Bangalore District Court
Rhodium Ferro Alloys Pvt.Ltd vs Hothur Steels Partnership Firm on 28 January, 2016
IN THE COURT OF THE XXX ADDL.CITY CIVIL JUDGE,
BANGALORE CITY
DATED THIS THE 28th DAY OF JANUARY 2016
-: PRESENT: -
SRI.M.G.KUDAVAKKALIGER, B,Com., LL.M.,
XXX Addl.City Civil Judge,
Bangalore.
O.S.NO.3506/2013
PLAINTIFF : Rhodium Ferro Alloys Pvt.Ltd.
Rep.by its Director Sri.S.Nirmal
Kumar, S/o Selladurai,
Having regd.office at No.447, 1st
C Main Road, Mahalakshmipuram,
Near G.D.Naidu Hall, Rajajinagar
1st Block,
Bengaluru-560 086.
(By Pleader Sri.S.M.Darshan,
Adv.)
/VS/
DEFENDANT: 1. Hothur Steels Partnership firm,
Having its regd.office at Hothur
Arcade, R.T.O.Road, Cantonment,
Bellary-583 104.
2. Sri.Mohammed Tousif,
S/o Late H.Dhruvesh Ahamed,
Partner, Hothur Steels,
No.872, H.A.Arcade, 17th E Main,
6th Block, Koramangala,
Bengaluru-560 095.
2 O.S.No.3506/2014
3. Sri.Mohammed Asif,
S/o Late H.Dhruvesh Ahamed,
Partner, Hothur Steels,
No.872, H.A.Arcade, 17th E Main,
6th Block, Koramangala,
Bengaluru-560 095.
(Exparte)
DATE OF INSTITUTION 30-04-2014
NATURE OF THE SUIT (Suit on Suit for recovery of
Pronote, Suit for declaration and money
Possession, Suit for injunction, etc.)
DATE OF THE COMMENCEMENT
OF RECORDING OF THE EVIDENCE 07-01-2016
DATE ON WHICH THE JUDGEMENT
WAS PRONOUNCED 28-01-2016
TOTAL DURATION : YEAR/S MONTH/S DAY/S
01 08 29
(M.G.KUDAVAKKALIGER),
XXX ADDL.CITY CIVIL JUDGE,
BANGALORE.
3 O.S.No.3506/2014
JUDGEMENT
1. Plaintiff has filed this suit for recovery of a sum of Rs.85,25,059/- with interest at 24% p.a. from the date of delivery of goods up to the date of realization of amount from the defendant along with costs.
2. The following are the brief and relevant facts leading to the plaintiff's case:
That the plaintiff is the company incorporated under the Companies Act, 1956 having its registered office mentioned in the cause title of the suit under taking business of importer, manufacturer and stockiest of Ferro Alloys inoculants and carbonizers and are working since several years offering Ferro Alloys like Ferro silicon, Ferro chrome, Ferro manganese, silicon manganese, Silicon magnesium in different size and grades as per the requirements of the customers. Defendants herein is one of the customers of the plaintiff placed purchase orders for the supply of materials as mentioned in plaint para 4 O.S.No.3506/2014 No.4. As per the purchase order of the defendants, the plaintiff company, has supplied the materials as per their required size and grade to the satisfaction of the defendants by issuing excise cum tax invoice. The plaintiff has delivered the above mentioned materials as per the satisfaction of the defendants. Defendants have acknowledged the receipt of the goods to that effect, the plaintiff has produced lorry receipts along with acknowledgement in this case. As per the statement maintained by the plaintiff company, there is an outstanding balance of Rs.85,25,059/- as on 31-3-2012. The defendant has also confirmed the same. But, defendants become irregular inspite of repeated requests and reminders in regularizing their payments and also failed to make payment in time. The plaintiff has requested the defendant several times to make the outstanding dues, but the defendants on one or other pretext avoiding paying the amount. Hence, plaintiff got issued legal notice on 23-2-2012 called upon to pay the 5 O.S.No.3506/2014 amount of Rs.85,25,059/- as per the statement of accounts. It has been submitted by the plaintiff that as per the initial terms and conditions settled with the defendant by the plaintiff, the plaintiff is entitled for interest at 24% p.a. which is prevailing rate in the market, usage on outstanding. Hence, the plaintiff has prayed for recovery of the amount. Plaintiff has also filed private complaint against the defendant u/s.138 of Negotiable Instrument Act which is still pending. Now, the defendants are due Rs.85,25,059/- with interest at the rate of 24% p.a. from the date of delivery of goods up to the date of realization of the said amount.
3. After institution of the suit, as contemplated under law, suit summons came to be issued to the defendants through hands summons. Service is held sufficient. In spite of it, defendants have not appeared before the Court and hence, placed exparte on 3-12-2015 and case posted for plaintiff's evidence.
6 O.S.No.3506/2014
4. In order to substantiate the case, the Director of plaintiff company has entered in to the witness box and filed his affidavit evidence under Order 18 Rule 4 of C.P.C. and got marked 20 documents as per Exs.P.1 to 20. None have appeared on behalf of defendants and not cross- examined P.W.1. Hence, evidence of the plaintiff's side closed. Case posted for arguments.
5. I have heard the arguments on the side of the plaintiff and perused the materials placed on record.
6. On the basis of the materials placed on records and evidence both oral and documentary, the following are the points arisen for my consideration.
1. Whether plaintiff proves that defendants are liable to pay Rs.85,25,059/- towards the materials supplied with interest at the rate of 24% p.a.?
2. What order or decree?
7. My answers to the above points are as under:
Point No.1 : Partly in the affirmative. 7 O.S.No.3506/2014 Point No.2: As per the final order.
for the following:
REASONS
8. POINT NO.1: It is the case of the plaintiff that it is a company incorporated under the Companies Act, 1956 under taking business of importer, manufacturer and stockiest of Ferro Alloys inoculants and carbonizers and are working since several years offering Ferro Alloys like Ferro silicon, Ferro chrome, Ferro manganese, silicon manganese, Silicon magnesium in different size and grades as per the requirements of the customers. Defendants is its one of the customers placed purchase orders for the supply of materials and as per the purchase orders of the defendants, the plaintiff company has supplied the materials as per their required size and grade to the satisfaction of the defendants by issuing excise cum tax invoices as mentioned in plaint para No.4 and copies of the respective bills furnished. Defendants have acknowledged the receipt of the goods to that effect. As per the 8 O.S.No.3506/2014 statement maintained by the plaintiff company, there is an outstanding balance of Rs.85,25,059/- as on 31-3-2012. The defendant has also confirmed the same. But, defendants become irregular inspite of repeated requests and reminders in regularizing their payments and also failed to make payment in time. The plaintiff has requested the defendant several times to make the outstanding dues, but the defendants on one or other pretext avoiding paying the amount. Hence, plaintiff got issued legal notice on 23-2-2012 calling upon the defendants to pay the amount of Rs.85,25,059/- as per the statement of accounts and the plaintiff is entitled for interest at 24% p.a. which is prevailing rate in the market, usage on outstanding. Hence, the plaintiff has filed this suit to recover Rs.85,25,059/- with interest at the rate of 24% p.a. After institution of the suit, as contemplated under law, suit summons came to be issued to the defendants through hands summons. Service is held sufficient. In spite of it, defendants have not appeared 9 O.S.No.3506/2014 before the Court and hence, placed exparte on 3-12-2015 and case posted for plaintiff's evidence.
9. In support of the plaintiffs' case, the plaintiff being the Director of the company has filed affidavit evidence as per P.W.1 and got marked 20 documents as per Ex.P.1 to P.20. In the affidavit, the plaintiff has reiterated the entire plaint averments. He deposed that the plaintiff is the company incorporated under the Companies Act, 1956 under taking business of importer, manufacturer and stockiest of Ferro Alloys inoculants and carbonizers and are working since several years offering Ferro Alloys like Ferro silicon, Ferro chrome, Ferro manganese, silicon manganese, Silicon magnesium in different size and grades as per the requirements of the customers. Defendants is one of the customers of the plaintiff had placed purchase orders as per Ex.P.6 six in numbers, for the supply of materials and the plaintiff company has supplied the materials by issuing excise cum tax invoice as per Ex.P9 10 O.S.No.3506/2014 (20 bills). The certified copy of Lorry receipts 20 in numbers are marked at Ex.P.19 through which the goods have been supplied. The plaintiff has produced Ex.P.1 the certified copy of letter of authority, Ex.P.2 & 3 the certified copy of the cheques issued by defendant No.2 and the bank endorsements Ex.P.4 & 5. He further deposed that they have requested the defendant several times to make the outstanding dues, but the defendants on one or other pretext avoiding paying the amount. Thereafter, they issued a legal notice, certified copy of which dtd.22- 3-2012 is marked as per Ex.P.7 and the reply notice dtd.16-7-2012 issued by defendant is marked as per Ex.P.8. P.W.1 has produced Ex.P.10 & 12 statement of accounts pertaining to the defendants, which shows there is an outstanding balance of Rs.82,25,059/- as on 31-3- 2012. Ex.P.11 is the certified copy of evidence of the plaintiff (complainant) deposed in C.C.No.20575/2012, Ex.P.13 is the certified copy of email correspondences, Ex.P.14 is the certified copy of extract of minutes of 11 O.S.No.3506/2014 meeting of the board of the Directors, Ex.P.15 is the list of Directors, Ex.P.16 is the bank statement, Ex.P.17 and 18 are the certified copy of the memo issued by Axis Bank, Ex.P.20 is the judgment in C.C.No.20575/2012. He has deposed that they are entitled for interest at 24% p.a. which is prevailing rate in the market, usage on outstanding dues. Hence, the plaintiff has prayed for recovery of the amount of Rs.85,25,059/- with interest at the rate of 24% p.a. from the date of delivery of goods up to the date of realization of the said amount.
10. The evidence of PW.1 has remained unchallenged so also the documents. The defendant has been placed exparte. None have cross-examined P.W.1. There are no reasons to disbelieve the unchallenged evidence on the side of the plaintiff. In view of the unchallenged oral and documentary evidence on record, I hold that the plaintiff is entitled for the suit claim.
12 O.S.No.3506/2014
11. In the instant case, the defendant has issued cheques bearing No.594305 for Rs.75 lakhs, as per Ex.P.2 as per the counter folio dtd.24-1-2012 and another cheque bearing No.603841 dtd.3-9-2011 as per Ex.P.3 drawn on Axis Bank for Rs.30 lakhs, both cheques have been dishonoured, the bank has given endorsement on 24-1-2012 as per Ex.P.4 and 5 with an endorsement account closed. Thereafter, the plaintiff by issuing legal notice two criminal proceedings have been instituted under Sec.138 of N.I.Act and under Sec.420 of IPC. Under Sec.118 of the N.I.Act, there is a presumption that until the contrary is proved, every negotiable instrument was drawn for consideration. Even under S.139 of the Act, it is specifically stated that it shall be presumed, unless the contrary is proved that, the holder of a cheque received the cheque of the nature referred to in S.138 for discharge, in whole or in part of any debt or other liability. It is also pertinent to note that under Sub-Sec.(3) of S.25 of the Indian Contract Act, 1872, a promise, made in 13 O.S.No.3506/2014 writing and signed by the person to be charged therewith, or by his agent generally or specifically authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits is a valid contract. The legal notice has been issued on 23-2-2012 and reply notice has been received on 16-7-2012, the suit has been filed on 30-4- 2014. Hence, the suit is well within the time.
12. At this juncture, it is to be noted that the principles evolved by their Lordships of the Hon'ble High Court of Karnataka in the case of 1Shirajasab Husensab Exambi Vs. Ashok Panditappa Kaddimani has held:
"Under Order 9, rule 6 (1)(a), if the plaintiff appears but the defendant does not appear when the suit is called on for hearing and when the summons are duly served, the Court may make an order that the suit be heard ex parte. The Court may adjourn the hearing under Order 9, Rule 7. But if it does not adjourn the suit to enable the defendant to appear and contest then it must proceed to pass ex parte judgment. Even in case where the defendant 1 1999(1) Kar.L.J. 601 14 O.S.No.3506/2014 appears but later on fails to present the written statement, Order 8, Rule 10 give a mandate to the Court" the Court shall pronounce the judgment against him"..... Once a claim is made by the plaintiff and such claim is not barred by any law for the time being in force then the Court must pass a decree in favour of the plaintiff. When the defendant does not appear and the Court is satisfied that the summons have been duly served, the Court shall pass a decree as prayed for by the plaintiff unless the relief itself is prima facie barred by limitation or unknown to law. But when it involves a factual allegation, it is not the duty of the Court to go into such factual allegation and find out whether factual allegations are true or not."
13. The principles evolved by their Lordships of the Hon'ble Supreme Court in the case of Vidyadhara Vs.Mankik Rao and others2, is squarely applicable to the present facts and circumstances of the case, which runs as under:
(A) Evidence Act (1 of 1872, S.114 -Adverse inference - Party to suit - not entering the witness box- Give rise to inference adverse against him.
Where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct. In the instant case defendant no.1 alleged that the sale deed, 2 AIR 1999 SUPREME COURT 1441 15 O.S.No.3506/2014 executed by defendant No.2 in favour of the plaintiff, was fictitious and the whole transaction was a bogus transaction as only Rs.500/- were paid as sale consideration to defendant No.2. But, this plea was not supported by first defendant as he did not enter into the witness box. He did not state the facts pleaded in the written statement on oath in the trial Court and avoided the witness box so that he may not be cross-
examined. This, by itself is enough to reject the claim that the transaction of sale between second defendant and the plaintiff was a bogus transaction.
14. In the instant case, the contesting defendant has not rebutted the claim of the plaintiff and hence, the claim of the plaintiff remained unshattered, perhaps the defendant might have conceded the case made out by the plaintiff. Hence, as per the provisions of Sec.114 of the Indian Evidence Act, an adverse inference can be drawn against the defendant as defendant purposely not cross-examined P.W.1 and not stepped into the witness box to substantiate his contentions taken in the written statement. As the counsel for the defendant has not cross-examined the plaintiff and defendant not entered into the witness box 16 O.S.No.3506/2014 to give his evidence to protest the claim of the plaintiff, adverse inference can be drawn against the defendant. Accordingly, adverse inference has been drawn against the defendant.
15. On careful perusal of the principles evolved by their Lordships of the Hon'ble High Court of Karnataka and Supreme Court, with reference to the facts and circumstances of the case, though the suit summons have been duly served on the defendants, defendants have been remained exparte and the suit of the plaintiff remained unchallenged. The factual allegations made by the plaintiff company have been remained intact and unshattered. The suit of the plaintiff is well within time and prima-facie not barred by Law of Limitation. Hence, the Court will have to decree the present suit. Therefore, I hold that the plaintiff is entitled for the suit claim.
16. In the instant case, the plaintiff has claimed interest at 24% p.a. on the outstanding balance amount due. However, 17 O.S.No.3506/2014 the interest claimed by the plaintiff is on the higher side. This Court is not empowered to change the contractual rate of interest agreed between the parties. This Court is empowered to award future rate of interest from the date of filing of the suit till realization of the decreetal amount as per the prevailing rates of interest on the bank deposits under various nationalized banks as per the rules and regulations made by the Reserve Bank of India. Under the Interest Act, the party is entitled to claim interest at the 'current rate of interest' which expression is defined in Clause(b) of Sec.2 of the Interest Act, it means that, the highest of the maximum rates at which interest may be paid on different classes of deposits by different classes of schedule banks in accordance with the direction given or issued to the banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949. Therefore, if the rate of interest is awarded to the plaintiff at the rate of 12% p.a. on the balance amount due from the date of filing of the suit till the realization of 18 O.S.No.3506/2014 the entire decreetal amount, it would meet the ends of justice. Hence, this Court is of the opinion that plaintiff is entitled to interest at the rate of 12% p.a. from the date of suit till realization of Rs.85,25,059/-. Hence, I answer point No.1 partly in the affirmative.
17. POINT NO.2: In view of the discussions and reasons stated above and my answers to the above point, I proceed to pass the following:
ORDER The suit of the plaintiff is decreed with costs.
Plaintiff is entitled to recover Rs.85,25,059/- (Rupees Eighty Five Lakhs Twenty Five Thousand Fifty Nine only) from defendants along with interest at 12% p.a. from the date of filing of the suit till realization.
The defendants are hereby directed to pay the decreetal amount within two 19 O.S.No.3506/2014 months from the date of this judgment & decree.
Draw decree accordingly.
(Dictated to the Judgment Writer on computer, transcribed thereof, corrected, signed and then pronounced by me in the open Court on this THE 28th DAY OF JANUARY 2016).
(M.G.KUDAVAKKALIGER).
XXX ADDL.CITY CIVIL JUDGE, BANGALORE.
ANNEXURE WITNESSES EXAMINED FOR THE PLAINTIFF/S:
P.W.1 : S.Nirmal Kumar.
WITNESSES EXAMINED FOR THE DEFENDANTS/S:
-NIL-
DOCUMENTS MARKED FOR THE PLAINTIFF/S:
Ex.P.1 : Certified copy of letter of authority
Ex.P.2 & 3 : Certified copy of the cheques
Ex.P.4 & 5 : Bank endorsements
Ex.P.6 : Purchase orders
Ex.P.7 : Legal notice
Ex.P.P.8 : Reply notice
Ex.P.9 : Excise cum Tax invoices (20 bills).
Ex.P.10 & 12 : Statement of accounts
20 O.S.No.3506/2014
Ex.P.11 : CC of evidence in C.C.No.20575/2012
Ex.P.13 : Certified copy of email correspondences
Ex.P.14 : CC of extract of minutes of meeting
of the board of the Directors
Ex.P.15 : List of Directors
Ex.P.16 : Bank statement
Ex.P.17 & 18 : CC memo issued by Axis Bank Ex.P.19 : Lorry receipts Ex.P.20 : Judgment in C.C.No.20575/2012.
DOCUMENTS MARKED FOR THE DEFENDANTS/S:
-NIL-
(M.G.KUDAVAKKALIGER). XXX ADDL.CITY CIVIL JUDGE, BANGALORE.