In commercial transactions, parties are bound by contract terms including interest provisions as per statutory guidelines.

JUDGMENT

Unsuccessful defendant has preferred the present appeal against the judgment and decree dated 31.03.2016 passed in O.S.No.10300 of 2010 on the file of the VI Additional City Civil Court, Chennai.

2. The parties are referred to as per rankings in the trial Court.

3. Suit is filed for recovery of a sum of Rs.10,20,000/- with interest at 12% per annum for Rs.7,50,000/- from the date of filing the suit till the date of realization. The Court below decreed the suit as prayed for with costs.

4. The brief case of the plaintiff is as follows:

The plaintiff is dealing in refined edible oils. On 06.01.2003, the plaintiff placed orders on the defendant for supply of five thousand tins of 15 kgs NETT each of “Sundew” brand super refined sunflower oil. The goods were to be delivered at the site of the plaintiff free of costs. The delivery of goods was to be effected on or before 31.03.2003. The plaintiff paid a sum of Rs.7,50,000/- as advance by a pay order and the balance of Rs.7,50,000/- was to be paid upon delivery of goods. In the event if the defendant fails to effect delivery of goods within the time stipulated, the unadjusted advance was to be returned in full to the plaintiff. The defendant accepted the terms of the purchase order and subsequently encashed the said pay order. However, the defendant failed and neglected to supply the goods to the plaintiff. The requests of the plaintiff to supply goods or to return the payment, were of no avail. Hence, the plaintiff is entitled to a simple interest at the rate of 12% per annum on the sum of Rs.7,50,000/- as the contract is commercial in nature. The defendant has neither paid the principal nor interest. Several personal contacts and reminders have not yielded any result. Hence, the suit.

5. The brief case of the defendant is as follows:

5.1 Based on the assurance and promise of the plaintiff, the defendant had invested money, procured the goods and made it available for the plaintiff, but, the plaintiff, for the reasons best known to them, suddenly started postponing in taking delivery of the goods under one pretext or the other stating that they had internal difficulties. Believing the plaintiff to be true and genuine, the defendant kept waiting only to find that the plaintiff had delayed only to see that the agreement period lapses and to cancel and refuse to take the order. Due to the act of the plaintiff, the defendant parted with his money and procured goods, but, after refusal of the plaintiff, had incurred huge loss in trying to dispose of the same elsewhere. The defendant was always ready to supply the goods as per the purchase order within the stipulated time.

5.2 The defendant filed additional written statement wherein, it has been stated that based on the contract dated 15.01.2003, the defendant agreed and entered into a contract with a Chinese Company “Dalian Oil Food Stuff Import and Export Corporation”. The Chinese supplier had informed the defendant through letter dated 22.01.2003 that the shipping material will be ready by 27.02.2003 and the defendant had received the invoice from the Chinese supplier on 18.02.2003. on 19.02.2003, the defendant sent a letter to the plaintiff to make the balance payment of Rs.7,50,000/- against the order immediately to meet the delivery schedule. On 27.02.2003 the Chinese supplier had sent another letter to the defendant and asked to remit USD 28,000/- immediately to facilitate shipping the consignment. Since the defendant had not responded, the Chinese supplier warned the defendant that the consignment is pending dispatch at his risk and costs and also asked the defendant to remit USD 28,000/- immediately on or before 14.03.2003, failing which, they would be liable to bear the warehousing charges. On 03.04.2003, the defendant sent a detailed letter to the plaintiff stating that the defendant cannot take the risk of goods worth Rs.25,00,000/- and it is not a safe trade practice, whereas, the plaintiff was not interested in performance