1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. SUMMONS FOR JUDGMENT NO.794 OF 2003 IN SUMMARY SUIT NO.146 OF 2003 Ranjana Newsprint Imports P. Ltd. ...Plaintiff. Versus Kumudam Publications Ltd. & Ors. ...Defendants. ....... Ms.Aarathy Thampy i/b.Viraj Maniar Asso. for the Plaintiff. None for the Defendants. ...... CORAM : DR. D.Y. CHANDRACHUD, J. September 17, 2009. P.C.: The suit has been filed for the recovery of moneys allegedly due and payable on account of goods sold, supplied and delivered by the Plaintiff to the First Defendant under invoices. The Plaintiff supplied newsprint paper rolls to the Defendants under two invoices dated 11th August 2001 in the amount of Rs.2,61,357/- and dated 25th August 2001 in the amount of Rs.3,02,120/-. Apart from the aforesaid, the Plaintiff has claimed that it had also entered into a transaction with the Defendants for Cash Against Documents under which the documents came directly to the Bankers of the Defendants 2 from the principal supplier and the Defendants were supposed to retire documents. The goods were alleged to be with the Port Trust. On the request of the Defendants, the Plaintiff is alleged to have lent an amount of Rs. 3.50 lakhs on 22nd March 2001 of which the Defendants returned an amount of Rs. 1.50 lakhs leaving a balance of Rs.2 lakhs. The amount covered by the two invoices and the claim under the CAD transaction is Rs.7,63,472/-. Interest has been claimed thereon at the rate of 24% p.a. 2. Two affidavits in reply have been filed - the first by the Third Defendant, while the second is by the Second Defendant on behalf of the First Defendant. The Third Defendant denies that he was the Managing Director of the First Defendant. The next defence in both the replies is that there was no agreement on interest at the rate of 24% p.a. Furthermore, it has been submitted that the goods which were supplied were of an inferior quality and the Defendants were led to a situation where they had to utilize the goods in order to fulfill the commitment of publishing their magazine. 3 3. At the hearing of the Summons for Judgment, the Advocate appearing on behalf of the Defendants is absent. However, both the affidavits in reply have been perused by the Court. -4. Though the Defendants have sought to urge that the goods which were sought to be supplied were not of the requisite quality, it is evident that the goods were utilized by the Defendants. If according to the Defendants the goods were not according to specifications, the goods ought to have been returned or rejected. This was evidently not done. The goods were utilized, The defence that there was no agreement for the payment of interest at the rate of 24% p.a., however, raises a triable issue. -5. In so far as the Third Defendant is concerned, having regard to the defence that he was not a Managing Director, it would be appropriate to grant him unconditional leave to defend the suit. -6. In so far as the First and Second Defendants are concerned, while the interests of justice would require the grant of leave to 4 defend, this should be on condition of deposit. 7. In the circumstances, the Summons for Judgment shall stand disposed of in terms of the following directions: -(i) The First and Second Defendants are granted leave to defend the suit, subject to the deposit of an amount of Rs.2,50,000/- within a period of eight weeks from today. Upon deposit, the amount shall be invested in a fixed deposit of a Nationalized Bank to be renewed periodically during the pendency of the suit; -(ii) The Third Defendant is granted unconditional leave to defend the suit. 8. The suit shall be transferred to the list of commercial causes. The Written Statement shall be filed by the First and Second Defendants, subject to compliance with the order of deposit on or before 14th December 2009. The Third Defendant would be at liberty to file a Written Statement on or before 14th December 2009. The 5 Summons for Judgment is accordingly disposed of. ...