Karnataka High Court Spectrum Consultants India Private ... vs Tech Vulcan Inc on 28 April, 2022 1 DATED THIS THE 28TH DAY OF APRIL, 2022 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM R.F.A NO.111 OF 2018(MON) BETWEEN: SPECTRUM CONSULTANTS INDIA PRIVATE LIMITED # 780, 1ST FLOOR, 1ST CROSS, 12TH MAIN, HAL II STAGE, BANGALORE560 008 REPRESENTED BY ITS DIRECTOR MR SANJAYA KUMAR GUPTA ...APPELLANT (BY SRI.DHANANJAY JOSHI, ADVOCATE) AND: 1. TECH VULCAN INC 6440, LUSK BLVD, SUITE D206 SAN DIEGO, CA 92121 USA, REPRESENTED BY ITS CEO MR PRADEEP MISHRA 2. TECH VULCAN INDIA PRIVATE LIMITED 302, SAI GANDHI SQUARE, OPP.SIGMA TECH PARK, WHITEFIELD, BANGALORE560 066 REPRESENTED BY ITS DIRECTOR MS REMI ...RESPONDENTS (BY SMT.SRIBHOOMI YASAWINI, ADVOCATE FOR 2 SMT.K.SUBHA ANANTHI, ADVOCATE FOR R1 & R2)) THIS RFA IS FILED UNDER SEC.96 R/W ORDER XLI OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 26.10.2017 PASSED IN OS NO.6486/2016 ON THE FILE OF THE XII ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE, PARTLY DECREEING THE SUIT FOR RECOVERY OF MONEY. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 20.04.2022, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING: JUDGMENT The captioned appeal is filed by the plaintiff questioning the judgment and decree dated 26.11.2017 passed in O.S.No.6486/2016 by the XII Additional City Civil and Sessions Judge at Bengaluru, only insofar as denial of interest at the rate of 21%, which is the statutory rate of interest under Micro, Small and Medium Enterprises Development Act, 2006(MSMED Act, 2006). 2. The parties are referred to as per their rank before the trial Court for the sake of convenience. 3. The facts leading to the case are as under: 3 The plaintiff filed a recovery suit in O.S.No.6486/2016 by specifically alleging that defendants are jointly and severally liable to pay a sum of US$ 11090/ equivalent to Rs.7,56,684/ with interest at the rate of 15%. The plaintiff claimed that it is engaged in the business of providing HR services(Human Resources) to its customers and is registered under MSMED Act, 2006. The plaintiff has further contended that pursuant to an enquiry received from defendant No.2, for sourcing of candidates holding H1B Visa for defendant No.1 company, the plaintiff submitted a proposal setting out its fees and terms of payment. The plaintiff claims that the said proposal was accepted by defendant No.2 and plaintiff forwarded details of some candidates to defendants. On 6.8.2015, the 2nd defendant confirmed that one Mr. Vikas Yadav, a candidate, referred by plaintiff was successfully placed in USA. The defendant further advised the plaintiff to raise its invoice in US Dollars, for an amount equivalent to 8.33% of the candidate's basic salary of US $10446. The 4 plaintiff's grievance is that though invoice was raised to that effect payable within 15 days of its receipt, defendant No.1 failed to make payment and inspite of repeated reminders, since defendant No.1 failed to pay the dues to the plaintiff, a legal notice was sent by plaintiff's company to the defendants on 4.6.2016. A second notice was also issued on 25.7.2016 setting out the fact that plaintiff's company is a registered entity under MSMED Act, 2006 and therefore, the defendant's are liable to pay a sum of US $9163 together with compound interest. On these set of pleadings, the plaintiff instituted the present suit seeking recovery of Rs.7,56,684/ including interest at the rate of 21%. 3(a) The defendants though served with summons and engaged a counsel did not choose to contest the proceedings. The Trial Court has decreed the suit directing the defendants to pay a sum of Rs.7,56,684/ and awarded simple interest at the rate of 15% per annum. 5 3(b) It is the interest part which is under challenge in the present appeal by the plaintiff. 4. The learned Senior Counsel Sri. Dhananjay Joshi reiterating the grounds urged in the appeal memo would contend that the plaintiff company is registered under MSMED Act, 2006 and therefore, is entitled for statutory interest as prescribed under MSMED Act, 2006. In the absence of serious contest by the defendants, the plaintiffcompany has lead in ocular evidence and has specifically stated that plaintiff company is a registered entity under MSMED Act, 2006. Therefore, he wo