HINDUSTAN CIBA GEIGHY LIMITED Vs. SESHASAYEE INDUSTRIES LIMITED

JUDGEMENT

(1.) THIS Summons for Judgment has been taken out in the suit filed to recover from the defendants the sum of Rs. 2,85,238/- with further interest on the principal amount of Rs. 2,28,880/- at the rate of 18% per annum from date of filing of the suit till payment and costs of the suit.

(2.) BY three contracts in writing evidenced by the defendants Orders dated 9th July, 1988 and 6th January, 1989 as accepted by plaintiffs by their Orders of Acceptance dated 19th December, 1988, 20th February, 1989 and 23rd May, 1989 read with plaintiffs invoices bearing Nos. E-3900, dated 24th December, 1988. E-4757 dated 18th March, 1989 and E-0676 dated 26th May, 1989, the Plaintiffs sold and delivered Araldite and Hardner (hereafter referred as the said goods) to the defendants for an aggregate value of Rs. 2,37,816/- on the terms and conditions mentioned therein. The said goods were duly received by the defendants without raising any objection as to the quality, quantity and price thereof. As per terms of the said contracts, the defendant had agreed to pay to the plaintiffs interest at the rate of 23 per cent per annum if the defendants failed to pay the amounts of the invoices on their respective due dates. The said rate of 23% per annum was reduced to 18% per annum by agreement mutually arrived by and between the plaintiffs and defendants and recorded in writing on 15th June, 1987.

(3.) THE defendants have admitted their liability to pay the said principal amount as also interest at the rate of 18% per annum. However, according to the defendants, the defendants Company has become a Sick Industrial Company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred as the said Act) and as such, a report as required under section 15 thereof was filed by the defendants with the Board for Industrial and Financial Reconstruction (hereinafter referred to as BIFR) which has been registered as Case No. 115 of 1990. The total borrowing of the defendants from various financial institutions as on 31st March, 1990 has been about Rs. 14. 50 crores. The BIFR has appointed The Industrial Credit and Investment Corporation of India Limited as the operating Agency. Accordingly, the defendants have submitted that the suit as also the Summons for Judgment be stayed in view of the pendency of the proceedings before the BIFR. In support of his this submission, Mr. Kothari, the learned Counsel appearing for the defendants, has relied upon the case of the (State Industrial and Investment Corporation of Maharashtra Ltd. v. G. Agarwal and anr.) reported in A. I. R. 1991 Bom. That suit was filed as a Summary-Suit against the guarantors who were Directors of the Company actively involved in the rehabilitation of the Company. The Court while adjourning the hearing of the Summons for Judgment therein taken out, held as under: