Madras High Court
Mr.Sivakumar vs Surya Exports And Imports on 9 June, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
C.S.(Comm. Div) No.591 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on 25.04.2022
Judgment pronounced on 09.06.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Civil Suit(Comm.Div) No.591 of 2018
Mr.Sivakumar
S/o.Boologapandian,
Proprietor,
Mutharamman and Co.,
54, G.V.T. Complex,
Varadarajapuram, Nazrethpuram,
Chennai – 602 103. ... Plaintiff
vs.
1.Surya Exports and Imports
A firm rep. by its Proprietor
Mr.N.Surya Srinivas,
S/o. Bhaskara Rao,
Flat No.15, Rams Flats,
Second Floor,
New No.5, Old No.2-A,
Madhavan Nair Road, Mahalingapuram,
Chennai – 600 034.
2.Indus Ind Bank Limited,
Rep. by its Manager,
3, Village Road, Nungambakkam,
Chennai – 600 034.
_____________
https://www.mhc.tn.gov.in/judis
Page No.1 of 27
C.S.(Comm. Div) No.591 of 2018
3.Indian Bank
Rep. by its Assistant Regional Manager,
W-100, II Avenue,
Anna Nagar, Chennai – 600 040. ... Defendants
The suit is filed under Order VI Rule 1 of O.S. Rules r/w Order
VII Rule 1 of CPC to direct the first and second Defendants to pay to the
Plaintiff, either jointly or severally, a sum of Rs.1,15,09,628/- ( Rupees one
crore fifteen lakhs nine thousand six hundred and twenty eight only) due
under the Bill No.0058817OC0000012 together with interest at 18% per
annum, principal amount of Rs.1,06,33,863/-, from the date of plaint till the
date of realization.
For Plaintiff : Mr.Sharath Chandran
for M/s.Govind Chandrasekar
For Defendants : M/s.J.Manikandan for D1
Mr.E.OM.Prakash
Senior Advocate
for M/s.Ramalingam & Associates
for D-2
Mr.V.Kalyanaraman
for M/s.Aiyar and Dolia for D-3
_____________
https://www.mhc.tn.gov.in/judis
Page No.2 of 27
C.S.(Comm. Div) No.591 of 2018
JUDGMENT
The suit was filed by a seller of goods to the first Defendant seeking to recover the sum of Rs.1,15,09,628/-, jointly and severally, from the first and second Defendants together with interest at 18% per annum on the principal sum of Rs.1,06,33,863/- from the date of plaint till the date of realization.
2. The Plaintiff is a proprietary concern, represented by Mr.Sivakumar, Proprietor. The Plaintiff is engaged in the business of selling construction materials, including ferrous and non-ferrous metal products, wood scrap, rubber waste, etc. The first Defendant requested the Plaintiff to supply thermo-mechanically treated (TMT) bars. Based on such request, the Plaintiff supplied TMT bars to the first Defendant from time to time and received payments in respect thereof. Upon receipt of the proforma invoice dated 22.05.2017 from the Plaintiff offering to supply TMT bars at Rs.38.20 per kg., the first Defendant issued the purchase order dated 23.05.2017 (PO No.006-5/170523/05-006/M-AJAY/TMT). The purchase order mandated that the payment for the consignment was to be made on a bill of exchange payable 90 days after the date of acceptance(at sight) by the first _____________ https://www.mhc.tn.gov.in/judis Page No.3 of 27 C.S.(Comm. Div) No.591 of 2018 Defendant's banker, the second Defendant herein. Pursuant thereto, the goods were dispatched and delivered to the first Defendant under Invoice Nos.139 to 150 for an aggregate sum of Rs.1,02,49,709/-. According to the Plaintiff, the bill of exchange dated 24.05.2017 was also accepted for payment by the first Defendant and co-accepted by his banker, the second Defendant herein, albeit without making endorsements thereon. The Plaintiff had discounted the bill with his banker, the third Defendant herein and, therefore, the third Defendant, by a collection bill dated 24.05.2017, requested the second Defendant to convey its acceptance through the Structured Financial Messaging System (SFMS) and requested payment on the bill of exchange upon its maturity.
3. In response thereto, the Plaintiff stated that the second Defendant, by a SFMS message dated 29.05.2017, accepted the bill of exchange. According to the Plaintiff, the message was a ''IFN754'' message, which is used to indicate that the accepting bank unconditionally undertakes to make payments. The Plaintiff asserted that the undertaking by the second Defendant is on the strength of a letter of credit in favour of the first Defendant. The Plaintiff stated that both the first and second Defendants _____________ https://www.mhc.tn.gov.in/judis Page No.4 of 27 C.S.(Comm. Div) No.591 of 2018 failed to honour the bill of exchange, subsequently, on the false pretext that the goods were returned by the buyer/first Defendant on account of quality issues. The Plaintiff stated that the buyer not only took delivery of the goods but sold the same to third parties. The Plaintiff further stated that no quality related issues were raised contemporaneously or otherwise by the first Defendant. On account of the refusal by the first and second Defendants to honour the bill of exchange, the third Defendant debited the account of the Plaintiff for a sum of Rs.1,02,49,709/- along with penal interest (until 06.11.2017) of Rs.3,84,154/-. Thus, the Plaintiff stated that it had to pay the third Defendant for goods sold by it to the first Defendant.
4. The Plaintiff alleged that the first Defendant repeatedly engaged in fraudulent activities by taking delivery of goods and not paying for the same. In such circumstances, the Plaintiff had previously filed C.S.No.69 of 2018 before this Court. The Plaintiff also stated that the second Defendant's obligation to pay for the goods flows from its unconditional acceptance of the bill of exchange. The suit claim arose in the above mentioned facts and circumstances.
_____________ https://www.mhc.tn.gov.in/judis Page No.5 of 27 C.S.(Comm. Div) No.591 of 2018
5. In spite of receipt of suit summons, none of the Defendants filed a written statement within the stipulated time and, therefore, forfeited their right to file the same.
6. The Plaintiff adduced oral evidence through Mrs.Shanmugadevi, the Finance Officer of the Plaintiff, who was examined as P.W.1. In course of the examination in chief of P.W.1, 12 documents were exhibited as Exs.P1 to P12. P.W.1 was cross examined on behalf of the first and second Defendants. Pursuant to summons issued in Application No.7749 of 2019, Mr.K.N.Choudhary, Senior Manager of Indian Bank(the third Defendant), Anna Nagar Branch, was examined as C.W.1 for the limited purpose of producing a letter dated 31.07.2018, which was exhibited as Ex.C1. Thereafter, pursuant to order dated 17.10.2019 in Application No.7750 of 2019, Mr.K.V.S.Prakash Rao, the retired AGM of Indian Bank, was examined as C.W.2.
7. Oral submissions on behalf of the Plaintiff were advanced by Mr.Sharath Chandran, learned counsel; on behalf of the first Defendant by Mr.J.Manikandan, learned counsel; on behalf of the second Defendant by _____________ https://www.mhc.tn.gov.in/judis Page No.6 of 27 C.S.(Comm. Div) No.591 of 2018 Mr.E.Om Prakash, learned senior counsel; and on behalf of the third Defendant by Mr.V.Kalyanaraman, learned counsel.
8. Learned counsel for the Plaintiff submitted that the suit is for recovery of amounts due and payable to the Plaintiff for the supply of TMT bars to the first Defendant. Such supply was effected pursuant to the proforma invoice dated 22.05.2017(Ex.P2), the purchase order dated 23.05.2017 (Ex.P3) and the bill of exchange dated 24.05.2017(Ex.P4). By drawing reference to Ex.P3, it was submitted that the payment terms are indicated in the purchase order. The said purchase order discloses the particulars of the first Defendant's banker and stipulates that the payment would be made within 90 days from the bill of exchange date. Significantly, he pointed out that the bank required the original signed commercial invoice and the original bill of exchange for purposes of acceptance of such bill of exchange for payment. With reference to Ex.P4, it was pointed out that the bill of exchange provided for payment to the third Defendant, which acted as the Plaintiff's bank, and had discounted the bill previously. According to the Plaintiff, the bill of exchange indicates categorically that it was drawn by the Plaintiff on the first Defendant(drawee). _____________ https://www.mhc.tn.gov.in/judis Page No.7 of 27 C.S.(Comm. Div) No.591 of 2018
9. The Plaintiff next referred to the collection schedule dated 24.05.2017(Ex.P5), which was issued by the third Defendant to the second Defendant. By this document, which contains the details of drawer and drawee, the second Defendant was called upon to provide its co-acceptance to the third Defendant through SFMS. It further provided that the second Defendant should pay the amounts due on the bill of exchange upon maturity. The Plaintiff also referred to the acceptance of the bill of exchange by the second Defendant by way of a chain of email correspondence. In particular, the Plaintiff referred to the email of 31.05.2017 from the third Defendant to the second Defendant and concluded by referring to the email of 06.06.2017 from the second Defendant to the third Defendant confirming that payment would be effected against three bills, including bill No.12 for Rs.1,02,49,709/- (collectively Ex.P7).
10. By relying on Section 37 of the Negotiable Instruments Act,1882(the NI Act), the Plaintiff contended that the acceptor of a bill of exchange is liable as a principal debtor in the absence of a contract to the contrary. By drawing reference to the acceptance of the bill of exchange by _____________ https://www.mhc.tn.gov.in/judis Page No.8 of 27 C.S.(Comm. Div) No.591 of 2018 the second Defendant under Ex.P7, the Plaintiff pointed out that the second Defendant is liable to make payments.
11. The second Defendant, on the contrary, denied its liability for the suit claim. By drawing reference to Ex.P4, the second Defendant submitted that it is not the drawer, drawee or acceptor in respect of the bill of exchange. With reference to Exs.P5 and P7, the second Defendant submitted that Ex.P5 provides for protest in case of non payment, thereby indicating that this transaction was not supported either by a letter of credit or bank guarantee. According to the second Defendant, it acted as a collection agent for the first Defendant. In the absence of a bank guarantee or letter of credit, the second Defendant contended that it is not liable to make payment for supply of goods by the Plaintiff to the first Defendant. In this regard, the second Defendant referred to the cross examination of P.W.1 and pointed out that the answers of P.W.1 indicate that the transaction was between the Plaintiff and the first Defendant and that the second Defendant is not referred to in the bill of exchange. _____________ https://www.mhc.tn.gov.in/judis Page No.9 of 27 C.S.(Comm. Div) No.591 of 2018
12. The first Defendant submitted that it is not liable to make payments in view of the supply of defective goods by the Plaintiff. The first Defendant further stated that the said defective goods were returned to the Plaintiff. According to the first Defendant, by communication dated 22.08.2017(Ex.P9), the first Defendant had requested for an extension of 30 days to make payment because the first Defendant was unaware about the supply of defective goods at that point of time. The third Defendant explained the object and purpose of SFMS as a messaging system and produced RBI circulars in respect thereof.
13. Upon consideration of the contentions of the parties, the principal questions relate to the liability of the first and second Defendants in respect of the suit claim. The pro-forma invoice of the Plaintiff (Ex.P2) provides that the Plaintiff is willing to supply 2,55,540 kgs of TMT bars at the price of Rs.38.20 per kg thereby aggregating to a sum of Rs.1,02,49,709/-. Ex.P3 (the purchase order) was issued by the first Defendant to the Plaintiff. Under the purchase order, the first Defendant agreed to purchase 2,55,540 kgs of TMT bars for an aggregate sum of Rs.1,02,49,709/-. The first Defendant further agreed that payment would _____________ https://www.mhc.tn.gov.in/judis Page No.10 of 27 C.S.(Comm. Div) No.591 of 2018 be made subject to acceptance within 90 days from the bill of exchange date. The purchase order specified the name and other particulars of the first Defendant's bank, i.e. the second Defendant. Significantly, it specified the documents required for acceptance and payment by the bank. Ex.P4(the bill of exchange) is dated 24.05.2017. This document was issued by the Plaintiff as the drawer. It also specified the due date of 22.08.2017. This document instructs the drawee (the first Defendant) to pay Indian Bank the sum of Rs.1,02,49,709/- within 90 days from the invoice date. The document also enumerates the 12 invoices(Invoice Nos.139 to 150) and the date and value of each invoice. As correctly contended by the second Defendant, the bill of exchange does not indicate the acceptance thereof for payment by the second Defendant. Indeed, Ex.P4 does not bear any indication of acceptance of the bill of exchange even by the drawee/first Defendant. Therefore, the rest of the evidence should be examined in such regard. It should be noticed that a bill of exchange is a negotiable instrument as per Section 13 of the NI Act. Consequently, before examining the evidence, it is necessary to refer to the provisions of the NI Act, including Section 37 thereof, which was relied upon by the Plaintiff. _____________ https://www.mhc.tn.gov.in/judis Page No.11 of 27 C.S.(Comm. Div) No.591 of 2018
14. A bill of exchange is defined in Section 5 of the NI Act as follows:
''an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.'' Section 37 of the NI Act is as under:
''37. Maker, drawer and acceptor principals.__ The maker of a promissory note or cheque, the drawer of a bill of exchange until acceptance, and the acceptor are, in the absence of a contract to the contrary, respectively liable thereon as principal debtors, and the other parties thereto are liable thereon as sureties for the maker, drawer or acceptor, as the case may be.'' (emphasis added) Section 7 of the NI Act defines drawer and drawee as follows:
''7. ''Drawer'', ''Drawee''.__ The maker of a bill of exchange or cheque is called the ''drawer'', _____________ https://www.mhc.tn.gov.in/judis Page No.12 of 27 C.S.(Comm. Div) No.591 of 2018 the person thereby directed to pay is called the ''drawee''.
The expression acceptor is also defined in Section 7 as follows:
''Acceptor''.__ After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the ''acceptor''.
Section 7 also defines the expression payee as follows:
''Payee''.___ The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the ''payee''.
Section 33 deals with the acceptor of a bill of exchange and is as follows:
“33. Only drawee can be acceptor except in need or for honour-
No person except the drawee of a bill of exchange, or all or some of several drawees, or a person named _____________ https://www.mhc.tn.gov.in/judis Page No.13 of 27 C.S.(Comm. Div) No.591 of 2018 therein as a drawee in case of need, or an acceptor for honour, can bind himself by an acceptance.”
15. From the above provisions, it is evident that, in the absence of a contract to the contrary (see added emphasis in Section 37 supra), in the context of a bill of exchange, only the drawer until acceptance, and the acceptor thereafter is liable as principal debtor. If this provision is read with Section 33, only the drawee, including a person named in the bill as a drawee for need, or an acceptor for honour are liable as principal debtors. Any other party to the bill would be liable only as surety unless there is a contract to the contrary. In this case, the bill does not indicate that there is a drawee in case of need. The requirements of Section 100 of the NI Act in relation to an acceptor for honour, whereby the bill should be noted or protested for non-acceptance or better security were also not satisfied. Indeed, the bill does not indicate acceptance by the first Defendant in the manner prescribed by Section 7. In the absence of acceptance, the first Defendant may still be liable albeit for failure to accept the bill, but the liability of the first and second Defendants to make payment as per the bill of exchange is dependent on proof of a contract under which liability is _____________ https://www.mhc.tn.gov.in/judis Page No.14 of 27 C.S.(Comm. Div) No.591 of 2018 fastened on them. As regards the second Defendant, such contract may even impose liability as primary obligor or principal debtor and not only as surety. With this background, the evidence on acceptance should be examined.
16. As regards the first Defendant, upon receipt of the proforma invoice, he issued the purchase order (Ex.P3). The purchase order indicated the name of the buyer's bank and also the buyer's consent to pay within 90 days from the date of the bill of exchange. The goods were supplied in response thereto under Invoice Nos.139 to 150 for an aggregate sum of Rs.1,02,49,709/-. As the buyer of goods, the first Defendant is liable even de hors the bill of exchange. Turning to the liability of the second Defendant, under Ex.P5, as specified in the purchase order, the third Defendant enclosed the purchase order, invoices, transport documents, etc. and called upon the second Defendant to communicate its acceptance to the third Defendant through SFMS. In response thereto, emails were exchanged between the second and third Defendants. The first email in the exchange is the email of 31.05.2017 from the third Defendant to the second Defendant, with a copy to the first Defendant. Significantly, all the emails, including _____________ https://www.mhc.tn.gov.in/judis Page No.15 of 27 C.S.(Comm. Div) No.591 of 2018 this email, specify the subject as ''confirmation of bills co-accepted in IFN 754''. By this email, the third Defendant informed the second Defendant that it was awaiting the second Defendant's reply regarding the acceptance of the bill. Upon receipt of a further email on 05.06.2017 from the third Defendant, by email of 06.06.2017, the second Defendant stated as under:
''Dear sir, With regards to below bills we are confirming that payment will be effected on due date as per below mentioned; Hence acceptance will be released with the Narration of ''payment will be effected on due date'' for upcoming transaction.
1.bill no 010 for Rs.1,01,63,531.00(your sfms dated 10.05.2017) Due date 30.07.2017.
2.bill no 011 for Rs.1,00,57,549.00((your sfms dated
17.05.2017) Due date 05.08.2017.
3.bill no 012 for Rs.1,02,49,709.00((your sfms dated 29.05.2017) Due date 22.08.2017.”
17. From the above chain of emails (Ex.P7), it is evident that the second Defendant agreed to make payment on the due date as regards three bills. The third bill is for a sum of Rs.1,02,49,709/- and corresponds to the suit claim. These emails are self-evidently between the second and third Defendants with a CC to the first Defendant. The oral evidence of _____________ https://www.mhc.tn.gov.in/judis Page No.16 of 27 C.S.(Comm. Div) No.591 of 2018 Mr.K.V.S.Prakash Rao, former AGM, Indian Bank, who was examined as C.W.2, throws further light on this issue. The relevant questions and answers from the deposition of C.W.2 are set out below:
Question: Is it correct to state that all transmission of SFMS messages concerning the suit transaction was handled by you?
Answer : Yes Question: Can you briefly explain he transaction pertaining to Bill No.12?
Answer : The Plaintiff is our esteemed customer and we have done many successful transactions prior to Bill No.12. Mutharaman has submitted the specific Bill No.12, and the same we have sent to the second Defendant and second Defendant has duly sent S.F.M.S. 754 duly admitting the the bill and confirmed the payment on due date. Subsequently,the Defendant Bank confirmed the payment by mail also. Usually in the banking terminology S.F.M.S. 754 messages is deemed for the confirmation of payment only and it was mentioned that we had transaction between Indian Bank, Anna Nagar with second Defendant. We are not directly dealing with the drawee, the _____________ https://www.mhc.tn.gov.in/judis Page No.17 of 27 C.S.(Comm. Div) No.591 of 2018 first Defendant. In spite of our repeated reminders also we have not received the payments.
Question:Will any Bank accept a bill issuing IFN 754 that it is local collection?
Answer : 7 series is exclusive to LC. A bank will give a 754 acceptance if it is backed by some limits like OD/OCC limits. The all the transactions in serial No.1 to 7 in Ex.C-1 was made using IFN 754 acceptance. In all above seven bill payments was received by Indian Bank from Indus Ind Bank.
Question: According to you, per banking norms who is responsible to make payment for a bill accepted under 754?
Answer : In Banking Industries whether it is private bank or Government Bank if 754 message given for a specific bill, it is the honour and duty of the accepting banker to make the payment to thereafter beneficiary customer banker. These are the laws specified by RBI and must be followed by all member banks.
18. Several questions flow from the above evidence. Whether the collection schedule read with the emails qualify as a contract in relation to _____________ https://www.mhc.tn.gov.in/judis Page No.18 of 27 C.S.(Comm. Div) No.591 of 2018 payment of amounts due under the bill of exchange? If so, between whom is the contract? Does this contract have the effect of varying the prescription under Section 37 of the NI Act by imposing the obligation on the second Defendant as principal debtor? If it is a contract between the two banks, can the Plaintiff sustain this action on the basis of the said contract? These questions are addressed next.
19. Section 37 of the NI Act does not prescribe any requirements for a contract to the contrary, whether with regard to form, parties, etc. In The Bank of Hindustan Limited, Madras v. N. Govindarajulu Naidu, 1933- 23-L.W.961, a Division Bench of this Court recognised that the prescription under Section 37 of the NI Act marks a departure from English law inasmuch as it does away with the distinction between an accommodation bill and other bills and that “the only method of changing the position of the parties is by a contract to the contrary.” The admitted position, in this case, is that second Defendant was the buyer/first Defendant's bank and the third Defendant was the seller/Plaintiff's bank. As the seller's bank, the third Defendant discounted the bill. Subsequently, in correspondence between the seller's bank and the buyer's bank, which were copied to the buyer, the _____________ https://www.mhc.tn.gov.in/judis Page No.19 of 27 C.S.(Comm. Div) No.591 of 2018 buyer's bank, on being called upon, agreed categorically that it will pay amounts due under the bill of exchange to the seller's bank. In my view, this qualifies as a contract under which the buyer's bank agreed to co-accept the bill for payment as a principal debtor and not as surety in the event of default by the buyer. By a separate communication dated 22.08.2017, the buyer inter alia stated as under:
''With further reference to our discussion and agreement, we hereby consent our payment against our invoice No.IBC0007170005427 due date 22.08.2017 of Rs.1,02,49,709/- (Rupees one crore two lakhs fourty nine thousand seven hundred and nine only) to be extended by another 30 days from date of acceptance September 2017.'' On the basis of the above communication, it is evident that the first Defendant/Buyer accepted the bill in September 2017 and sought an extension of 30 days to honour the bill. Although such acceptance was not by making an endorsement on the bill as prescribed in Section 7 of the NI Act, for reasons set out earlier, the liability of the first Defendant as the buyer of goods is not contingent on valid acceptance of the bill.
_____________ https://www.mhc.tn.gov.in/judis Page No.20 of 27 C.S.(Comm. Div) No.591 of 2018
20. When the evidence on record is considered cumulatively, it may be concluded that there is a contract that has the effect of varying the prescription in Section 37 read with Section 33 of the NI Act as regards acceptance of liability as a primary obligor by a person other than the drawee or drawee in need or acceptor for honour. On the facts of this case, however, it does not make a material difference whether the second Defendant's obligation is as principal debtor under a contract to the contrary or as surety because the first Defendant failed or refused to pay for goods received, thereby triggering the liability of the second Defendant even if considered as a surety.
21. As an aside, it is pertinent to note that, in the realm of private law, parties are at liberty to enter into any contract or transaction unless prohibited by law, void or voidable. Consequently, the expression “subject to a contract to the contrary” is typical in statutes like the Sale of Goods Act, 1930, the Transfer of Property Act, 1882 and the Indian Contract Act, 1872. Besides, private law statutes have consistently been construed as non- exhaustive with even fairly common forms of security such as hypothecation of movables not being dealt with by statute. _____________ https://www.mhc.tn.gov.in/judis Page No.21 of 27 C.S.(Comm. Div) No.591 of 2018
22. The only issue that remains is whether the Plaintiff is entitled to enforce this contract. The Plaintiff pleaded that the third Defendant, after discounting the bill, demanded and received payment, including penal interest, from the Plaintiff/drawer of the bill. As such, the Plaintiff is the beneficiary under the contract by which the second Defendant agreed to pay the bill as co-acceptor. The said contract was entered into both on behalf of and for the benefit of the Plaintiff. Hence, the Plaintiff is entitled to enforce the contract.
23. Before concluding, another aspect should be noticed. On earlier occasions, payments were made by the second Defendant to the third Defendant as regards bills of exchange drawn by the Plaintiff on the first Defendant and sent to the second Defendant for acceptance. Ex.C1, which is a communication dated 31.07.2018, provides details of several bills of exchange which were accepted for payment by the second Defendant previously. Reference may be made to Bill Nos.002 to 023, which were realized between 24.03.2017 and 18.07.2017. This document was exhibited through C.W.1 as Ex.C1. Thus, trade practice between the parties also _____________ https://www.mhc.tn.gov.in/judis Page No.22 of 27 C.S.(Comm. Div) No.591 of 2018 supports the conclusions drawn herein and, in my view, validate the co- acceptance without making an endorsement on the bill.
24. Therefore, both the first and second Defendants are jointly and severally liable in respect of the claim of Rs.1,02,49,709/-. The Plaintiff has also claimed penal interest of Rs.3,84,154/- on the basis of the communication dated 17.04.2018 from the third Defendant to the Plaintiff, whereby the third Defendant informed the Plaintiff that this amount was being debited from its account as penal interest. On examining the communication dated 17.04.2018(Ex.P12), it is clear that the third Defendant informed the Plaintiff that the sum of Rs.1,02,49,709/- was debited under the OCC account of the Plaintiff so as to close Bill No.0012. By the same communication, the Plaintiff was also informed about the debiting of a sum of Rs.3,84,154/- as penal interest since the bill was over due from 28.08.2017 till 06.11.2017. Therefore, the Plaintiff has established that the debiting of this amount is directly attributable to the default by the first and second Defendants in making payment for goods purchased, including by not honouring the bill of exchange on the due date. As regards the interest on the suit claim from the date of claim, the Plaintiff has claimed _____________ https://www.mhc.tn.gov.in/judis Page No.23 of 27 C.S.(Comm. Div) No.591 of 2018 interest at the rate of 18% per annum. By taking into account the interest rate prevailing from November 2017 till date, interest is awarded at the rate of 9% per annum on the suit claim. In accordance with the loser pays principle, the first and second Defendants are liable to pay costs to the Plaintiff. By taking into account the sum of Rs.1,18,629/-, which was paid as court fee, reasonable lawyer's fee and other expenses, the first and second Defendants are directed to pay a sum of Rs.3,00,000/- as costs to the Plaintiff.
25. In the result, the suit is decreed by directing the first and second Defendants to pay the Plaintiff, jointly and severally, a sum of Rs.1,06,33,863/- along with interest at the rate of 9% per annum from 07.11.2017 till the date of realization. The first and second Defendants shall also pay the plaintiff a sum of Rs.3,00,000/- as costs, which includes the court fee of Rs.1,18,629/-, lawyer's fees and other expenses.
09.06.2022 Index : Yes Internet : Yes rrg _____________ https://www.mhc.tn.gov.in/judis Page No.24 of 27 C.S.(Comm. Div) No.591 of 2018 Plaintiff's side witness:
1.Mrs.Shanmugadevi : P.W.1 Defendants' witness: : Nil Court Witness:
1.Mr.K.N.Choudhary : C.W.1
2.Mr.K.V.S.Prakash Rao : C.W.2 Documents exhibited by the Plaintiff:
Sl.No Exhibi Date Particulars of Documents ts
1. Ex.P1 26.09.2019 Authorization letter
2. Ex.P2 22.05.2017 Proforma Invoice
3. Ex.P3 23.05.2017 Confirmation order
4. Ex.P4 24.05.2017 Bill of Exchange
5. Ex.P5 24.05.2017 Collection Schedule
6. Ex.P6 29.05.2017 SFMS Message
7. Ex.P7 06.06.2017 Email between D2 and D3
8. Ex.P8 24.10.2017 Message sent by third Defendant
9. Ex.P9 22.08.2017 Letter sent by the first Defendant
10. Ex.P10 23.03.2019 Order in Appln No.1780 of 2018 in C.S.No.69 of 2018
11. Ex.P11 11.01.2018 Plaint in C.S.No.69 of 2018
12. Ex.P12 14.04.2018 Letter sent by third Defendant _____________ https://www.mhc.tn.gov.in/judis Page No.25 of 27 C.S.(Comm. Div) No.591 of 2018 Documents exhibited by the Defendants: Nil Court exhibits:
Sl. Exhibit Date Particulars of Documents
No. s
1. Ex.C1 31.07.2018 Certificate issued by third Defendant showing list of
transactions with first Defendant in which payments have been made by the second Defendant.
SKRJ _____________ https://www.mhc.tn.gov.in/judis Page No.26 of 27 C.S.(Comm. Div) No.591 of 2018 SENTHILKUMAR RAMAMOORTHY, J.
rrg Pre-Delivery Judgment C.S.(Comm. Div)No.591 of 2018 _____________ https://www.mhc.tn.gov.in/judis Page No.27 of 27 C.S.(Comm. Div) No.591 of 2018 09.06.2022 _____________ https://www.mhc.tn.gov.in/judis Page No.28 of 27