Plaintiff's claim for Rs. 8,89,350 affirmed; pendente lite and future interest rate reduced from 9% to 6% by the High Court.
In a recent judgment, the Delhi High Court upheld the decision of the Commercial Court which favored the plaintiff, Anil Jain, in a commercial dispute against Feroz Khan and others. The dispute centered around the recovery of an outstanding sum of Rs. 8,89,350 based on invoices and statements of account maintained by the plaintiff's firm, M/s Jain Chemicals. The High Court modified the pendente lite and future interest rate, reducing it from 9% to 6% per annum.
The case, adjudicated by Justices Prathiba M. Singh and Madhu Jain, involved allegations from the defendants that the invoices were fictitious and no goods were actually supplied. However, the court found that the defendants had acknowledged these invoices in their VAT returns, thereby undermining their defense. The principle of "approbate and reprobate" was applied, suggesting that the defendants could not deny the transactions after having benefited from them through VAT input credit.
The High Court considered the plaintiff's evidence, including the invoices and a statement of account, as sufficient proof of the transactions. It was noted that the defendants' defense was not supported by any substantial evidence, such as transportation documents or acknowledgment of goods receipt. The court concluded that the absence of these documents did not necessarily indicate non-supply of goods, especially given the defendants' inconsistent conduct.
The court also addressed the issue of interest rates. While the Commercial Court had granted pre-suit interest at a contractual rate of 18% per annum, the High Court found it appropriate to reduce the pendente lite and future interest rate to 6% per annum, considering the nature of the transaction and prevailing commercial lending rates.
The judgment reinforces the importance of consistency in legal claims and defenses, particularly in commercial transactions. It also highlights the role of documentary evidence and the implications of acknowledging transactions in official records such as VAT returns.
Bottom Line:
Commercial Dispute - Plaintiff entitled to recovery of amount based on invoices and statement of account maintained in the regular course of business, supported by corroborative evidence and admissions of Defendants regarding VAT input credit.
Statutory provision(s):
Commercial Courts Act, 2015, Section 13; Code of Civil Procedure, 1908, Section 96; Evidence Act, 1872, Section 34.
Feroz Khan v. Anil Jain, (Delhi)(DB) : Law Finder Doc id # 2874731
