B. MUNE GOWDA Vs. BEVERAGES CORPORATION LTD. AND DEPO MANAGER, KARNATAKA STATE BEVERAGES CORPORATION LTD.

JUDGEMENT

(1.) PETITIONER purchased stock of the value of Rs. 2,00,000/ - from the 1st respondent - Corporation through the 2nd respondent on 06.02.2007 by submitting a challan vide Annexure -R4. The 2nd respondent issued the stock to the petitioner on receipt of the said challan, subject to realization and credit of the challan amount of Rs. 2,00,000/ -, to the account of the 1st respondent. The amount having not been realized and credited to the account, 1st respondent on 20.03.2013 vide Annexure -D, demanded the payment of Rs. 2,00,000/ -, interest of Rs. 2,93,655/ - and penal interest of Rs. 50,000/ -. The petitioner having remitted Rs. 2,00,000/ - by demand draft on 20.03.2013 has filed this writ petition to quash Annexure -D to the extent of the demand made for payment of interest amount of Rs. 2,93,655/ - and penal interest of Rs. 50,000/ -. Respondents have filed statement of objections in justification of the demand made vide Annexure D.

(2.) SRI Venkatesh P. Dalawai, learned advocate for the petitioner contended that the respondents have no power or jurisdiction to levy interest and penal interest and that the impugned demand being arbitrary and illegal may be quashed.

(3.) IN view of the rival contentions and the record of the case, it is clear that the petitioner paid Rs. 2,00,000/ - on 20.03.2013 towards the purchase made on 06.02.2007. Relevant clauses in sales policy vide Annexure -R1, reads as follows: 3.03. The Corporation is entitled to recover differences due to short billing, excess dispatches, price differences, short collection of TCS or any other reason, immediately after such instances are noticed by it. However, such balance amounts, if any, un -paid within a week from demand shall carry an interest of 18 percent per annum. The Corporation is entitled to adjust such amounts immediately out of any payment received or out of any other credit lying in favour of the buyer. 4.05. Dishonour or back reference of the demand draft/pay order/DT will lead to following action by HO/Depot Manager, whoever notices the default earlier: (i) Supplies to the buyer will be stopped forthwith