within the period of limitation. – Therefore, once the acknowledgment of liability has been made within the period of limitation, it is reviving the period of limitation. – Therefore, the suit filed by the plaintiff in the year 2006 is well within the period of limitation. – Hence, the contention of the defendants counsel has no legs to stand. – In view of the above discussion, the judgments relied on by the defendant is not applicable to the case on hand. – Since the above judgment itself held that acknowledgment must be made before expiry of limitation prescribed for suit. – In the case on hand, acknowledgment of liability was made in writing within the period of limitation. – It can be easily concluded that the plaintiff has advanced a sum of Rs. 20,00,000/- as loan to the defendant and that the defendant has also agreed to pay the same. – Accordingly, this issue is answered in favour of the plaintiff and against the defendant. – It is very clear that when there is no specific rate mentioned in the instrument, interest at the rate 18% has to be calculated. – Therefore, this Court is of the view that if 18% interest is calculated, the same will meet the ends of justice. – Accordingly, the plaintiff is entitled to interest at the rate of 18% p.a. on the amount of Rs. 20,00,000/- from the date of issuance of cheque i.e. 22.5.2002 till the filing of suit and, thereafter at 6% from the date of the suit till the date of realisation. – Order Accordingly
N. SATHISH KUMAR, J.
1. The suit is filed for recovery of sum of Rs. 61,62,325/- together with interest at the rate of 24% p.a. for Rs. 20,00,000/- from the date of plaint till the date of realisation. The brief facts of the case of the plaintiff are as follows:
The plaintiff is a company registered under the Companies Act, 1956. The defendant borrowed a sum of Rs. 20,00,000/- from the plaintiff as a short loan promising to repay the said amount with interest at the rate of 24% per annum, on 16.4.2001 by way of cheque, bearing No. 670980, drawn on Tamil Nadu Mercantile Bank Limited. The defendant paid interest for three months and thereafter, he had committed default in payment of interest. The plaintiff made repeated requests to pay the principal amount together with interest thereon.
2.1. While so, the defendant issued a cheque for Rs. 20,00,000/- bearing No. 791583 dated 22.05.2002. When the said cheque was presented for encashment, it was returned with the endorsement "insufficient funds". However, the defendant made a request to the plaintiff not to proceed further and promised the plaintiff to pay the amount. As the defendant has not chosen to make any steps to settle the amount, the plaintiff sent a Registered letter dated 23.7.2003, followed up by a reminder dated 27.08.2003, for which the defendant sent a reply stating that they entered into a Memorandum of Understanding with M/s. KLX Inc., of Canada to sell 40% of their share; that they were planning for an outright purchase of their factory to the Chettinad Group of Chennai; that they were trying some other sources to make part payment; that the entire transaction would be completed very shortly; and further assured to close the loan at the earliest. Even though the defendant admitted the liability and promised to settle the dues, they failed to make payment.
2.2. Therefore, the plaintiff issued a legal notice to the defendant on 07.11.2004. Thereafter, the defendant sent a letter dated 06.01.2005 to the plaintiff stating that they signed a Joint Venture Agreement with a Canadian company, wherein they mutually agreed to disburse the amount on or before 31.3.2005. In the said letter, the defendant has also given assurance to settle the amounts. But the defendant has not come forward to settle the dues as promised. Hence, the plaintiff has no other option but to file a suit for recovery of amount.
2. The case of the defendant, in nutshell, is as follows:
According to the defendant, the suit is time barred and the defendant has never acknowledged the debt. The defendant never accepted to repay the debt with interest at the rate of 24% and he never paid interest to the plaintiff company as stated in the plaint. It is stated that the plaintiff and the defendant are close relatives. The plaintiff has not disclosed the purpose of loan said to have been obtained by the defendant and, in whose favour the alleged cheque was issued. It is also stated that the amount claimed by the plaintiff company is exorbitant in nature and the same is not maintainable in law. Further, when there is no contract for interest, then the claim for interest in the suit is not maintainable in law. Hence, the defendant prayed for dismissal of the suit.
3. On the above pleadings, originally, this Court, on 29.04.2011, has framed the following issues:
1. Whether it is true that the defendant has not received any amount from the plaintiff?
2. Whether there is a contract for payment of interest?
3. Whether the plaintiff is entitled for interest® 24%?
4. Whether the suit is time barred?
5. To what other relief is the plaintiff entitled to?
4. On the side of the plaintiff, P.W. 1 was examined and Exs. P1 to P8 were marked. On the side of the defendants, D.W. 1 was examined and Exs. D1 to D3 were marked. The details of the same are hereunder:
Exhibits produced on the side of the plaintiff:
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