Printed interest conditions on invoices are unilateral and not binding without evidence of mutual assent. Courts may exercise discretion to reduce excessive interest rates to a reasonable, compensatory level when no specific agreed-upon contractual rate exists in a commercial transaction.

JUDGMENT :

Bipin Gupta, J.

1. The present Civil First Appeal has been preferred by the defendant-appellant assailing the judgment dated 23.10.2019, passed by learned Commercial Court, Ajmer in Civil Suit No. 189/2018 (124/2014) CIS No. 123/2018, whereby the suit instituted by the plaintiff-respondent for recovery of amount has been partly decreed against the defendant-appellant.

2. The controversy, in a narrow compass, is that a suit came to be filed by the plaintiff-respondent against the defendant- appellant for recovery of amount to the tune of Rs.10,24,017/-, contending therein that on 18.03.2008, the plaintiff-respondent, who was a dealer of M/s. Schneider Electric India Pvt. Ltd., received a purchase order from the defendant-appellant for supply of electric switchgear worth Rs. 60,43,356/-. The supplies were effected from 22.04.2008 till 19.05.2008. However, the defendant- appellant did not take delivery of the goods and, therefore, the plaintiff-respondent was compelled to store the goods at its premises/godown. Upon being asked the reason for not taking delivery of the goods, the defendant-appellant replied that the requirements had changed and, therefore, a fresh purchase order would be placed according to the new requirements.

2.1 On 13.08.2008, a fresh purchase order was issued for material amounting to Rs.44,51,000/-. In compliance with the fresh purchase order, material worth Rs.44,00,000/- was supplied from 20.08.2008 to 10.12.2008. However, the defendant-appellant paid only an amount of Rs.40,00,000/-. Thus, a remaining amount of Rs. 4,00,000/- was due and payable.

2.2 The plaintiff-respondent, in his plaint, claimed that in its books of account, against the said purchase order, a principal amount along with agreed interest amounting to Rs.8,30,774/- was outstanding. It was also pleaded that, against the purchase order dated 18.03.2008, since the material was not taken by the defendant-appellant, the plaintiff-respondent had to pay a penalty to M/s. Schneider Electric India Pvt. Ltd., amounting to Rs.1,93,243/-. Thus, a suit was filed for recovery of total amount of Rs.10,24,017/-.

2.3 The defendant-appellant filed a detailed written statement admitting the fact of the purchase order for supply of switchgear worth Rs.60,43,356/-. It was further contended that the material supplied pursuant to the subsequent purchase order was not of standard quality and, therefore, a debit note of Rs.4,00,000/- was issued to the plaintiff-respondent. It was also contended that the penalty allegedly paid by the plaintiff-respondent to M/s. Schneider Electric India Pvt. Ltd., amounting to Rs.1,93,243/-, could not be recovered from the defendant-appellant, in absence of any privity of contract. On the aforesaid grounds, dismissal of the suit was prayed for by the defendant-appellant.

3. On the basis of the pleadings of the parties, the learned Commercial Court framed as many as eleven issues which reads as under:

3.1 In support of its pleadings, the plaintiff-respondent examined two witnesses and produced various documents in evidence. On the other hand, the defendant-appellant examined only one witness in support of his case.

3.2 Issue Nos.1 and 3 were decided in favour of the plaintiff. Issue No.2 was decided against the plaintiff. Issue No. 4 was partly allowed in favour of the plaintiff wherein the it was held entitled to receive the outstanding amount of Rs.4,00,000/- along with agreed interest @ 24% from the date of service of notice i.e. 01.12.2011. Issue No. 5 was decided against defendant. Issue No. 6 was partly allowed in favour of the defendant. Lastly, Issue Nos. 7 to 10 were also decided against defendant.

3.3 Upon appreciation of the oral and documentary evidence available on record and on the basis of finding of the issues, the learned Commerci