BPL LIMITED Vs. HINDUSTAN TRADERS CO

JUDGEMENT

(1.) THE plaintiff has instituted the suit for recovery of Rs. 25,28,847/ - from the defendants jointly and severally together with pendente lite and future interest. The defendants were proceeded ex -parte vide order dated 25th April, 2007. The plaintiff has led its ex -parte evidence in the form of affidavit (Ex. PW1/A) by way of examination in chief of its sole witness Shri R. Sathyanarayanan. The witness has also tendered documents Exhibit P1/1, Exhibit P1/1A, Exhibit P1/2 - P1/61 and Exhibit P1/62 - Exhibit P1/64.

(2.) IT is inter -alia in the case of the plaintiff and in evidence that the plaintiff is engaged in the business of manufacturing and marketing of electronic goods; that the defendant No. 1 of which the defendant No. 2 is the sole proprietor was the dealer of the plaintiff; that the plaintiff used to supply electronic goods to the defendant No. 1 and raised invoices on the defendant No. 1; that the defendant No. 1 was to pay the amount of the invoice on or before the due date; that it was however agreed by the defendants that if they fail to make the payments on time they will pay interest at 24% per annum on the value of the invoice; that the plaintiff effected the supply of goods on the defendants and the defendants used to make on account payments from time to time against the various invoices raised by the plaintiff; that the said payments were adjusted against the various invoices by the plaintiff after giving due credit as and when the payments were received; that the plaintiff filed CS(OS) No. 2742/1999 in this Court for recovery of Rs. 39,67,465.19 then due from the defendants; that during the pendency of the aforesaid suit the matter was settled and the plaintiff agreed, against the then outstanding amount of Rs. 29,17,253/ - as on 25th January, 2001, to pay a sum of Rs. 19,17,253/ - only in full and final settlement; that the plaintiff in the circumstances withdrew CS(OS)No. 2742/1999 on 3rd September, 2001; that the plaintiff thereafter continued transacting business with the defendants and the defendants issued to the plaintiff various cheques for a total a sum of Rs. 13,51,856/ - towards outstanding for supplies made till the date of institution of this suit; that out of the total cheques for Rs. 13,51,856/ -, 28 cheques for a total of sum of Rs. 7,77,795/ - were returned dishonoured to the plaintiff for the reason of insufficiency of funds in the bank account of the defendants; that the plaintiff, in the circumstances did not even present the remaining 17 cheques for a total sum of Rs. 5,74,061/ -; that besides the cheques for a total sum of Rs. 13,51,856/ -, supplies against other invoices for a total sum of Rs. 5,04,671.33 were also made by the plaintiff to the defendants and for which no cheques were issued. The plaintiff, thus, claimed that a total principal sum of Rs. 18,56,527.33 (Rs. 13,51,856/ - for which cheques were issued + Rs. 5,04,671.33 for the balance amount for which cheques were not issued) was due from the defendants to the plaintiff. The plaintiff besides the said amount claimed interest of Rs. 6,72,320.46 at 12% per annum on the outstandings, till the date of institution of the suit, making the suit for recovery of Rs. 25,28,847/ -. The plaintiff also claimed pendente lite and future interest.

(3.) BEFORE discussing the aspect of limitation, I may also notice that the plaintiff besides the defendants No. 1&2 (supra) has also impleaded defendant No. 3 who is stated to be the authorized signatory of the defendant No. 1. All the cheques aforesaid issued by the defendant No. 1 to the plaintiff are signed not by the defendant No. 2 as the proprietor of the defendant No. 1 but by the defendant No. 3 as the authorized signatory of the defendant No. 1. Section 28 of the Negotiable Instruments Act, 1881 provides that an agent who signs his name to a promissory note, bill of exchange or a cheque without indicating thereon that he signs as agent or that he does not intend thereby to incur personal responsibility, is liable personally on the instrument, except to those who induced him to sign upon the belief that the principal only would be held liable. Section 7 of the said Act defines the maker of a cheque as the drawer. Section 30 of the Negotiable Instruments Act makes a drawer of a cheque liable to compensate the holder. Thus, in the present case, as far as the claim on the basis of the cheques signed by the defendant No. 3 is concerned, the defendant No. 3 having signed as a cheque as authorized signatory and having not disclosed that he does not intend to incur personal liability, would be liable for the amount, if any, found due on the said cheques.