Tata Chemicals Ltd. vs A.N. Chemicals and Another

Anoop V. Mohta, J.—The matter was on board on 29 July 2011. None appeared for the Defendants. As the summary suit is of 2004, the Plaintiff''s counsel Ms. Shreevardhini Parchure submitted the case and argued accordingly. The matter was closed for judgment.

2 It was listed for pronouncement on 11 August 2011 in chamber. The learned Counsel Mr. V.P. Shastri for Defendants 1 and 2 along with Defendant No. 2 Mr. Nasrudin K. Jamagia, appeared and requested for time to settle the matter and not to pronounce the Judgment. It was accordingly adjourned to 18 August 2011. As the parties were exploring the possibility of settlement, it was again adjourned. The parties could not settle the matter. The matter is listed today under the caption "for pronouncement of judgment".

3 The learned Counsel appearing for the Defendants submitted that the Plaintiff has filed a rejoinder in which a specific case now made out with regard to the disposal of tonners, based on the events, after the filing of the basic affidavit. The second submission was with regard to the delay in taking out this summons for judgment.

4 Therefore, after rehearing and reconsidering the rival submissions made by the parties read with the affidavit and material already on record, I am inclined to pass the following judgment/order.

5 The Plaintiff, who is dealing in the business of manufacture and sale of inorganic chemicals, salt, fertilizer and other products, has filed a Summary Suit on 16 February 2004 to recover the duly acknowledged balance amount of Rs. 37,62,560.22 towards the goods supplied and received by the Defendants.

6 The Plaintiff, in pursuance to the order, on 2 February 1999 delivered/supplied the goods; namely liquid chlorine, caustic soda, to the Defendants.

7 As the Defendants failed to make the payment, by letter dated 7 January 2000 the Plaintiff called upon the Defendants to pay a sum of Rs. 47,62,560.22 ps which was due and outstanding on the date. As discussed and promised the Defendants even failed to make the part payment of Rs. 10 lacs and the monthly installments of Rs. 5 lacs. Therefore, a demand notice dated 16 October 2000 was issued. The receipt and the contents of the letter were never disputed by the Defendants.

8 On 25 May 2001, Defendant No. 2 by a hand written note acknowledging the discussion forwarded four cheques dated 25 May 2001 of Rs. 2.50 lacs each. He thereby requested to adjust the balance amount of Rs. 37,62,560.22 against future purchases.

9 The Plaintiff duly deposited the cheque on 26 July 2001. Except one all other cheques were dishonored. The Plaintiff pointed out the said default to the Defendants. Defendant No. 2 by a letter dated 26 July 2001 requested the Plaintiff to deposit the balance cheque on 26 July 2001 and 31 July 2001. One cheque was honored out of these two.

10 In February 2002, the Defendants issued five cheques again in the sum of Rs. 1 lac each in lieu of the earlier dishonored cheques. By May 2002, all these five cheques of Rs. 1 lac each were honored. Therefore on 30 September 2002 balance amount was Rs. 37,62,560.22 remained due and payable by the Defendants. The Plaintiff, therefore, issued demand notice on 16 October 2002 for the balance amount. The Defendants in reply dated 23 November 2002 admitted the liability and promise to make the payment of Rs. 50,000/to Rs. 1,00,000/every month and also proposed to make 10% extra payment. The Defendants along with the letter forwarded a cheques of Rs. 50,000/. The proposal was not accepted by the Plaintiff and thereby asked in writing on 13 January 2003 to make the balance payment within seven days. The cheque of Rs. 50,000/was also dishonored. However, another cheque was honored on 28 February 2003. The balance still remained of Rs. 37,12,560.22 and, therefore, the present Suit on 3 October 2003, based upon the acknowledged due/outstanding.

11 The Defendants, after receipt of the summons which was issued on 1 March 2004, though filed vakalatnama of their Advocate on 16 March 2004, but never intimated the same to the Plaintiff which also delayed filing of the summons for judgment. A criminal proceeding was pending before the learned Magistrate pertaining to Rs. 50,000/as the cheque was bounced and all the original documents were required during cross examination in the said proceedings. Ultimately, the Defendants were held guilty of offence punishable u/s 138 of Negotiable Instrument Act by order dated 18 March 2006. The Defendants paid the said cheque amount after the decision.

12 Because of the dispute, the related correspondences were exchanged by the parties even with regard to the retention and the return of the empty tonners of Rs. 51,60,000/. The relevant correspondences are also of dated 1 October 2007 and 15 February 2008. The issue was never resolved. The tonners remained with the Plaintiff. The Plaintiff, ultimately filed the summons for judgment on 30 July 2009. The earlier Advocate Mr. S.P. Siyall expired and ultimately on 18 February 2010 the summons for judgment was served on Defendant No. 2. The Defendants replied the same by affidavit dated 15 April 2010. Defendant No. 2 for himself and for Defendant No. 1 being proprietor resisted the same.

13 The Plaintiff, after filing of the summons for judgment, as the Defendants, in spite of repeated communication and request to remove 86 tonners from its plant, and as the tonners were leading to safety issue at the plant and factory, therefore, decided to sell it. The Plaintiff, as the chlorine leakage causing hazardous situation, had No. option but to invite tenders to sell the tonners as scrap. It was accordingly sold some time in July 2010. An amount of Rs. 7,15,545/was realized out of the sale proceed. The Defendants not accepted to adjust the amount in the defense. There is No. justification whatsoever given in the defense that why the said tonners could not be removed by the Defendants in spite of repeated notices. The Defendants were fully aware of the sale and in fact went on exchanging the communications.

14 The Defendants in their reply admitted the liability and the acknowledgment of the amount. The defense was raised that Plaintiff illegally retained the tonners and still insisted for the due payment. However, there is clear admission that Defendant No. 2 agreed to pay Rs. 10 lacs to the Plaintiff as part payment and the balance monthly installment of Rs. 5 lacs. They have also agreed that the balance amount left is Rs. 37,62,560/in para 4. It is clear from the record itself that Defendants though agreed were not making due payments. The initial cheques itself were bounced. The only amount of Rs. 10 lacs was received by the Plaintiff. The Defendants were not in a position to make the payment of full amount though agreed. In this background the insistence of the Plaintiff for the amount and to retain the tonners cannot be said to be unjust or illegal. The Defendants conduct caused the delay in the matter, at every stage.

15 In rejoinder dated 14 February 2011, the Plaintiff has placed on the record the substantial material to justify the sale by following the due procedure of law in the month of July 2010 after due tender notice as the Defendants failed to collect/lift the tonners lying at the Plaintiff''s premises. The Plaintiff ultimately sold those tonners and intimated to adjust the proceeds against the outstanding dues payable by the Defendants. In this background the defense of the Defendants that they are entitled to recover the balance amount of Rs. 13,97439/by deducting the amount claimed by the Plaintiff of Rs. 37,62,560/out of the alleged value of the tonners i.e. Rs. 51,60,000/is not bonafide and it is sham and bogus. No. such counter claim is raised in any proceedings.

16 In view of the above, I am of the view that the Defendants failed to raise a good or substantial defense. On the contrary, the Plaintiff has been able to show and prove in view of the admission by the Defendants in the affidavit itself that amount to the extent of Rs. 37,62,560/is payable/unpaid. I am of the view that the total material on record and the subsequent events even though through the rejoinder, can be taken note of before passing order on summons for judgment. There is no bar to pass order in such changed circumstances as it is substantiated by the material on the record. There is No. question to deny the relief on the ground of delay or the material placed on the record only in rejoinder stage by the Plaintiff. The delay even if any, is liable to be condoned. It is condoned accordingly.

17 Rule 222 of the Bombay High Court (Original Side) Rules reads as under:

222 If it appears that the defense set up by the Defendant applied only to a part of the Plaintiff''s claim, or that any part of the claim is admitted, the Plaintiff shall have judgment forthwith for such part of his claim as the defense does not apply to or as is admitted, subject to such terms, if any, as to suspending execution, taxation of costs, or otherwise, as the Judge may think fit; and the Defendant may be allowed to defend as to the remaining claim of the Plaintiff.

In view of above, I am also of the view that summons for judgment for such admitted claim/amount can be passed. There is No. bar. On the contrary it is in support of the scheme of Order 37 of the CPC read with above rule.

18 However, considering the facts and circumstances, I am inclined to grant deduction of the amount of Rs. 7,15,545/as sale proceeds of the tonners as sold and as referred in rejoinder dated 14 February 2011 filed by the Plaintiff. There is No. specific agreement of agreed interest rate. The Plaintiff has not claimed any specific rate of interest on the amount due and payable. Therefore, I am inclined to grant 9; simple rate of interest from the date of Suit till payment on the balance amount subject to adjustment as referred above.

19 Resultantly, the judgment/order in the following terms:

(a) The Summons for judgment is allowed subject to deduction of the sum of Rs. 7,15,545/from the amount of Rs. 37,62,560/i.e. 30,47,015/, with 9% interest from the date of filing of the Suit till realization.

(b) The liberty is granted to settle the matter.

20 The Summons for judgment & the Suit are accordingly disposed of in the above terms. There shall be no order as to costs.