2014 (8) TMI 1115 - HC - Indian Laws

Court modifies order on deposit, interest rates; emphasizes foreign law in commercial contracts.

Aksh Optifibre Limited Versus Evonik Degussa Gmbh

The court upheld the order granting the appellant leave to defend the suit upon depositing a specified amount. The appellant, who had received goods but ... Decree being passed for non-deposit, interest - Held that:- The appeal ought to be disposed of by the following order :- i). The impugned order is confirmed with a modification only to the extent that in the event of a decree being passed for non-deposit, interest shall be computed at 4% p.a. and not at 12% p.a., as prayed in the suit. In that event for the balance interest of 8% p.a., the appellant shall be entitled to unconditional leave to defend. ii). The time to deposit the amount is extended upto and including 31.10.2014. Issues:1. Granting leave to defend the suit subject to depositing a specific amount.2. Dispute over payment for goods supplied.3. Defences raised regarding interest rates, promissory notes, and governing law.4. Applicability of foreign law in the case.Analysis:1. The judgment involves an appeal against an order granting the appellant leave to defend a suit subject to depositing a specified amount equivalent to Euros 11,37,866.30 within a stipulated time frame. The appellant had received goods from the respondent but had only partially paid the amount claimed in the suit.2. The respondent supplied goods to the appellant as per the terms of the agreement. The appellant acknowledged receiving the goods but failed to pay the full amount claimed in the suit. The court acknowledged that the appellant had little merit in its defense on the grounds of non-payment.3. The appellant raised defenses related to interest rates, promissory notes, and the governing law. The court modified the order to specify the consequences of non-depositing the amount and adjusted the interest rate to 4% per annum. The court also addressed concerns regarding promissory notes issued by the appellant, clarifying that they were collateral security and did not extinguish the original cause of action.4. The issue of foreign law arose as the invoices stated that the legal relationship between the parties would be governed by the substantive laws of the Federal Republic of Germany. The court emphasized that foreign law is a question of fact and noted the presumption that the general law of a foreign country is the same as Indian law unless proven otherwise.In conclusion, the court upheld the original order with modifications regarding interest rates and extended the time for depositing the amount. The judgment highlighted the importance of adhering to contractual obligations and the applicability of foreign law in commercial transactions.