TMI Blog2007 (8) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... tact Office at Resham Mill Road, Birla Nagar, Gwalior (M.P). The defendant No. 1 M/s Rohini Strips Ltd., a limited company duly incorporated under the Companies Act having its corporate and Head Office at New Delhi through defendants No. 3 to 5 who were also the Directors of defendant No. 1 were dealing in Iron and Steel Materials and they needed supply of Iron and Steel materials from the plaintiff. It is stated that in consideration of the plaintiff supplying the materials to the defendant No. 1, defendants No. 2 to 5 gave personal guarantees as a security for the due payment of the amount due and outstanding along with interest in respect of the goods sold and delivered to the defendant No. 1 by the plaintiff. 3. The plaintiff is alleged to had supplied Iron and Steel materials of various quality on credit which were duly received and accepted by the defendant No. 1. The plaintiff is alleged to had supplied goods worth ₹ 2,45,78,845/- to defendant No. 1 during the period from August, 1997 till December, 1998. An adjustment of ₹ 4,48,692/- was given on account of various credit/debit notes issued by the plaintiff to the defendant No. 1 from time to time. After givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f subsequently without consent, knowledge or approval of the defendants. It is alleged that the cheques in question were presented by the plaintiff to its banker without instructions or prior approval of the defendants. In substance, the plea of the defendants is that they are not bound by the cheques which are basis of the plaintiff's suit. (ii) The defendants have also contended that they are entitled to recover from the plaintiff an amount more than ₹ 3.80 crores on account of Central Excise, MODVAT and conversion charges. The plea of the defendants in this regard is that they had to pay Central Excise and MODVAT charges in respect of purchases made by defendant No. 1 from the plaintiff from September, 1994 to January, 1995 because of the plaintiff's failure to furnish various particulars and documents which are as under: (a) The details of buyer and manufacture which is essential under Rule 57GG of Central Excise Rules 1944. (b) Duplicate for Transporter as valid documents for the purpose of taking Modvat Credit under Rule 52A of Central Excise Rule 1944. 6. According to the defendants, they had to pay ₹ 1,01,00,347/- as Central Excise on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove on the face of it has by now become barred by limitation and cannot be entertained. Hence, the defence raised by the defendants in regard to the amount allegedly due and outstanding from the plaintiff on account of Modvat, Central Excise or conversion charges does not raise any triable issue requiring leave to defend to be granted to defend the present suit. 11. Reverting to the main defence of the defendants to the claim of the plaintiff in the present suit, one needs to refer to the correspondence that exchanged between the parties when there was no dispute between them. It is generally believed that a man can lie but not the circumstances. The defence intended to be set up by the defendants that they had issued blank cheques to the plaintiff on the face of the record appears to be sham, illusionary, moonshine and an afterthought. The two cheques one for ₹ 2,41,31,153/- and the second for ₹ 1,21,68, 443/- both dated 16.3.2000 were given by defendant No. 1 to the plaintiff along with a covering letter annexed therewith. It shall be pertinent to refer to the letter of the defendant No. 1 dated 16.3.2000 addressed to the plaintiff by which cheques in question wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted November, 4, 2003 revised proposal dated Feb., 28, 2004 dated 3rd September, 2004 and October, 6, 2004 and subsequent meetings and discussions held with SAIL officials for the settlement of dues, our revised proposal is as under: We propose to pay the principle outstanding till March, 2000. 1. We propose to pay a down payment of ₹ 35.00 lacs. 2. We propose to pay ₹ 1000 PMT on purchase of H.R. Coils from SAIL subject to a minimum of ₹ 15.00 lacs per month. 3. The amount paid may kindly be adjusted towards the principle outstanding. 4. Regarding interest, it is submitted that the company has faced very hard time and has accumulated heavy losses. The company has paid huge amount of interest to SAIL at very high rate of interest. We therefore request to kindly calculate the interest at 7.5% on simple method basis and we are ready to pay the interest as proposed from the date of delivery orders against which unpaid dues are pending. We also request you to kindly extend your co operation as under: We may be given 2000 ton HR Coils per month regularly to run the plant uninterrupted. If SAIL finds it difficult to give 2000 tons per month, then we ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial. Your required sizes will be accepted based on the availability of material in our PLANTS and hence you will be required to submit your requirement in line with the availability of material as indicated to you from time to time. 7. You have to confirm acknowledge the outstanding dues towards Principal amount and interest @ 7.5% (Seven and a half percent) till 31.01.2005 thereon as proposed by you on all Delivery Orders against which payment is outstanding. 8. The above proposal is without any prejudice to our rights and conditions on all pending court cases, both civil/criminal, as filed against you. However, SAIL can withdraw the same on clearance of the dues towards principal and interest. You may kindly submit a copy of this letter with your signature as a token of acceptance of the above terms and conditions along with a Demand Draft of ₹ 35 Lakhs (Thirty Five Lakhs only) in favour of STEEL AUTHORITY OF INDIA LIMITED payable at Gwalior, within seven days of issuance of this letter. This is without any prejudice to our rights and conditions in this matter. Thanking you Yours truly, For Steel Authority of India Ltd. sd/- P.K. Mathur CUST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dant was that he had made cash payment of the goods purchased by him from the plaintiff and the cheques which were bounced were given only as collateral security for the price of the goods supplied. In the present case, there is no such defence set up by the defendants that they had made either cash payment or payment by any other mode towards price of goods purchased by them from the plaintiff from time to time. Furthermore, in the case relied upon by the defendants' counsel, there is no document at the time of grant of leave to defend to ascertain as to whether the cheques in question were given towards price of goods or as collateral security. Under these circumstances, it was held that the plea raised by the defendant raises a triable issue and entitle him to grant of leave unconditionally. 17. In the present case, there is overwhelming evidence on record to show that the cheques in question were given by the defendant No. 1 to the plaintiff towards price of the goods and since these cheques were returned unpaid, this entitled the plaintiff to seek recovery against the defendants under Order XXXVII CPC. The defence set up by the defendants that the cheques in question we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndants is held to be devoid of any merit and the same is hereby dismissed. 21. It is contemplated under Order XXXVII Rule 3(5) CPC that if an application for leave to defend the suit has been made by the defendants and the same is refused, the plaintiff shall be entitled to have the judgment signed forthwith. In the present case, since the application of the defendants under Order XXXVII Rule 3(5) CPC has been dismissed as the defendants have failed to raise any triable issue or disclose any defence in their application, in my considered opinion, the plaintiff has become entitled to have the decree for the suit amount forthwith. Accordingly, suit of the plaintiff is hereby decreed with costs. The plaintiff is held entitled to a decree in the sum of ₹ 5,51,74,220/- against the defendants. However, since the plaintiff has failed to establish its claim of interest at 25% p.a which he has claimed at the market rate for commercial transaction, I am inclined to award interest at the prevalent rate only at 12% p.a on the decretal amount from the date of institution of the present suit till realization. Decree sheet be prepared. Needless to say that the defendants shall be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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