: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.271 OF 2007 IN SUMMARY SUIT NO.2596 OF 2006 Volvo India Pvt.Ltd. ....Plaintiff V/s. M/s.Ganesh Container Movers . Syndicate & Another ....Defendants Mr.R.G. Bhat with Mr.Sanjay Sinha for the Plaintiff. Mr.K.P. Sreejit i/b Sreejit & Lal for the Defendant. CORAM : S.J. VAZIFDAR, J. DATED : 20TH AUGUST, 2008. P.C. : 1. The suit is filed to recover a sum of Rs.50,02,993/-. Defendant No.2 is the proprietor of Defendant No.1. 2. The Defendants have admittedly availed of maintenance and repair services from the Plaintiff. The Plaintiff has also supplied spares parts for the Defendants’ vehicles for a number of years. Pursuant to the orders placed by the Defendants, the Plaintiff provided services and supplied the goods and in respect thereof raised the invoices on the Defendants : 2 : from time to time. Exhibit "B" is a statement containing the details of the bills, amounts received, amounts credited etc. in respect of the above transactions. The bills mentioned in Exhibit "B" are for the period 1.9.1999 to 31.11.2003. 3. It is important to note that during this period as between the Plaintiff, the Defendants and a company called M/s.Ornate Multi Model Carriers Ltd. (hereinafter referred to as "Ornate"), a reconciliation statement was executed on 31.12.2002. The dues to Ornate are stated to be Rs.8,75,366/- and the dues of the Defendant are stated Rs.50,00,000/- as on December, 2002. The statement proceeds to record as under:- "NOTES : 1. The above is the final settlement and all the earlier claims have been duly accounted. 2. The above balances are arrived after adjusting the inter company transactions of Rs.51,85,670/=. This is on the request by both the companies Volvo considers the total business of the group as single account. 3. Rs.13.13 Lac MOU insurance claim includes Customer portion also. If the claim is short settled by the Insurance Company, same would be made good to Volvo. We agree that if there is any further MOU related claims for which proper documentation is done by Ganesh containers, it would be honoured. : 3 : SETTLEMENT OF ABOVE AGREED OUTSTANDINGS. ORNATE GROUP : The above outstanding to be recovered from NFC invoicing of Jan 2003. GANESH GROUP : Immediate settlement of Rs.44 lacs. VOLVO INDIA : To release all vehicles on realisation of above payment. Balance 6 lacs Volvo to come back to Ganesh Group Co." 4. To my mind, the reconciliation statement is clearly an account stated and settled. I will presume that note 2 in so far as it considers the total business of the group as a single account cannot be enforced. However, in the suit the claim is restricted to accounts stated and settled qua the Defendant alone. It is also pertinent to note that the Plaintiff had agreed to release all vehicles "on realization of above payment". In other words the Plaintiff was not bound to return the vehicles till payment was made. Mr.Bhat however made an unconditional statement that the Plaintiff is not interested in retaining the Defendant’s vehicles as security or for any other purpose, that the Plaintiff relinquishes any right to the vehicles and that it would hand over the vehicles to the Defendant any time upon demand. The : 4 : statement is accepted. 5. By a letter dated 12.2.2003 the Plaintiff stated that it had agreed to give a discount of Rs.10,00,000/- provided the payment of Rs.50,00,000/- as per the reconciliation of accounts was made immediately after sending the same. The Plaintiff stated that as the said sum had not been paid, the discount of Rs.10,00,000/- would not be available and that an amount of Rs.60,00,000/- was now due. It is not necessary to consider this claim for an additional amount of Rs.10,00,000/- as the Plaintiff has restricted its claim to Rs.50,00,000/-. 6. By its letter dated 26.5.2003, the Defendant stated as follows :- "As you may recall, in our last meeting, we had agreed to pay you Rs.50 lakhs which is the actual amount due to you in ten installments, i.e. Rs.5 lakhs per month and you had promised to release the two vehicles immediately as we are suffering huge financial loss on non working of these two vehicles. Also you have one vehicle MHO4F 3395 (damaged), for which we have put up a claim with New India Assurance and the salvage amount of this vehicle may also be adjusted against the Rs.50 lakhs due to you." 7. The Plaintiff’s advocate by a reply dated : 5 : 29.4.2004 denied the allegations, referred to the above facts and also stated that by a letter dated 26.5.2003, the Defendant had agreed to make said payment in ten instalments of Rs.5,00,000/- per month. This fact was admitted in paragraph 8 of the Defendant’s said letter dated 27.3.2004. By the said letter, the Defendant was called upon to pay the outstanding amounts along with interest at 18% p.a. 8. Thereafter the Defendant addressed another letter dated 11.6.2004 stating that it had agreed at a discussion held on 10.6.2004 that the Plaintiff would be entitled to sell two vehicles belonging to the Defendant in its possession ; that the sale proceeds should be adjusted against the Plaintiff’s claim in full and final settlement of its dues ; that the Defendant agreed to provide necessary documents for disposal of the vehicles and that the Defendant would waive his claim against the Plaintiff and the Plaintiff would in turn have no further claim against the Defendant. 9. The Plaintiff by its reply dated 25.10.2004 agreed to accept the terms of the Defendant’s said letter dated 11.6.2004 only as a partial settlement as the market value of the vehicles was far below the amount due to it by the Defendant. The Defendant was : 6 : requested to hand over the title documents and the N.O.C. from the financier. Lastly, the Plaintiff stated that the proposal was without prejudice to the correspondence and reserved its right to initiate legal proceedings regarding the outstanding amounts. 10. By a further letter dated 21.9.2005, the Plaintiff inter-alia recorded that the sale of the said vehicles could be made after the submission of the relevant documents. The Defendant having failed to pay the said amounts, the Plaintiff by its advocate’s letter dated 19.12.2005 demanded the payment thereof. 11. The Defendant by its advocate’s letter dated 27.3.2004 alleged that the Plaintiff had failed to release the trailer sent by the Defendant to the Plaintiff for the outstandings of Ornate. The Defendant also alleged that the said two vehicles were wrongly detained by the Plaintiff. This statement would not be justified in view of prior correspondence in which it was the Defendant who asked the Plaintiff to sell the same. It was alleged that the Defendant was not : 7 : present during the reconciliation of the accounts. This was alleged for the first time. In paragraph 8 of the letter, the Defendant agreed that at a meeting held in May, 2003, it was agreed that the said sum of Rs.50,00,000/- would be paid to the Plaintiff by instalment of Rs.5,00,000/- per month. This however, it was contended that the Defendant was compelled to agree to do as he had suffered huge financial loss on account of "non-working of the two vehicles". The Defendant contended that though the Plaintiff was entitled to the repair charges it was not entitled to detain the vehicles. 12. This letter was replied to by the Plaintiff’s advocate letter dated 29.4.2004. 13. It was contended on behalf of the Defendant that only the services rendered by the Plaintiff was in respect of two repair bills the aggregate value whereof was not more than about Rs.40,000/-. 14. It is difficult to accept this contention. Nor is it possible to accept the contention that the remaining component was only for parking charges in respect of the said vehicles. The bills were not : 8 : analysed in this regard on behalf of the Defendant. Further in any event the accounts stated and settled on 30.12.2002 raises a strong presumption against the Defendant. If indeed only an amount of Rs.40,000/- was due, there is no explanation why the Defendant admitted an amount of Rs.50,00,000/- to be due and payable. 15. It was also submitted that the claim is barred by the law of limitation. The submission is not well founded. The reconciliation statement was executed on 31.12.2002. By a letter dated 26.5.2003 the Defendant had agreed to pay a sum of Rs.50,00,000/- in instalments of Rs.5,00,000/- per month. There is no question therefore, of the suit being barred by limitation. The plaint was lodged on 11.7.2006. At the highest the instalments falling due in the month of June, 2006 would be barred by limitation. However, even this would not be so, in view of the admission in the letter dated 27.3.2004 of the fact that in May, 2003, the Defendant had agreed to pay the said amounts. The accounts was stated and settled by the said settlement dated 30.12.2002. The plaint was lodged on 11.7.2006. However, by a letter dated 27.3.2006, the Defendant himself stated that in May, 2003 he had agreed to pay the amount in instalments of Rs.5,00,000/- per month. Thus on the : 9 : basis of this admission alone, the position would be that in May, 2003 the Defendant had agreed to pay the amounts in instalments of Rs.5,00,000/- each and this liability was acknowledged by the said letter dated 27.3.2006 i.e. within a period of three years from May, 2003. 16. There is however nothing to indicate that there was any agreement to pay interest. The demand for interest was made for the first time by the Plaintiff’s advocates letter dated 29.4.2005. In the circumstances, leave to defend is granted to the Defendant conditional upon the Defendant depositing in this Court a sum of Rs.50,00,000/- within 16 weeks from today. In the event the Defendant deposits the aforesaid amount, the suit to stand transferred to the list of Commercial Causes. The Defendant to file their written statement within 30 days. Discovery and Inspection within four weeks thereafter. On the said deposit being made, the Prothonotary and Senior Master to invest the same in any Nationalised Bank initially for a period of two years and thereafter for like periods of two years : 10 : each. In the event the Defendant fails to deposit the aforesaid amount, liberty to the Plaintiffs to apply for further orders. It is clarified however that in the event of the suit being decreed on account of the Defendant not being able to deposit the amount the rate of interest after the date of filing of the suit shall be fixed by the learned Judge passing the decree, if any. Summons for Judgment stands disposed of accordingly.