Court rules in favor of plaintiff for machinery payment, adjusts interest rate, dismisses directors' liability claim.

The court ruled in favor of the plaintiff for the recovery of the principal amount for machinery supplied, along with interest. The defendants' claims of inferior quality and an interest-free installment agreement were not proven. Directors were not held personally liable for the company's debts, as no piercing of the corporate veil was established. The court adjusted the interest rate to 9% per annum for future payments, rejecting the initial 24% rate. The plaintiff was granted a decree for the principal amount with specified interest rates, while the suit against the directors was dismissed.

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Issues: Recovery of unpaid machinery price, quality of machinery, installment agreement, liability of directors, interest rate

Recovery of Unpaid Machinery Price:
The plaintiff filed a suit to recover the principal amount of Rs. 1,03,50,000 for machinery supplied to the defendant. The plaintiff also claimed interest at 24% per annum from the date of the invoices. The defendants contested the suit, alleging inferior quality of machinery and an agreement for installment payment without interest. However, the court found in favor of the plaintiff as the defendants failed to prove their claims, and the plaintiff proved the supply of machinery and the outstanding balance.

Quality of Machinery and Installment Agreement:
The defendants failed to prove their claims of the machinery being of inferior quality and an agreement for installment payment without interest. The court ruled in favor of the plaintiff on these issues based on the evidence presented, including the contemporaneous conduct of the parties.

Liability of Directors:
The defendants argued that the directors of the defendant company should not be personally liable for the debts of the company. The court noted that there was no case of piercing the corporate veil pleaded or proved. It was emphasized that natural persons acting on behalf of a juristic entity like a company do not automatically become personally liable for the entity's debts. Citing legal precedents, the court decided against holding the directors personally liable.

Interest Rate:
Regarding the interest rate claimed by the plaintiff, the court found the contractual rate of 24% per annum for the pre-suit period excessive. Considering the commercial nature of the transaction, the court awarded future interest at 9% per annum. The court also considered a payment plan agreement filed by the plaintiff, ruling that interest at 24% per annum would be applicable from April 1, 2012, till the date of the suit's institution, and 9% per annum thereafter.

In conclusion, a decree was passed in favor of the plaintiff against the defendant for the recovery of the principal amount with specified interest rates. The suit against the directors was dismissed, emphasizing the distinction between the company's liabilities and the personal liabilities of its directors.

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