IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment delivered on : September 20, 2012

+ CS(OS) No. 2493/2009

RANBIR SINGH BHARDWAJ ..... Plaintiff

Through: Mr. R.K.Gupta, proxy counsel.

versus

R.K.KAPADIA ..... Defendant

Through: None.

CORAM:
HON'BLE MR. JUSTICE V.K.JAIN

JUDGMENT

V.K.JAIN, J. (ORAL)

1. This is a suit for recovery of Rs.20,06,591/-. It is alleged in the plaint that

the plaintiff is a manufacturer and seller of lubricating oil, carrying business under

the name and style of M/s. Parvati Oils & Chemicals. The defendant placed a

purchase order dated 30th September, 2008 on him for purchase by order of goods

worth Rs.16,58,340/-. The plaintiff accordingly supplied the goods vide two

invoices, both dated 20th October, 2008. The defendant, in due discharge of his

legal liabilities, paid the price of the aforesaid goods by issuing a cheque for a sum

of Rs.16,58,340/- dated 14th October, 2008 to the plaintiff. The cheque when

presented to the bank was returned for want of insufficient funds. The plaintiff

CS(OS)2493.2009 Page 1 of 5
issued a demand notice dated 15th December, 2008 calling upon the defendant to

pay the amount of the dishonoured cheque. Since the defendant has failed to pay

the price of the goods, the plaintiff has claimed the principal sum of Rs.

16,58,340/- along with interest on that amount at the rate of 18% per annum

amounting to Rs.03,48,251/-.

2. The defendant was proceeded ex-parte on 08th October, 2010. In his

affidavit by way of ex-parte evidence, the plaintiff has stated, on oath, the case set

out in the plaint and has proved various documents. He has further stated that the

purchase order Ex.PW-1/1 was placed by the defendant on him and he sent

proforma invoice Ex.PW-1/2. The goods were thereafter supplied vide invoices

Ex.PW-1/3 and Ex.PW-1/4. The material was sent to the defendant through M/s.

Rajesh Road Corporation(India) vide consignment note No. 478 dated 20th

October, 2008. He has further stated that the cheque Ex.PW-1/6 was issued by the

defendant but was dishonoured for want of insufficient funds.

3. Ex.PW-1/1 is the copy of the purchase order dated 30.09.2008 placed by the

defendant upon the plaintiff whereas Ex.PW-1/2 is the performa invoice which the

plaintiff sent to the defendant on receipt of the purchase order. Ex.PW-1/3 and

Ex.PW-1/4 are the two invoices whereby the goods were sold to the defendant.

The consignment note Ex.PW-1/5 shows that the goods were sent by M/s. Parvati

Oils & Chemicals to M/s. Sharda Auto Stores. Ex.PW-1/6 is the cheque for a sum

CS(OS)2493.2009 Page 2 of 5
of Rs.16,58,340/- issued by the defendant as proprietor of M/s. Sharda Auto Stores

in favour of the plaintiff on 14th October, 2010. The bank memo Ex.PW-1/7 shows

that the cheque was dishonoured for want of sufficient funds.

4. I see no reason to disbelieve the unrebutted deposition of the plaintiff which

finds corroboration from the documentary evidence produced by him. The value of

the goods supplied by the plaintiff to the defendant is confirmed from the invoices

Ex.PW1/3 and PW1/4. It is further confirmed from the cheque issued by the

defendant to the plaintiff. I, therefore, hold that the plaintiff is entitled to recover

principal sum of Rs. 16,58,340/- from the defendant.

5. A perusal of the invoices Ex.PW1/3 and Ex.PW1/4 shows that interest @

18% per annum was payable in case payment of the goods was not made within 15

days. This term on the invoice constitutes an agreement between the parties for

payment of interest @ 18% per annum. Assuming that there is no agreement

between the parties for payment of interest, since this is a suit for price of goods by

seller and delivery, interest can be awarded to the plaintiff under Section 61 of the

Sale of Goods Act, which, to the extent it is relevant, provides that in the absence

of a contract to the contrary, the Court may award interest at such rates as it thinks

fit on the amount of the price of the goods, to the seller, in a suit by him for the

amount constituting price of the goods and the interest under this can be awarded

CS(OS)2493.2009 Page 3 of 5
from the date of tender of the goods or from the date on which the price of the

goods was payable.

Even if the provisions of Section 61 of the Sale of Goods Act are not

applied, interest can be awarded to the plaintiff under Section 80 of the Negotiable

Instruments Act, which to the extent is relevant provides that when no rate of

interest is specified in the instrument, interest on the amount due thereon shall,

notwithstanding any agreement relating to interest between any parties to the

instrument, be calculated at the rate of 18% per annum, from the date at which the

same ought to have been paid by the party charged, until tender or realization of the

amount due thereon, or until such date after the institution of a suit to recover such

amount as the Court directs.

I find no justification for restricting the scope of Section 80 of Negotiable

Instruments Act to only those cases, where the instrument provides for payment of

interest, but the rate of interest is not specified and thereby allows unjust

enrichment to a person who has defaulted in honouring his contractual obligation

with respect to repayment of Principal sum. In my view, the provisions of Section

80 of Negotiable Instruments Act would equally apply to those cases where no

term regarding payment of interest is contained in the instrument. Since the

aforesaid provision, as amended, carries interest at the rate of 18% per annum, the

plaintiff is entitled to interest at the rate of 18% per annum under Section 80 of

CS(OS)2493.2009 Page 4 of 5
Negotiable Instruments Act and the interest would be payable from the date on

which the principal amount ought to have been paid by the defendant to the

plaintiff. The view being taken by me find support from the decision of a Division

Bench of Allahabad High Court in Nath Sah v. Lal Durga Sah, AIR 1936

Allahabad, 160, decision of the Orissa High Court in Ghasi Patra v. CS(OS)No.

1450/2006 Brahma Thati, AIR 1962 Orissa 35, decision of Patna High Court

Bishun Chand v. Audh Bihari Lal, AIR 1917 Pat 533 and decision of Karnataka

High Court in P. Mohan v. Basavaraju, AIR 2003 Karnataka 213.

6. The amount of interest at the aforesaid rate, according to the plaintiff comes

to Rs.3,48,251/-. The plaintiff has, therefore, proved his claim with respect to

interest as well.

7. For the reasons stated hereinabove, a decree of Rs.20,06,591/-with costs and

pendente lite and future interest at the rate of 12% is hereby passed in favour of the

plaintiff and against the defendant.

Decree sheet be drawn accordingly.

V.K.JAIN, J
SEPTEMBER 20, 2012
‘sn’

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