Yadav Flour Mills P. Ltd. vs Globus Agronics Ltd.

Pradeep Nandrajog, J.—Appellant had filed a suit for recovery of Rs. 6,63,640/- (Rupees Six lac. Sixty three thousand six hundred and forty only) alleging that it had been supplying Bajra Atta to the respondent and one of its units, namely, Haryana Organics and pertaining to the supplies delayed payments were received due to which interest in sum of Rs. 4,43, 142/- (Rupees Four lacs. forty-three thousand one hundred and forty two only) and Rs. 1,64,698/- (Rs. One lac. Sixty four thousand six hundred and ninety-eight only) had accrued. Additionally it was pleaded that as per agreement between the parties if the empty gunny bags were not returned price thereof @ Rs. 12/- per bag was payable. Rs. 30,276/- (Rupees thirty thousand two hundred and seventy-six only) and Rs. 25,524/- (Rupees Twenty five Thousand five hundred twenty four only) as the price of unreturned gunny bags was prayed to be decreed.

The respondent took a stand in the written statement that on 10.2.1999 a settlement was arrived at evidenced by Ex. D-2 that pertaining to the supplies at Haryana Organics in full and final settlement Rs. 4,66,902.28 (Rupees Four lacs. sixty six thousand nine hundred two and paise 28 only) was payable and was paid. Pertaining to the supplies effected on the respondent it was pleaded that vide Ex.D-1 on 13.4.1999 in full and final settlement Rs. 2,00,000/- (Rupees Two lacs only) was payable for which the payment was made.

At the trial appellant sought to sustain the claim with respect to a cheque in sum of Rs. 4,00,000/- (Rupees Four lacs, only) payment whereof was stopped. The cheque was dated 1.2.1999.

The respondent sought to explain its action by stating that a post-dated cheque was issued but in view of the settlement no amount was payable and hence payment was stopped pertaining to the said post dated cheque.

Learned trial Judge has returned a finding that Exs.D-1 and D-2 do not bear the signatures of the appellant and hence the writing thereon that the payments are towards full and final settlement of the accounts does not bind the appellant. Thus, the said documents have not been held to be proved of a full and final settlement.

But, nothing that there was no contract between the parties to pay interest nor was any custom or market practice proved nor was any notice demanding interest served, finding returned is that no interest was payable on the delayed payments.

Suit pertaining to recompense for gunny bags not returned has been decreed in sum of Rs. 55,800/- (Rs. Fifty five thousand and eight hundred only).

The appellant i.e. the plaintiff wants more i.e. the interest on delayed payments;

Learned Counsel for the appellant urges that the logical corollary of the finding returned by the learned trial Judge that Exs.D-1 and D-2 do not evidence a full and final settlement requires the claim to be decreed, if not in full, at least in the sum of Rs. 4,00,000/- (Rs. Four lacs only) being the cheque admittedly issued on 1.2.1999 payment whereof was stopped.

We do not find any force in the said contention for the reason merely because the defendant i.e. the respondent could not prove that Ex.D-1 and D-2 recorded a full and final settlement; plaintiff i.e. the appellant had to stand on its own legs to prove entitlement to interest. We note that Ex.D-1 and Ex.D-2 are vouchers of the respondent when payment was made but do not bear the signature of any representative of the appellant and hence the finding returned by the learned trial Judge that the writing thereon does not bind the appellant.

There is no evidence on record that from time to time, the appellant raised debits notes pertaining to the interest which appellant was crediting in its account books against the respondent.

Learned Counsel for the appellant concedes that there is no written contract pertaining to payment of interest but urges that the orders record a term; being that payment would be made after five days. Counsel urges that some meaning has to be given to the said term and that the only meaning could be that if not made within a reasonable period of five days the same shall carry interest.

Liability to pay interest has two elements. First, the liability to pay the interest, and second, the rate at which interest has to be paid.

Assuming that the clause means that money has to be paid within a reasonable period, but if not so paid, at what rate interest has to be paid? We are left guessing.

We find that there is no evidence of market practice, custom or usage pertaining to payment of interest.

Under the Interest Act, 1978, interest is payable under three contingencies (a) contract; (b) market practice or custom and (c) upon proof of notice demanding interest.

The first two heads are missing. Pertaining to the third, the only notice demanding interest is Ex.P-31 dated 19.5.1999, a date admittedly much after the principal amounts were paid.

Pertaining to the plea of the appellant that the cheque in sum of Rs. 4,00,000/-(Rs. Four lacs. only) dated 1.2.1999 evidences a liability to pay at least Rs. 4,00,000/-(Rupees four lacs. only) suffice would it be to state that the respondent has successfully established that the cheque was issued post dated and that no further amount was payable when Exs.D-1 and D-2 were drawn by it.

Though Exs.D-1 and D-2 record that the payment tendered are towards full and final payment but since the appellant has not signed the same the said writing cannot bind the appellant. However, the fact of the matter remains that the cheque dated 1.2.1999 was sent for encashment somewhere in the month of July, 1999. The probabilities the fact that the same was issued as a post dated cheque to be used if required.

Be that as it may, we prefer to adopt the safer route and determine whether interest was at all payable on late payments.

As noted herein finding returned is none was payable.

We find no merit in the appeal.

Dismissed.

No costs.