MONTARI INDUSTRIES LTD Vs. TIRUMALA VENKATESWARA AGENCIES BHIMAVARAM

JUDGEMENT

(1.) This is the plaintiff's appeal against the judgment and decree in OS No.134 of 1988 dated 20-1-1993 passed by the Subordinate Judge, Bhimavaram. The plaintiff M/s. Montari Industries Limited, New Delhi, filed the said suit for recovery of Rs.5,06,565-76 ps. with interest at 18% p.a. from 1-10-1988 till realisation and for costs.

(2.) It is not necessary to refer to the averments in the plaint and in the written statement in extenso for the purpose of disposing of this appeal. Suffice to say that the plaintiff is a company incorporated at New Delhi and is a manufacturer of pesticides and insecticides. The 1 st defendant is a partnership firm with defendants 2 to 5 as its partners. The 1 st defendant is a dealer in fertilisers and pesticides and purchases pesticides and insecticides from the plaintiff for the purpose of retail shop. The 1st defendant purchased the goods from the plaintiff and failed to pay the amount and became due to the tune of Rs.6,67,342.80 by 31 st August, 1987. The plaintiff stopped further supplies and in a meeting held on 20-6-1987 at Secunderabad between the Managing Partner of the defendants' firm and the plaintiff, an agreement was reached under which the defendants' firm has to return the unsold stock to the tune of Rs.3,67,413.61 ps. and pay an amount of Rs.6,67,342.80 ps. after giving credit to the miscellaneous payments. Pursuant to the said agreement, the 1st defendant issued post dated cheques. The 6th defendant agreed to be the mediator and defendants 2 to 5 agreed to deposit their title deeds in respect of their personal agricultural lands and house sites as well as other properties to the tune of Rs.8,00,000/- with the 6th defendant and to create a 1st charge on the said properties in favour of the plaintiff. It was also agreed that in case of default for payment of any instalment, the title holders of the property shall sell the property and clear the amount due to the plaintiff. The defendants failed to honour the agreement. They deposited the title deeds of boiled rice mill units in the name and style of Sri Tirumala Srinivasa Paddy Boiling Plant, Peda Kapavaram, Akividu taluk, belonging to the 2nd defendant directly with the plaintiff. The plaintiff issued notices on 11-2-1988 and 16-3-1988 drawing the attention of the 1st defendant to the amount due and the 1st defendant promised to hypothecate the landed property of defendants 2 to 5 by 18-4-1988. However, the 1st respondent had not honored the agreement. The plaintiff, therefore, requested the Manager of the Canara Bank, Bhimavaram, to invoke the bank guarantee to the tune of Rs. 1,00,000/- issued by the 1st defendant in favour of the plaintiff. Thus, an amount of Rs.4,12,415.20 ps. towards the principal amount and Rs.94,150.50 towards interest as on 30-9-1988 became due from the defendants 1 to 5 to the plaintiff.

(3.) Pending disposal of the suit, the 5th defendant died and his legal representatives were not brought on record. Defendants 1 and 2 filed a written statement which was adopted by defendants 3 and 4. The defendants denied their liability under the agreement.