1 Bsb IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION SECOND APPEAL NO. 707 OF 1992 Shetkari Sahakari Sakhar Karkhana Ltd., Sangli. ... Appellant v/s M/s. A. Prakash & Co., Sangli. ... Respondent Shr S.R.Page i/by Mr.S.G.Page for the appellant. CORAM: SMT.NISHITA MHATRE, J. DATED: 7TH OCTOBER, 2009 ORAL JUDGMENT: 1. The appeal has been preferred against the decisions of the lower Courts by which the suit filed by the plaintiff i.e. the respondent herein has been decreed. Essentially, the appellant/defendant is aggrieved by the direction to pay interest at the rate of 18% per annum on the amount of Rs. 23,948.04. The second appeal has been admitted on the following substantial questions of law:- (i) Whether the learned Additional District Judge, 2 Sangli, is right in awarding interest at the rate of 18% per annum on the principal amount of unpaid purchased price ? (ii) Whether the respondent is entitled to the interest at the rate of 18% per annum on the price of the goods sold ? 2. The undisputed facts in the present case are that, the appellant agreed to purchase certain goods from the respondent. These goods were supplied by the respondent to the appellant and bills for the same were furnished to the appellant. It appears that some bills remained unpaid. The plaintiff/respondent therefore called upon the defendant/ appellant to pay the uncleared amounts. Accordingly, the defendant sent a cheque of Rs.52,856.50 on 16.4.1985 to the plaintiff as well as another cheque of Rs.24,961/- on 7.5.1985 in respect of the supply of goods by the plaintiff. The plaintiff called upon the defendant to pay the remaining amounts and since the defendants did not comply with the demand, the plaintiff filed Special Civil Suit No.124 of 1985 claiming Rs. 29,984.31 ps. from the defendant. 3. The Trial Court, on the basis of the evidence recorded 3 before it, held that the plaintiff had proved that the defendant had purchased goods worth Rs.77,817.50 ps. and that cheques for the same were issued in favour of the plaintiff by the defendant. The Trial Court further concluded that the plaintiff is entitled to the interest at the rate of 18% per annum on the unpaid amount since the defendant had not paid the principal amount within the stipulated period. The Trial Court, therefore, decreed the suit partly and directed the defendant appellant herein to pay Rs.23,948.04 within three months from the date of the judgment and further to pay interest at the rate of 18% per annum, in the event that the principal amount was not paid within the stipulated period. 4. Aggrieved by the decision of the Trial Court, both the plaintiff and the defendant filed appeals before the District Court, Sangli. The Additional District Judge, Sangli, heard both the appeals together and passed a common judgment on 16.4.1992. The appeal preferred by the plaintiff i.e. Regular Civil Appeal No.12 of 1987 was allowed and the decree passed by the Trial Court was modified to the extent that the defendant was directed to pay an amount of Rs.5,836.27 ps. in addition to the decretal amount awarded by the Trial Court. The appeal preferred by the defendant i.e. Regular 4 Civil Appeal No. 26 of 1987 was dismissed. 5. The second appeal has been preferred by the appellant/ defendant challenging the judgment and order passed by the lower appellate Court. 6. The only issue which arises for determination is, whether the plaintiff was entitled to charge interest at the rate of 18% per annum ? 7. The Trial Court has considered Exhs.42 and 43 which are credit memos issued to the defendant indicating supply of goods. Exh.42 which is dated 7.5.1983 indicates that goods worth Rs.24,961/- were supplied and received by the defendant on the same day. Exh.43 is a credit memo for an amount of Rs.53,865/-. Both these credit memos have been signed for and on behalf of the plaintiff. The said documents indicate that the defendant has paid the aforesaid amounts by cheque. The print on the credit memos indicates that, in the event there was a delay in payment of the amount, interest would be charged at the rate of 18% per annum. The amounts were to be settled within eight days. Admittedly, the defendant had not paid the amounts within the stipulated period and in fact the amounts were paid in 5 April and May, 1985 i. e. two years later. 8. The Trial Court having considered these documents, has held that the printed term of payment of interest was known to the defendant and, therefore, the defendant was liable to pay interest at the rate of 18% per annum. 9. It is submitted by Mr.Page, appearing for the appellant that, merely because the credit memo indicates the rate of interest, it would not mean that the defendant had agreed to pay interest at that rate. He submits that, unless both the parties are ad idem regarding the rate of interest payable, the question of seeking interest at the rate of 18% per annum does not arise. 10. The appellate Court has not considered this aspect of the matter as to whether the interest could be charged at the rate of 18% per annum and has however instead held that the plaintiff was entitled to higher amount as the principal. 11. Both the Courts below have held, on assessing the evidence, that the suit was filed for the recovery of the moneys for goods sold and delivered to the defendant. There is no evidence on record indicating that the defendant had 6 disputed this rate of interest when the credit memos were issued and accepted by the defendant. There is no material on record to indicate that the defendant had at any point of time denied the rate of interest and, therefore, both the Courts below have awarded interest at the rate of 18% per annum. 12. The terms of interest were stated in the credits memos which was issued to the defendant when the goods were delivered to it. Had there been any dispute regarding the rate of interest payable, the defendant ought to have raised it immediately on receipt of the credit memos. Not having done so, the defendant cannot now contend that it is not bound by the terms on the credit memos. Thus, the plaintiff was entitled to charge the interest at the agreed rate of interest of 18% per annum. 13. In my view, both the Courts below have not committed any error while directing that the interest payable is at the rate of 18% per annum. 14. Second appeal dismissed. ..... 7 8