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2024 Supreme(Mad) 1943

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SAKTHIVEL, J.
M/s. Metal Forms Private Limited – Appellant
Versus
M/s. Shiv Machine Tools - Respondent
S.A. No. 428 of 2021
Decided on : 30-10-2024

Advocates:
Advocate Appeared:
For the Appellant : Mr.R.Bharath Kumar

The court has discretion to award pendente lite and post decree interest even in the absence of a contractual provision, considering the conduct of the parties involved.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Second Appeal - Plaintiff sought to set aside the Judgment and Decree of the First Appellate Court modifying the Trial Court's decree regarding recovery of money for non-supply of machines - The courts below failed to award pendente lite interest and post decree interest despite the defendants' conduct prolonging the proceedings. (Paras 8, 12, 14)

(B) Interest - The court held that even in the absence of a contract for default interest, the court has the discretion to award pendente lite interest and post decree interest based on the nature of the transaction and the conduct of the parties. (Paras 12, 14)

Facts of the case:
The plaintiff, a registered company, placed orders for two power press machines but the defendants failed to deliver them, leading to a suit for recovery of the advance payment. The Trial Court awarded partial relief, which was modified by the First Appellate Court.

Findings of Court:
The court found that the plaintiff was entitled to pendente lite interest and modified the decree to include interest from the date of the plaint.

Issues: The main issues were whether the First Appellate Court was correct in denying pendente lite interest and whether the delay was attributable to the defendants.

Ratio Decidendi: The court ruled that the discretion to award interest exists even without a contractual provision, emphasizing the importance of the defendants' conduct in the proceedings.

Result: Second Appeal allowed, modifying the decree to include interest.

JUDGMENT :

Prayer: Second Appeal filed under Section 100 of the Code of Civil Procedure, 1908, praying to set aside the Judgment and Decree dated 6th July, 2019 made in A.S.No. 07 of 2017 on the file of the IV Additional City Civil Court, Chennai, modifying the Judgment and Decree dated 6th September, 2016 made in O.S.No.3347 of 2006 on the file of the XIII Assistant City Civil Court, Chennai.

The plaintiff has filed this Second Appeal under Section 100 of the Code of Civil Procedure, 1908, against the Judgment and Decree dated 06th July, 2019 passed by the ‘IV Additional City Civil Court, Chennai’ [hereinafter ‘First Appellate Court’] in A.S.No.07 of 2017, modifying the Judgment and Decree dated 06th September, 2016 passed in O.S.No. 3347 of 2006 by the ‘XIII Assistant City Civil Court, Chennai’ [hereinafter ‘Trial Court’].

2. For the sake of convenience, hereinafter, the parties will be referred to as per their array before the Trial Court.

3. Mr.R.Bharath Kumar, learned Counsel for the appellant/plaintiff is before this Court through Video Conferencing mode and there is no representation on behalf of the respondents.

4. Case of the Plaintiff:

4.1. The plaintiff is a registered company under the Companies Act, 1956, carrying on business of fabrication for more than 20 years. On the first week of July 2005, they were in urgent need of two numbers of power press machines. Hence, the plaintiff placed Purchase Order Nos.125 and 126 dated 11.07.2005 for the purchase of two Mankoo make power press machines, one with 250 tons capacity and another with 100 tons capacity, for the value of Rs.7,60,000/- and Rs.3,75,000/- respectively. The plaintiff paid a sum of Rs.2,83,750/- by way of Cheque bearing No.905402, dated 12.07.2005 drawn on Tamil Nadu Mercantile Bank Limited towards 25% advance payment for the aforesaid machineries. The defendants failed to consign the said power press machines within the time period agreed between the plaintiff and the defendants in the contract. The defendants deliberately failed to supply the machines without any valid or acceptable reasons. Due to the non-supply of machines, the plaintiff could not fulfil the time bound orders placed by their reputed customers. Hence, the plaintiff issued Legal Notice dated September 19, 2005 calling upon the defendants to repay the advance money along with 18% interest. The defendants issued Reply dated November 21, 2005, denying their liability. Therefore, the plaintiff filed the Suit for recovery of money paid by him to the defendants viz., a sum of Rs.3,18,288/- with interest at the rate of 18% per annum on Rs.2,83,750/-from the date of plaint till the date of realization and for costs.

5. Case of the Defendants:

5.1. The sum and substance of the Written Statement filed by the defendants is that the first defendant is the distributing agent of ‘M/s.Mankoo Machine Tools Private Limited’ (henceforth 'Mankoo Pvt. Ltd.'). Mankoo Pvt. Ltd. has not been added as a party to the Suit and hence, the Suit is bad for non-joinder of just and proper party.

5.2. That apart, the plaintiff placed two orders vide Purchase Order Nos.125 and 126 dated 11.07.2005, one for 250 tons capacity machine and another for 100 tons capacity machine with their own terms, without referring to the proposals dated 01.07.2005 and 11.07.2005 given by the defendants. One of their terms is that the transportation is on the plaintiff. The plaintiff has not prescribed any time limit in their purchase order. The defendants never agreed to deliver the machines to the plaintiff within one week. On receiving the plaintiff’s purchase order, the defendants placed purchase order for the said machines with Mankoo Pvt. Ltd. vide Purchase Order No.SMT/3732 dated 14.07.2005, by making necessary payment. The defendants had performed their part of the contract by placing the orders with Mankoo Pvt. Ltd. immediately after receiving purchase order from the plaintiff and there is no default on the defendants.

5.3. On information

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