Dismissed

Escorts Ammd and Another v. Jagdeep Agros Pvt. Ltd/.

Punjab & Haryana HC7 Mar 2011RSA/982/2009

Case brief

AI extract

What is this about?

In a second appeal regarding a suit for recovery of money arising from a dealership relationship, the High Court dismissed the appeal. The court held that the appellants were given sufficient opportunity to file a written statement, the suit was not time-barred, and the interest rate was not excessive, as the liability was undisputed.

What did the court decide?

The second appeal was dismissed; no merit found; no question of law arises.

Escorts Ammd and Another Vs… — Contract and Commercial Disputes | Punjab & Haryana HC (2011)

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RSA No.982 of 2009 (O & M)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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RSA No.982 of 2009 (O & M) Date of Decision: 07.03.2011

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Escorts- AMMD and another

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……Appellants

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Versus

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Jagdeep Agros Pvt. Ltd.

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…...Respondent

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Coram: HON’BLE MR. JUSTICE L. N. MITTAL.

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Present: Mr. Sumeet Mahajan, Sr. Advocate with Mr. Vaibhav Sehgal, Advocate for the appellants.

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Mr. Vijay Sharma, Advocate for respondent.

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L.N. MITTAL, J (ORAL)

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Defendants-(Escorts Ltd.- AMMD), are in second appeal. Respondent-plaintiff filed suit against the defendants/appellants for recovery of Rs.16,49,867.69P alleging that the plaintiff was appointed as dealer by the defendants. The defendants supplied tractors and spare parts between August, 1999 and February, 2000 to the plaintiff. Lastly plaintiff sent advance payment of Rs.6,50,000/- vide bank drafts dated 26.02.2000 for Rs.3,00,000/- and dated 29.02.200 for Rs. 3,50,000/-. However, the defendants without any communication did not supply the tractors against the said payment. There was no reason for terminating the dealership of the plaintiff. There was no response on behalf of the defendants to the letters sent by the plaintiff. Ultimately, the plaintiff filed suit for recovery of the suit amount which included the aforesaid

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RSA No.982 of 2009 (O & M)

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advance payment, security amount, amount of spare parts etc.

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The plaintiff also claimed interest at the rate of 18% per annum on the advance amount and 12% per annum on the remaining amounts.

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Defendants were initially proceeded ex parte. However, on their application, ex parte proceedings were set aside by the trial Court. However, thereafter the defendants failed to file written statement in spite of four adjournments. Consequently, the defence of the defendants was struck off.

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Learned Additional Civil Judge (Senior Division), Sangrur vide judgment and decree dated 25.10.2004 decreed the plaintiff’s suit for recovery of Rs.14,49,867.69P with proportionate costs and future interest at the rate of 12% per annum from the date of decree till recovery. In first appeal preferred by the defendants, learned District Judge, Sangrur vide judgment and decree dated 18.03.2008 modified the judgment and decree of the trial Court and decreed the plaintiff’s suit for recovery of Rs.9,75,011.90P with proportionate costs and future interest at the rate of 12% per annum as awarded by the Trial Court. Feeling aggrieved, defendants have preferred the instant second appeal.

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I have heard learned counsel for the parties and perused the case file.

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Learned counsel for the appellants contended that sufficient opportunity was not granted to the defendants-appellants for filing written statement. The contention cannot be accepted. Defendants were proceeded ex parte on 09.09.2003. They put in

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RSA No.982 of 2009 (O & M)

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appearance on 04.05.2004 and moved application for setting aside ex parte proceedings, after ex parte evidence of the plaintiff had already been recorded. In order to expedite the suit, counsel for the plaintiff stated that he had no objection if ex parte proceedings against the defendants were set aside on payment of costs. Consequently, ex parte proceedings were set aside vide order dated 03.06.2004, but thereafter defendants failed to file the written statement till 20.08.2004. Consequently, it cannot be said that sufficient opportunity was not given to the defendants to file the written statement.

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Learned senior counsel for the appellants also contended that the suit filed by the plaintiff was time barred qua other amounts except the amount sent as advance payments. This contention also cannot be accepted. Suit qua security amount cannot be said to be time barred because right to recover the same accrued when the defendants did not respond to the plaintiff’s letters for supply of the tractors and spare parts. The defendants had not sent any letter regarding cancellation of dealership of the plaintiff. Similarly other amounts could not be recovered by the plaintiff till the plaintiff could assume cancellation of the dealership by the conduct of the defendants. Consequently, the suit cannot be said to be time barred. In the absence of pleading also, this contention involving mixed question of law and facts, cannot be accepted.

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Learned counsel for the appellants also contended that interest rate of 12% per annum is excessive. This contention is also untenable. Firstly, interest rate of 12% per annum in commercial transaction cannot be said to be excessive. Secondly, the suit

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RSA No.982 of 2009 (O & M)

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amount was due from the defendants to the plaintiff since February, 2000 or prior to it. However, lower appellate Court has awarded only future interest to the plaintiff. Thus interest only with effect from 25.10.2004, the date of decree of the trial Court, has been awarded. In other words, interest for 4 years and 8 months since February 2000 till October, 2004 has not been awarded to the plaintiff. Consequently, the defendants do not deserve any further concession in the matter of interest.

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As regards merits, defendants have not filed written statement and the plaintiff’s case goes unrebutted and also counsel for the defendants did not dispute the liability of the defendants in the lower appellate Court for the principal amount for which lower appellate Court has decreed the suit of the plaintiff. In this regard, paragraph 11 of the judgment of the lower appellate Court is reproduced hereunder:-

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“ At the time of arguments, Shri D. R. Markan, learned counsel for the appellants could not challenge the impugned decree regarding the relief of plaintiff for the payment of Rs.6,50,000/-, the advance payment to have been made by the plaintiff vide two cheques dated 29.02.2000 and 26.02.2000 as reflected in Ex.P21/A, the copy of the ledger maintained by defendant company. Similarly, he could not dispute the liability of the defendants regarding the previous credit of Rs.36012/lying in favour of the plaintiff in the accounts of the defendant company as is reflected in Ex.P28/B, the copy of the ledger maintained by the plaintiff showing closing balance of Rs.6,86,012/- i.e. the amount of Rs.6,50,000/of advance payment of two cheques plus Rs.36012/- the previous credit. Similarly, the learned counsel for the appellants could not dispute the liability of the appellants

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RSA No.982 of 2009 (O & M)

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regarding the refund of Rs.one lac lying with it as security deposit made by the plaintiff as reflected in Ex.P29, the copy of the ledger for the period 01.04.1999 to 31.03.2000 maintained by the plaintiff, to be read with Ex.P26, copy of DDR No.504042 dated 23.08.1999 for Rs.One lac. Similarly, the learned counsel for the appellants could not dispute the liability of the appellants regarding the payment of Rs.1,88,999.90P lying in credit in the account of the plaintiff regarding the spare parts account as is reflected in Ex.P32, the copy of the ledger maintained by the plaintiff for the period 01.04.2000 to 31.03.2001.”

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For the reasons aforesaid, I find no merit in the instant second appeal. No question of law, much less substantial question of law, arises for determination in the instant second appeal. Accordingly, the appeal is dismissed.

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(L. N. MITTAL) JUDGE

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07.03.2011 A.kaundal

Escorts Ammd and Another v. Jagdeep Agros Pvt. Ltd/.

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Escorts Ammd and Another v. Jagdeep Agros Pvt. Ltd/.

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