RAMA VISION LIMITED Vs. RALETRONICS LIMITED

JUDGEMENT

(1.) The plaintiffs have filed the present suit for recovery of Rs.10,31,300.00 against the defendants. The plaintiffs were engaged in the business of manufacturing and sale of black and white television picture tubes whereas the defendants were engaged in the business of manufacturing of television sets etc. The black and white television picture tubes were sold by the plaintiffs to the defendants on three dates against which a number of post-dated cheques were issued which were dishonored. Thereafter as against the outstanding amount of Rs.16,70,600.00 , the defendants issued a single cheque dated 20/01/1994 drawn on ANZ Gridlays Bank, M.G.Road,Bombay for that amount. On being presented for payment through the bankers of the plaintiffs, the said cheque was again dishonored. An advice dated 9/02/1994 was received from the bank to that effect The plaintiffs served the defendants with a legal notice dated 21/02/1994 under Section 138 of Negotiable Instruments Act requesting them to make payment within 15 days from the date of receipt of the said notice. The defendants, however, failed to make payment and the plaintiffs filed a criminal complaint under Section 138 read with Section 142 of the Negotiable Instruments Act,1881. The Chairman and the Managing Director of the defendants company were also made parties to that complaint. The name of the Managing Director Mr.Manik Mulchandani was later on deleted from the complaint as he had ceased to be the Managing Director of the defendants company. During the pendency of the criminal complaint, a settlement took place between the parties and the Chairman of the defendants company Mr.Tirath R-Mulchandani paid a total sum of Rs. 16,70,600.00 by way of three bank drafts. A receipt was issued for the said payment by the plaintiff and the complaint was dismissed as withdrawn on 20/04/1996. The plaintiffs' case is that while withdrawing me complaint and issuing the receipt for me principal amount of Rs. 16,70,600.00 , the plaintiffs' claim towards interest was left open to be decided by the Civil Court. The plaintiffs claimed an entitlement of interest at the rate of 24% per annum. The last bank draft paid towards the principle amount while settling the criminal complaint was dated 10/04/1996. The plaintiffs have, therefore, claimed interest at the rate of 24% per annum on the principle amount w.e.f. 20/01/1994, the date of the cheque for the principle amount which was dishonored, upto 10/04/1996, which comes to Rs.8,86,204.93 paise. In addition to that, plaintiffs have also claimed interest w.e.f. 10/04/1996 upto 15/12/1996 on the interest of Rs.8.86,204.93 paise which is calculated as Rs. 1,45,094.79 paise. The plaintiffs have also claimed pendente lite interest from the date of the suit till realization at the said rate of interest on the sum of Rs. 10,31,299.72 paise.

(2.) After the settlement had arrived at between the parties in the criminal complaint, the defendants company went into liquidation. The Official Liquidator made statement before this Court that the present suit could be proceeded against the defendants only with the leave of the Company Court as winding up proceedings against the defendants company were pending in the High Court of Karnataka at Bangalore. Vide order dated 1 6/07/1997, the Company Court at Kamataka granted permission to the plaintiff to prosecute the present suit with the condition that the plaintiffs would not execute the decree if obtained without further orders from that Court.Accordingly, the Official Liquidator attached to the High Court of Kamataka at Bangalore filed written statement in the present case denying any liability towards payment of interest on the principle amount of Rs.16,70,600.00 which had already been paid in the complaint case. According to the Official Liquidator, the defendants had paid the principle amount in full and final settlement of the claims of the plaintiffs. On the pleadings of the parties, following issues were framed on 10/08/1999 : 1) Whether the plaintiff is entitled to compound interest at the rate of 24% per annum of delayed payment of the principal amount of Rs.16,70,600.00 w.e.f. 20/01/1994 to 15/12/1996 and thereafter till realization of the said amount? OPP 2) Relief. On 10/08/1999 no one had appeared for the defendants and as such the plaintiffs were permitted to file affidavit by way of evidence. The plaintiffs accordingly filed evidence by way of affidavit of Shri R.K.Sehgal, Company Secretary.

(3.) ISSUE N0.1: Learned counsel for the plaintiffs has taken me through the plaint, the affidavit by way of evidence and the documents proved and exhibited in view of the affidavit. The plaintiffs have proved the power of attorney and resolution of the company authorizing their Company Secretary Shri R.K.Sehgal to sign, verify and file the plaint. In fact defendants have not challenged the filing of the plaint through a duly authorized person. The only controversy which remains to be decided is, regarding the entitlement of interest on the delayed payments. The copy of the receipt placed on record by the defendants as Annexure 'D' to the written statement has been proved and Exhibited as P-7\ Perusal of this receipt shows that the plaintiffs had accepted a sum of Rs.16,70,600.00 in full and final settlement of their claim except their claim in respect of non-supply of sales tax, C-Fonns and interest on the said amount. This claim was, however, disputed and denied by me defendants company. As such, the question of claim regarding interest remained unsettled. The plaintiffs by way of affidavit have proved the carbon copies of original three invoices as Exhibits 'P-8' to 'P-10'. Terms and conditions on the reverse of these invoices show that interest at the rate of 24% per annum was payable on each of those claims, if payment of the bill was not received on the due date. This shows that the rate of interest according to the contract was 24% per annum on the principal amount.According to plaintiffs they are entitled to interest at the said rate w.e.f. 20/01/1994 i.e. the date of the cheque for Rs.16,70,600.00 till 10/04/1996 when final payment was made through bank draft in the criminal case. This amount is calculated at Rs.8,86,204.93 paise. The plaintiffs have also claimed interest at the said rate on Rs.8,86,204.93 paise, the interest calculated upto 10/04/1996. To my mind, the plaintiffs are not entitled to interest on interest from 10/04/1996 upto 15/12/1996 as claimed in the suit No document has been shown/to justify the claim of this interest and no notice under the Interest Act has been given to the defendants. The principal sum adjudged in this suit is Rs.8,86,204.93 paise. However, the plaintiffs claim, having arisen out of a commercial transaction, they are entitled to pendentelite and future interest on the principal sum adjudged in me suit. They are accordingly entitled to interest at the rate of 12% per annum on Rs.8,86,204.93 paise from the date of the suit till realization. The issue is decided accordingly.