Sm Feeds And Farms (INDIA) Private Limited vs. Max Chem Pharma

The parties shall henceforth be referred to as they were arrayed before the Trial Court. The petitioners herein were the defendants while the respondent herein was the plaintiff before the Trial Court.

The plaintiff filed a commercial suit in Com. O.S. No.16/2024 for recovery of Rs.48,31,800/- which included principal of Rs.28,58,308/- and interest of Rs.19,73,492/- till the date of the suit. The demand arose out of certain business transactions between the defendants and the plaintiff.

The suit was contested by the defendants who inter alia contended in the written statement as follows: NC: 2024:KHC:45637 "

The notice dated 18.08.2023 has been suitably replied on 22.09.2023. claim for running account is denied as false the offer for settlement is only to maintain good relationship but the plaintiff did not accept the offer. As such an offer made without prejudice does not entitle the plaintiff for suit claim, at any rate as of today the operations of defendant no.1 has come to a halt and no business is carried on the covid 19 lockdown and its aftermath has ruined the business of the defendant no.1 and as such there is no liquidity even if decree is passed. All the assets are offered as security to the financial institutions and hence the claim made by the plaintiff is untenable. The business of manufacture of animal feeds is not excigible for goods and services tax and therefore defendant no.1 cannot secure input credit of GST levied by the plaintiff as such the claim of the plaintiff is untenable."

An application (I.A. No.3) was filed by the plaintiff under Order XXXVII Rules 5 and 6(b) read with Section 151 of CPC for a direction to the defendants to deposit the admitted amount. In response to this application, the defendants filed objections contending inter alia as follows: NC: 2024:KHC:45637 “7. The Plaintiff filed this suit without considering the offer made by the defendants to settle the matter by repaying the principal amount of Rs.28,58,308/- in deferred payments of Rs.2,00,000/- per month over a period of fourteen months. And now they have filed the said application asking the defendants to deposit a sum of Rs.48,31,800/-. It is respectfully submitted that the Plaintiff and Defendant Companies have previously engaged in business running into crores. The defendant could not pay back the aforesaid claimed amount as the defendant company went into deep losses from the COVID Period and could not continue working and eventually had to shut down operations.”

Being aggrieved by the said order, the defendants are before this Court.

Learned counsel for the defendants contended that an application for leave to defend the suit was granted by the Trial Court without any condition. He further contends that the plaintiff who had earlier filed a similar application (I.A.No.3) withdrew it and therefore, it could not have filed a similar application. He, therefore, contends that the Trial Court could not have directed the defendants to deposit the amount on the premise that it was admitted by them. Besides this, he contends that the Trial Court did not grant enough opportunity to the defendants to object to the application (I.A. No.4) filed by the plaintiff. He also contends that the defendants had agreed to pay the principal amount in 14 installments of Rs.2,00,000/- per month commencing from January 2024 but the Trial Court had directed the defendant No.1 to deposit the entire amount in one shot. He also contends that the offer of NC: 2024:KHC:45637 the defendants to pay Rs.28,58,308/- in installments was notwithstanding the defences available to them in law such as limitation etc. He, therefore, contends that the Trial Court had committed an error in requiring the defendant No.1 to deposit a sum of Rs.29,08,308/-.

Per contra, the learned counsel for the respondent/plaintiff submits that the amount of Rs.28,58,308/- was the principal amount payable under various invoices generated from time to time and the defendants did not dispute them. He contends, that in fact the defendants had admitted in categorical terms and had offered to pay the said amount in staggered installments of Rs.2,00,000/- per month over a period of 14 months commencing from January 2024. He, therefore, contends that the said amount is admitted and that there is no error in the impugned order of the Trial Court directing the defendant No.1 to deposit the amount of Rs.29,08,308/-.

I have considered the submissions of the learned counsel for the defendants / petitioners and the learned counsel for the plaintiff / respondent. NC: 2024:KHC:45637

As rightly contended by the learned counsel for the plaintiff, the defendants had admitted their liability to pay a sum of Rs.28,58,308/- to the plaintiff. The defendants had offered to pay the said sum in 14 staggered installments of Rs.2,00,000/- per month commencing from January 2024. This offer was not accepted by the plaintiff and therefore, the Trial Court was justified in directing the defendant No.1 to deposit a sum of Rs.29,08,308/- to the plaintiff. There is no error committed by the Trial Court in passing the impugned order warranting interference by this Court.

Hence, the petition lacks merit and the same is dismissed. Having regard to the fact that the defendants/petitioners are required to deposit a huge sum of money, they are granted two months’ time to deposit the amount of Rs.29,08,308/- before the Trial Court. If the amount is not deposited within two months from today, the plaintiff / respondent is at liberty to file appropriate application before the Trial Court for any interim relief and proceed in accordance with law. NC: 2024:KHC:45637

Mr. Skanda Kumar, learned counsel is permitted to file memo of appearance for the respondents within 10 days from today. (R. NATARAJ) JUDGE