TaxTMI 
TaxTMI 
2026 (6) TMI 699
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....the parties having agreed to an interest rate of 15% per annum with quarterly rests, the learned Trial Court reduced the pendent lite interest to 9% per annum simple interest, with no future interest. 4. The Plaintiff, Zavenir Developers Private Limited filed a Suit CS DJ No.292/2021 under Order XXXVII read with Section 151 CPC, for recovery of Rs. 50 lakhs along with interest of Rs. 22,13,890/- @ 15% per annum quarterly compounded on the principal amount till 22.03.2021, and pendent lite and future interest @ 15% per annum. 5. The facts in brief, are that the Plaintiff duly incorporated Company since 2010, was engaged in the business / trading of cosmetics raw materials like heena powder, etc. The Defendant, Sandeeip Goel a Chartered Accountant by profession, was known to the Directors of the Plaintiff since early 2000 and had been acting as a Chartered Accountant/ Auditor of the Plaintiff. The relations between the Plaintiff and Defendant were not only professional, but more personal on account of their relationship, which continued even after Defendant ceased to be the Auditor/ Chartered Accountant of the Plaintiff. 6. In September, 2018 the Defendant approached the Pla....
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.... (24.09.2018 to 30.09.2018 @ 15% p.a.) 9041 5009041 31.12.2018 Interest (01.10.2018 to 31.12.2018 @ 15% p.a.) 189383 5198424 31.03.2019 Interest 01.04.2019 to 31.03.2019 @ 15% p.a.) 192270 5390694 30.06.2019 Interest (01.04.2019 to 30.06.2019 @ 15% p.a.) 201597 5592291 30.09.2019 Interest (01.07.2019 to 30.09.2019 @ 15% p.a.) 211434 5803725 31.12.2019 Interest (01.10.2019 to 31.12.2019 @ 15% p.a.) 219428 6023153 31.03.2020 Interest (01.10.2020 to 31.03.2020 @ 15% p.a.) 225240 6248402 30.06.2020 Interest (01.04.2020 to 30.06.2020 @ 15% p.a.) 233673 6482075 30.09.2020 Interest (01.07.2020 to 30.09.2020 @ 15% p.a.) 245076 6727151 31.12.2020 Interest (01.10.2020 to 31.12.2020 @ 15% p.a.) 254342 6981493 24.02.2021 Interest (01.01.2021 to 24.02.2021 @ 15% p.a.) 157800 7139293 22.03.2021 Interest (25.02.2021 to 22.03.2021 @ 15% p.a.) 74597 7213890 22.03.2021 Balance payable as on 22.03.2021 (INR) 7213890 ....
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....at he could arrange cash to the tune of Rs.40-45 lakhs. Mr. Pratik Bhartia persuaded the Defendant to arrange a sum of Rs. 50 lakhs, as there was some equipment, for which the payment to be made by the Plaintiff company. 16. The Defendant with sheer hard work and goodwill, arranged cash of Rs. 50 lakhs for the Plaintiff Company, which he sent to Pratik Bhartia on 21.09.2018, at his residential address in Panchsheel Enclave and he duly acknowledged the receipt of the same, through Whatsapp message. 17. On 23.09.2018, Mr. Pratik Bhartia Director requested the Defendant to send his copy of Aadhar Card and PAN Card and other Bank details, so that he could transfer back the funds to the tune of Rs. 50 lakhs, to his account. Accordingly, Pratik Bhartia transferred a sum of Rs.30 lakhs to Defendant, on 24.09.2018. 18. The Defendant at the time of arranging the money had promised the lender to return their money, on or before 24.09.2018. He thus, made a request to Mr. Pratik Bhartia to immediately send the balance amount of Rs.20 lakhs to him. The balance amount of Rs.20 lakhs was sent by Mr. Pratik Bhartia, on 28.09.2018. On receipt of this total sum of Rs. 50 lakhs from Mr. Prat....
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....e total sham and moon shine. The WhatsApp chats on which the Defendant had placed reliance to show that he had paid Rs.30 lakhs, was insufficient to even draw an assumption of such cash loan having been advanced by the Defendant to the Plaintiff. Even otherwise, such a transaction would be in gross violation of Income Tax Act, 1961 which does not permit any transaction in cash above Rs.20,000/-. 24. The learned District Judge thus, found no grounds for granting of Leave to Defend and the Suit of the Plaintiff was decreed in the sum of Rs. 72,13,890/- along with interest @ 9% per annum from the date of institution of the Suit till the date of decree. RFA No.361/2024: Challenge to the Dismissal of Leave to Defend Application: 25. The Defendant/Appellant, Sandeeip Goel aggrieved by the impugned Judgment dated 16.05.2023 and Decree dated 25.09.2023, has preferred RFA No.361/2024. The grounds of challenge are that a patent illegality has been committed in the impugned Judgment and Decree, since the Respondent had failed to produce any documents to show and demonstrate that Appellant/ Defendant had ever requested for any loan of Rs. 50 lakhs. The WhatsApp chats have been complet....
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....oms of the trade and also the facts of each case. The Trial Courts were advised to grant leave to defend to the defendant, in the case on the basis of the principle/ test laid down in the case of Machalec Engineering and Manufacturers vs. Basic Equipment Corporation 1977 AIR 577 and Sunil Enterprises vs. S.B.I Commercial and International Bank Ltd. AIR 1988 SUPREME COURT 2317. 33. This Court in M/s Sakata INX (India) Ltd. vs. M/s Rexor India Limited & Ors. 2015 SCC OnLine Del 13445 had observed that where the supply of goods was through Invoices, they are itself a Contract/ Agreement, and thus, demand on the basis of running Account, may be justified. 34. However, in the present case, there is no written contract/ agreement signed and executed between the parties. It is further asserted that the alleged Demand Notice is false, frivolous, bogus, misconceived and a part of ploy of the Plaintiff Company. 35. Moreover, the Appellant asserted that he had good defence to contest the Suit and, therefore, the impugned Judgment be set aside and the Leave to Defend by granted and the Suit be decided on merits. 36. The Respondent/Plaintiff Zavenir Developers Private Limited in the....
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.... interest. An illegality has been committed in terms of Section 34 CPC by granting pendent lite Simple Interest @ 9% Simple Interest and not granting any future interest. 41. Reliance is placed on Central Bank of India vs. Ravindra & Ors. (2002) 1 SCC 367, wherein the Supreme Court had held that the principal sum so adjudged is such principal sum within the meaning of Section 34 on which pendente lite and future interest i.e. post decree interest at such rate and for such period for which the Court may deem fit, may be awarded by the Court. 42. Similarly, in the case of Space Enterprises vs. Srivivasa Enterprises Ltd. 1998 (45) DRJ 375 it was held that in case the agreed rate of interest, the court is only required to see that it is not exorbitant, unconscionable and against the public policy of keeping the interest pegged at a reasonable rate of interest, which may vary by one or two percent from the rate of interest at which Banks advances monies for the purpose of commercial transactions. In that case, the interest of 24% not being compoundable and being simple, was held to be reasonable. 43. The Plaintiff has claimed that denial of agreed rate of interest between the p....
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....o reflected in the WhatsApp conversations between the Appellant and the Director of the Company. However, while the Appellant has tried to explain an earlier transaction of Rs. 50 lakhs, but the documents placed on record, said a different story. 51. As per the bank account of the Plaintiff Company, a NEFT transaction for transfer of Rs.30 lakhs on 24.09.2018 and of Rs.20 lakhs on 28.09.2018. The statement of the account clearly establishes the transfer of Rs. 50 lakhs through bank transaction to the Appellant. Not only this, the whole issue is settled by a Confirmation of Accounts Letter dated 01.04.2019, for the period from 01.04.2018 to 31.03.2019 written by the Plaintiff to the Defendant. 52. This Confirmation of Accounts Letter not only mentions about the two Bank transfers of Rs.30 lakhs on 24.09.2018 and Rs.20 lakhs on 28.09.2018 through NEFT to the account of the Defendant, but it has also indicated against the two bank transactions that it is a loan given interest @ 15% p.a., with quarterly compounding interest repayable on loan. 53. Further, this Statement reflects that interest @ 15 % p.a., was payable on three occasions by the Defendant; first, in the sum of Rs....
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....e parties to the Petitioner's firm. There was a promise, there was a consideration, there was an acceptance, all the elements essential for formulation of written contract was present. Nothing more is required in this acknowledgement to make it a contract. 59. The defence of Sandeep Goel, that he had arranged for a cash amount of Rs. 50 lakhs for a few days, through cash for the Plaintiff, is nothing but a sham and moonshine. The Defendant has merely claimed that he had arranged the money from some friend, but has failed to disclose the source or to explain from where he had arranged the cash amount as alleged by him. 60. The defence raised by him, does not disclose any triable issue. The learned District Judge rightly, dismissed the Leave to Defend Application and decreed the Suit of the Plaintiff. There is no merit in the Appeal preferred by the Appellant, Sandeep Goel, which is hereby, dismissed. RFA 718/2024: In Respect of Interest: 61. The second aspect for consideration is the Appeal filed by the Plaintiff who had sought the enhancement of pendente lite interest @ 15% to be compounded quarterly instead of 9% p.a. and also for future interest at the same rate, which h....
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....l Limited and another. Vs Securities & Exchange Board of India 2004 (8) SCC 524 it was held that interest can be awarded in terms of an Agreement or statutory provisions. It can also be awarded by reason of usage or trade having the force of law or on equitable considerations. Interest cannot be awarded by way of damages, except in cases where money due, is wrongfully withheld and there are equitable grounds thereof, for which a written demand is mandatory. In the absence of any agreement or statutory provision or a mercantile usage, interest payable can be only at the market rate. Such interest is payable upon establishment of totality of circumstances, justifying the exercise of such equitable jurisdiction. This judgment was endorsed in Rampur Fertiliser Limited vs. Vigyan Chemicals Industries (2009) 12 SCC 324. 69. Similar observations were made in Thazhathe Thazhathe Purayil Sarabi vs. Union of India (2009) 7 SCC 372, wherein it was held that when there is no specific provision for grant of interest on any amount due, the Court may award interest in their discretion, under the provisions of Section 3 of the Interest Act and Section 34 of the CPC. 70. In M/s Tomorrowland L....