ASHOK LEYLAND FINANCE LIMITED Vs. MESCO PHARMACEUTICALS LIMITED

JUDGEMENT

(1.) This is an application filed by the defendant seeking leave to defend in a money suit filed by the plaintiff under summary procedure of Order XXXVII, CPC.

(2.) The case of the plaintiff is that it is a non-banking financial company and on being approached by the defendant had agreed to give financial assistance by way of bill discounting facility to the defendant to the extent of Rs.l .00 crore on the terms as mutually agreed in writing dated 18.11.1995 inter alia agreeing at a discount rate of 26% per annum with additional finance charges of 6% per annum in case of delay and in pursuance of this agreement the plaintiff had discounted certain Hundies dated 24.11.1995 for Rs. 99,62,975.00, dated 2nd March, 1996 for Rs. 75,000.00 and dated 29th June, 1996 for Rs. 75,00,000.00. The defendant, however, was irregular ir clearing their liability in time and gave three cheques No. 792166,792167 and 792168 forRs.25,00,000.00 eachdatedl5.1.1997,15.2.1997andl5.3.1997in repayment of the cheque of Rs. 75.00 lakhs and had also agreed to pay discounting charges @ 30% per annum. These cheques have been dishonoured. Plaintiff has claimed Rs 1,04,48,630.00 which includes discounting charges 29% per annum and additional finance charges @ 6% per annum.

(3.) On summons for judgment being served, the defendant has filed this application seeking leave to defend. It is not disputed that discounting facility was availed, cheques given remain unpaid, the liability to pay otherwise is also not disputed. However, it is alleged that: (1) the suit does not fall under the provisions of Order 37, Rule 1(2), CPC; (2) suit is pre-mature as the plaintiff had agreed to roll over the payments due to liquidity crunch of defendant; (3) post-dated cheques were given on the understanding that before presentation of the cheques for payment, plaintiff would seek written confirmation from the defendant but the plaintiff has backed out of this agreement; (4) there is no cause of action and that the suit .is not maintainable. It is denied that the defendant is liable to pay the discounting charges @ 29% per annum or additional finance charges @ 6% per annum or pendente lite or future interest @ 24% per annum as claimed.