M/S KANCHAN INDIA LIMITED vs M/S SHALIMAR ELECTRICALS

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HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil First Appeal No. 152/2020
M/s Kanchan India Limited, Through Its Managing Director, M/s
Kanchan India Limited, 19-20, Bhilwara Textile Market, Pur Road,
Bhilwara, Rajasthan.
---Defendant-Appellant
Versus
M/s Shalimar Electricals, Bazar No. 2, Bhilwara, Statva
Pratishtan Through Statavdhari Shri Satyanarayan Son of Late
Shri Ramchandra Ajmera, Aged About 58 Years, Profession
Buisness, Resident of Bazar No. 2, Bhilwara (Raj.)
---Plaintiff-Respondent
For Appellant(s) : Mr. Rajendra Sharma
For Respondent(s) : Mr. Nirmal Solanki with
Ms. Pragya Pandey
HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA
HON'BLE MR. JUSTICE BIPIN GUPTA
Judgment
REPORTABLE
Date of hearing and conclusion of arguments 06.05.2026
Date on which the judgment was reserved 06.05.2026
Whether the full judgment or only the operative
Full Judgment
part is pronounced
Date of pronouncement 21.05.2026
(Per Hon’ble Mr. Justice Bipin Gupta )
1. The present Civil First Appeal has been preferred by the
defendant-appellant assailing the judgment dated 23.10.2019,
passed by learned Commercial Court, Ajmer in Civil Suit No.
189/2018 (124/2014) CIS No. 123/2018, whereby the suit
instituted by the plaintiff-respondent for recovery of amount has
been partly decreed against the defendant-appellant.
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2. The controversy, in a narrow compass, is that a suit came to
be filed by the plaintiff-respondent against the defendant-
appellant for recovery of amount to the tune of Rs.10,24,017/-,
contending therein that on 18.03.2008, the plaintiff-respondent,
who was a dealer of M/s. Schneider Electric India Pvt. Ltd.,
received a purchase order from the defendant-appellant for supply
of electric switchgear worth Rs. 60,43,356/-. The supplies were
effected from 22.04.2008 till 19.05.2008. However, the defendant-
appellant did not take delivery of the goods and, therefore, the
plaintiff-respondent was compelled to store the goods at its
premises/godown. Upon being asked the reason for not taking
delivery of the goods, the defendant-appellant replied that the
requirements had changed and, therefore, a fresh purchase order
would be placed according to the new requirements.
2.1 On 13.08.2008, a fresh purchase order was issued for
material amounting to Rs.44,51,000/-. In compliance with the
fresh purchase order, material worth Rs.44,00,000/- was supplied
from 20.08.2008 to 10.12.2008. However, the defendant-appellant
paid only an amount of Rs.40,00,000/-. Thus, a remaining amount
of Rs. 4,00,000/- was due and payable.
2.2 The plaintiff-respondent, in his plaint, claimed that in its
books of account, against the said purchase order, a principal
amount along with agreed interest amounting to Rs.8,30,774/-
was outstanding. It was also pleaded that, against the purchase
order dated 18.03.2008, since the material was not taken by the
defendant-appellant, the plaintiff-respondent had to pay a penalty
to M/s. Schneider Electric India Pvt. Ltd., amounting to
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Rs.1,93,243/-. Thus, a suit was filed for recovery of total amount
of Rs.10,24,017/-.
2.3 The defendant-appellant filed a detailed written statement
admitting the fact of the purchase order for supply of switchgear
worth Rs.60,43,356/-. It was further contended that the material
supplied pursuant to the subsequent purchase order was not of
standard quality and, therefore, a debit note of Rs.4,00,000/- was
issued to the plaintiff-respondent. It was also contended that the
penalty allegedly paid by the plaintiff-respondent to M/s.
Schneider Electric India Pvt. Ltd., amounting to Rs.1,93,243/-,
could not be recovered from the defendant-appellant, in absence
of any privity of contract. On the aforesaid grounds, dismissal of
the suit was prayed for by the defendant-appellant.
3. On the basis of the pleadings of the parties, the learned
Commercial Court framed as many as eleven issues which reads
as under:
“
4- mHk;i{k ds mDr vfHkopuksa ds vk/kkj ij U;k;ky; }kjk
fuEufyf[kr fookn fcUnw fojfpr fd;s x;s%&
1- D;k iSjk 4 okni= esa ofj;krk vuqlkj izfroknh dEiuh
dks dz;kns’k vuqlkj oknh us izfroknh dks LukbMj bysDVªhd
bf.M;k izk-fy- ls dqy 37]82]97]760-60 iSls dk eky ifjogu ds
tfj;s Hkstk] ftldh fMysojh izfroknh us izkIr djus ls euk dj
fn;k] blfy;s oknh dks vius dk;Z LFky ij Hk.Mkju djuk iM+k\
2- D;k iSjk 5 okni= esa ofj;rk vuqlkj oknh us izfroknh
dks lIykbZ fd;s x;s eky ds Hkqxrku Lo:i LukbMj bysDVªhd
bf.M;k izk- fy- dks bl iSjk esa of.kZr fofHkUu pSds Hksts ysfdu
mDr pSd vuknfjr gks x;s\
3- D;k iSjk 7 okni= esa of.kZrkuqlkj izfroknh dEiuh }kjk
fnukad 13-08-2008 dks fn;s x;s uohu dz; vkns’k dh ikyuk esa
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oknh QeZ us fnukad 14-08-2008 dks 32 yk[k o 12 yk[k :Ik;s dk
eky fMyhoj fd;k] ftlds Hkqxrku Lo:i izfroknh us oknh dks
dqy pkfyl yk[k :Ik;s ds fofHkUu pSd fn;s] vkSj bl izdkj dqy
44 yk[k :Ik;s dk eyk Hkstk] ftlds cnys esa pkfyl yk[k :Ik;s
oknh dks izkIr gq,] vkSj bl izdkj pkj yk[k :Ik;s cdk;k jgsa\
4- D;k oknh izfroknh ls nkok d`r 10]24]017@& : izkIr
djus dk vf/kdkjh gS\
5- D;k iSjk 3 fyf[kr dFku esa of.kZrkuqlkj DokfyVh dk
eky uk Hkstdj ?kfV;k fdLe dk eky Hkstk ftls izkIr djus ls
izfroknh us ln~Hkkfod :Ik ls euk dj fn;k] ftlesa izfroknh dk
dksbZ ugha gS\
ददष
6- D;k iSjk 8 fyf[kr dFku esa of.kZrkuqlkj izfroknh dk eSa]
LukbMj bysDVªhd bf.M;k izk-fy- ls dksbZ vuqca/k ugha gqvk] rFkk
uk gh mlus oknh dks dHkh vfxze Hkqxrku fd;k] vr% okn [kkfjt
fd;s tkus ;ksX; gS\
7- D;k oknh }kjk vuQs;j VszM izsfDVl dh tk jgh gS] vr%
oknh] izfroknh ls dksbZ jkf’k izkIr djus dk vf/kdkjh ugha gS\
8- D;k oknh dks dksbZ okn gsrqd izkIr ugha gS\
9- D;k iSjk 11 fyf[kr dFku esa of.kZrkuqlkj okn dkykrhr
gksus ls [kkfjt fd;s tkus ;ksX; gS\
10- D;k iSjk 16 fyf[kr dFku esa of.kZrkuqlkj LukbMj
bysDVªhd bf.M;k izk-fy- vko’;d i{kdkj gS] ftlds vHkko esa okn
viks .kh; gS\
ष
”
11-
अनतदष
3.1 In support of its pleadings, the plaintiff-respondent examined
two witnesses and produced various documents in evidence. On
the other hand, the defendant-appellant examined only one
witness in support of his case.
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3.2 Issue Nos.1 and 3 were decided in favour of the plaintiff.
Issue No.2 was decided against the plaintiff. Issue No. 4 was
partly allowed in favour of the plaintiff wherein the it was held
entitled to receive the outstanding amount of Rs.4,00,000/- along
with agreed interest @ 24% from the date of service of notice i.e.
01.12.2011. Issue No. 5 was decided against defendant. Issue No.
6 was partly allowed in favour of the defendant. Lastly, Issue Nos.
7 to 10 were also decided against defendant.
3.3 Upon appreciation of the oral and documentary evidence
available on record and on the basis of finding of the issues, the
learned Commercial Court vide judgment dated 23.10.2019 partly
decreed the suit and held that the plaintiff-respondent is entitled
to recover a sum of Rs.4,00,000/- from the defendant-appellant
along with interest @ 24% per annum from 01.12.2011 i.e. the
date of issuance of notice.
4. Being aggrieved by the judgment dated 23.10.2019, the
defendant-appellant has preferred the present first appeal before
this Court.
5. Learned counsel for the defendant-appellant, at the outset
during the course of arguments, has confined his appeal only to
the extent of interest awarded by the learned Commercial Court @
24% per annum from the date of the notice being issued by the
plaintiff-respondent i.e. on 01.12.2011.
5.1 Learned counsel for the defendant-appellant also submitted
that the condition of interest @24% per annum from the date of
notice amounts to unilateral stipulations and are not binding.
Moreover, the invoices as relied upon by the plaintiff-respondent
are purely unilateral documents generated by the firm of the
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plaintiff-respondent in the ordinary course of its own business and
do not constitute a concluded agreement between the parties
regarding payment of interest.
5.2 Learned counsel for the defendant-appellant submitted that
no independent agreement, correspondence, purchase order,
acknowledgment, or any other contemporaneous material was
produced on record to establish that the defendant-appellant had
ever expressly consented to, accepted, or agreed upon such
condition relating to payment of interest on delayed payments.
Mere printing of a stipulation upon the invoices, without any
signature, acknowledgment, or assent on behalf of the defendant-
appellant, could not itself create a legally binding contractual
obligation.
5.3 Learned counsel for the defendant-appellant further
submitted that a contractual stipulation is legally enforceable only
when the same is mutually agreed upon between the parties. A
unilateral recital incorporated in invoices after execution of
transactions cannot be treated as an enforceable term of contract
unless it is specifically shown that the purchaser had knowledge
thereof and consciously accepted the same. In the present case,
the plaintiff-respondent utterly failed to establish any prior
consensus ad-idem between the parties with respect to levy of
interest @ 24% per annum on delayed payments. Thus, the
learned Commercial Court committed illegality while mechanically
relying upon the printed conditions contained in the invoices while
awarding interest at such exorbitant rate.
5.4 Learned counsel for the defendant-appellant contended that
the invoices in question are merely piece of evidence of supply of
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goods and cannot independently operate as a contract governing
the terms between the parties specifically the rate of interest for
delayed payments. In absence of any such written agreement
executed between the parties prescribing the rate of interest in
case of delayed payment, the learned Commercial Court ought not
to have presumed acceptance of such onerous and burdensome
condition merely on the basis of unilateral printed clauses.
Furthermore, general commercial practice or usage cannot
override the fundamental principle of mutual agreement
particularly when the stipulation sought to be imposed is a
substantial financial liability.
5.5 Learned counsel for the defendant-appellant further
submitted that @ 24% per annum as imposed on delayed
payment is highly excessive, unconscionable, and penal in nature.
Such exorbitant rate is contrary to settled principles governing
award of interest in commercial disputes and is wholly
disproportionate to prevailing banking and market lending rates.
Learned counsel contended that time and again it has been
consistently held that interest awarded in commercial matters
must be reasonable, fair, and in consonance with prevailing
commercial practices, and that punitive or oppressive rates of
interest ought not to be enforced merely because they are printed
in unilateral documents.
5.6 Learned counsel for the defendant-appellant thus submitted
that the impugned order suffered from patent illegality insofar as
the learned Commercial Court failed to examine whether the
alleged stipulation regarding interest constituted a valid and
enforceable contractual term and further failed to consider the
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unreasonable and penal nature of the claimed rate of interest. The
impugned findings, therefore, deserve interference by this Court.
Learned counsel for the defendant-appellant thus prayed that the
present appeal be allowed and the impugned judgment dated
23.10.2019 be quashed and set aside to the extent it awards or
recognizes interest @ 24% per annum from the date of issuance
of notice i.e. 01.12.2011.
6. Per contra, learned counsel for the plaintiff-respondent, while
supporting the impugned order, submitted that the learned
Commercial Court has committed no illegality in awarding interest
@ 24% per annum inasmuch as the said rate of interest formed
part of the express commercial terms and conditions stipulated in
the invoices as issued which governed the transactions between
the parties. Learned counsel further submitted that every invoice
raised by the plaintiff-respondent clearly stipulated that delayed
payments would carry interest @ 24% per annum and the said
invoices were duly received and acted upon by the defendant-
appellant without any demur, protest, or objection whatsoever.
6.1 Learned counsel for the plaintiff-respondent further
submitted that the transactions between the parties were purely
commercial in nature and were carried out over a considerable
period of time in the ordinary course of business. The defendant-
appellant not only accepted the supplies made pursuant to the
fresh purchase order on the invoices supplied but also made part-
payment against the very same invoices. Learned counsel thus
submitted that such conduct unmistakably establishes the
acceptance of terms and conditions incorporated in the invoices,
including the stipulation relating to the imposition of interest on
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delayed payment. Learned counsel for the plaintiff-respondent
therefore submitted that once the invoices containing the
stipulation related to interest was accepted and acted upon, the
party receiving the goods cannot subsequently be permitted to
dispute the clause relating to interest.
6.2 Learned counsel for the plaintiff-respondent submitted that
invoices constitute an integral part of the contractual
documentation between the parties in commercial transactions
and the terms incorporated therein are binding when the goods
supplied under such invoices are accepted without protest.
Learned counsel contended that the defendant-appellant, despite
having full knowledge of the stipulation regarding interest, neither
returned the invoices nor objected to the said condition at any
point of time during the subsistence of the commercial
transactions and therefore, the argument now raised by the
defendant-appellant that the invoices were unilateral documents is
wholly misconceived and contrary to the conduct of the defendant-
appellant itself.
6.3 Learned counsel for the plaintiff-respondent further
submitted that the rate of interest as stipulated in the invoices and
awarded by the learned Commercial Court cannot be considered
as exorbitant or arbitrary as the transaction pertain to the year
2008 and the defendant-appellant had wrongfully withheld the
payment of the plaintiff-respondent since that time. Learned
counsel for plaintiff-respondent thus submitted that as the plaintiff
-respondent suffered financial liability on account of non-payment
of dues, the award of interest @ 24% per annum was justified,
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particularly when the same was contractually stipulated and
consciously accepted in the course of commercial dealings.
6.4 Learned counsel for the plaintiff-respondent further submitted
that under Section 34 of the Code of Civil Procedure, 1908
(hereinafter referred to as ‘CPC’) confers discretion upon the
Commercial Court to award reasonable interest in commercial
transactions and the proviso to Section 34 CPC specifically
recognizes that in commercial transactions, interest may exceed
the ordinary rate and may extend up to the contractual rate
agreed between the parties. Learned counsel for the plaintiff-
respondent thus submitted that the learned Commercial Court has
awarded interest strictly in consonance with the contractual
stipulation contained in the invoices, and no interference is called
for by this Court in exercise of the appellate jurisdiction and thus,
the present civil first appeal deserves to be dismissed.
7. Heard learned counsel for the parties and perused the
material available on record.
8. The sole controversy which survives for consideration in the
present civil first appeal pertains to the legality, enforceability, and
propriety of the interest awarded by the learned Commercial Court
@ 24% per annum on the outstanding amount, solely on the basis
of a printed stipulation contained in the invoices issued by the
plaintiff-respondent, from the date of issuance of legal notice
dated 01.12.2011.
8.1 Before adverting to the aforesaid issue, it is pertinent to note
that the findings recorded by the learned Commercial Court on all
remaining issues have not been assailed by the defendant-
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appellant before this Court. Consequently, the said findings have
attained finality and do not call for any further adjudication.
8.2 This Court is of the considered opinion that though parties to a
commercial transaction are free to stipulate terms and conditions
governing their business dealings, any condition imposing financial
liability must necessarily emanate from a concluded and
enforceable contract founded upon consensus ad-idem between
the parties.
8.3 It is a settled principle of contract law that for any stipulation
to attain the status of a binding contractual term, the essential
ingredients of a valid contract, namely offer, acceptance, lawful
consideration, and mutual assent, must be clearly established.
Mere printing of a condition upon invoices by one party, without
proof of conscious acceptance thereof by the other party, cannot
by itself constitute conclusive evidence of agreement.
8.4 Although the defendant-appellant accepted the goods supplied
by the plaintiff-respondent and thereby became liable to discharge
the principal outstanding amount, such conduct alone cannot
automatically lead to an inference that the stipulation regarding
payment of interest was also expressly or impliedly accepted.
Acceptance of goods may establish liability towards the principal
amount; however, it does not ipso facto amount to acceptance of
every unilateral term printed subsequently upon the invoices.
8.5 This Court further observes that an invoice is essentially a
unilateral document generated by the seller in the ordinary course
of business. A condition printed therein cannot automatically
attain the character of a mutually binding contractual obligation
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unless it is shown that the purchaser had expressly agreed to or
consciously accepted the same. A unilateral recital or printed
clause, particularly one imposing substantial financial
consequences, cannot bind the opposite party in absence of
evidence demonstrating mutual agreement. Commercial fairness
and settled principles of contract law require that burdensome
conditions, especially relating to exorbitant interest, must be
specifically brought to the knowledge of the other party and
accepted by it.
8.6 Upon consideration of the material available on record, this
Court finds that the stipulation regarding levy of interest @ 24%
per annum is contained only in the invoices raised by the plaintiff-
respondent. A bare perusal of Exhibits 13 and 15 reveals that the
said stipulation formed part of the “Terms and Conditions” printed
upon the invoices, wherein it was mentioned that interest @ 24%
per annum would be charged if payment was not made within
seven days.
8.7 Further, Exhibit-14, which is merely a handwritten
acknowledgment evidencing receipt of goods by the defendant-
appellant, nowhere records any stipulation regarding interest nor
does it indicate acceptance of the said condition.
8.8 Admittedly, no separate agreement, correspondence,
acknowledgment, undertaking, or contemporaneous document has
been placed on record to establish that the defendant-appellant
had expressly consented to or mutually agreed upon the said rate
of interest. In absence of any such material evidencing acceptance
of the specific condition relating to interest, the invoices relied
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upon by the plaintiff-respondent cannot ipso facto constitute a
concluded and binding contractual stipulation between the parties.
8.9 A further perusal of the record reveals that even the purchase
orders dated 18.03.2008 (Exhibit 4) and 13.08.2008 (Exhibit 11),
which constitute the foundational documents governing the
transactions between the parties, are completely silent regarding
any stipulation pertaining to payment of interest on delayed
payment. Had there been any prior agreement between the
parties regarding levy of interest, the same would ordinarily have
found mention in the purchase orders or related contractual
documents. The complete absence of such a stipulation
significantly weakens the case of the plaintiff-respondent
regarding existence of a concluded agreement on interest.
8.10 This Court also finds considerable substance in the
testimonies of the witnesses produced by the plaintiff-respondent
neither stated in their affidavits nor deposed during cross-
examination that the interest clause had ever been specifically
negotiated, communicated, or accepted by the defendant-
appellant. The absence of any oral or documentary evidence
demonstrating mutual assent clearly leads to the conclusion that
there was no meeting of minds between the parties with respect
to the levy of interest @ 24% per annum.
8.11 In view of the absence of any concluded contract regarding
payment of interest, the provisions contained in Section 61 of the
Sale of Goods Act, 1930 (hereinafter referred to as “the Act of
1930”) become applicable. Section 61 of the Act of 1930
specifically provides that in absence of a contract to the contrary,
the Court may award interest at such rate as it deems fit having
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regard to the facts and circumstances of the case. The said
provision empowers the Court to grant reasonable interest
keeping in view the nature of the transaction, conduct of the
parties, equities involved, and prevailing commercial practices. For
ready reference, Section 61 of the Act of 1930 is reproduced
hereinbelow:
“61. Interest by way of damages and special
damages.—
(1) Nothing in this Act shall affect the right of the seller or
the buyer to recover interest or special damages in any
case where by law interest or special damages may be
recoverable, or to recover the money paid where the
consideration for the payment of it has failed.
(2) In the absence of a contract to the contrary, the Court
may award interest at such rate as it thinks fit on the
amount of the price-
(a) to the seller in a suit by him for the amount of the
price-from the date of the tender of the goods or
from the date on which the price was payable;
(b) to the buyer in a suit by him for the refund of the
price in a case of a breach of the contract on the part
of the seller-from the date on which the payment was
made.”
8.12 Thus, although the plaintiff-respondent may not possess an
enforceable contractual right to recover interest at the stipulated
rate of 24% per annum, the Court nevertheless retains
discretionary jurisdiction to award reasonable interest on equitable
considerations.
8.13 This Court further finds support from the proviso appended
to Section 34 CPC, which provides that in cases arising out of
commercial transactions, the rate of further interest may exceed
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6% per annum, but shall not exceed the contractual rate of
interest, and where no contractual rate exists, the rate at which
monies are lent or advanced by nationalized banks in relation to
commercial transactions.
8.14 The legislative intent underlying the aforesaid proviso clearly
demonstrates that even in commercial matters, the Court retains
discretion to determine a reasonable rate of interest where no
concluded contractual rate is established. Therefore, merely
because a condition regarding interest is printed upon invoices,
the same cannot invariably bind the parties unless it is established
that such condition formed part of a mutually accepted contract.
8.15 This Court derives support for this opinion from the judgment
rendered by the Hon’ble Apex Court in the case of M/S. Oriental
Structural Engineers Pvt. Ltd. vs State of Kerala ; (2021) 6
SCC 150 wherein the Court was of the firm opinion that the
fundamental principle is that interest payment is essentially
compensatory in nature. The Court considered even the imposition
of 12% as exorbitant and excessive and reduced the same to 8%
keeping in view the compensatory nature of the interest condition.
The relevant paragraphs of the judgment are reproduced herein
below:
“13. The underlying principle guiding award of interest
is that interest payment is essentially compensatory in
nature. But as we have already observed, in the case
before us, interest on delayed payment formed part of
the contract itself. The agreement did not contain any
express exclusion clause on payment of interest on
delayed payment whether on component of payment in
foreign currency or local currency. We accept the
reasoning of the Tribunal on the basis of which it
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rejected the respondents’ plea of waiver. This was a
finding of fact on appreciation of materials placed
before the Tribunal. One of the reasons behind the
decisions of the Appellate Court and Arbitration Court
was that the appellants, while bidding, had given up
their claims for interest. In substance, the
respondents’ assertion is that the Tribunal went
beyond the contractual terms, and the said two fora
sought to invoke the principle of law contained in the
third subhead of the “patent illegality” principle
elaborated in the case of Associate Builders (supra).
……
17. In our opinion, the view taken by the Tribunal on
consideration of the contract was both reasonable and
possible view. We, however, are of the opinion that the
rate at which interest has been directed to be paid as
contained in paragraphs 1.6 and 1.8 of the award,
which we have reproduced above, are rather
excessive. As the agreement is silent on the point of
rate of interest but provides for payment of interest on
delayed payment, the Tribunal’s exercise of fixing the
rate should have been on the basis of applying the
principle laid down in paragraph 43.1. in the case of
G.C. Roy (supra). The said principle is applicable in a
proceeding under the 1996 Act as well. This principle
has been broadly incorporated in Section 31(7) (a) of
the 1996 Act. The only difference between the
situation contemplated in the aforesaid provision and
the facts of this case is that the agreement involved is
not silent on interest entitlement of the appellants on
delayed payment but the agreement contains provision
for such payment. Only the rate at which interest
would be payable remained unspecified. In our view,
simple interest at the rate of 8% would be just and
equitable on the sum left unpaid, calculated otherwise
on the basis of sub paragraphs 1.6. to 1.8 of the
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award. We, accordingly, set aside the judgment of the
Division Bench of the High Court of Kerala impugned in
this appeal on the point of entitlement of the
appellants to receive interest on delayed payment in
relation to local currency component of the contract.
As a consequence, judgment of the Sixth Additional
District Judge, Ernakulam, shall also stand invalidated.
The award of the Tribunal shall stand sustained so far
as direction to pay interest on delayed payment of the
local currency component of the agreement is
concerned, but the rate of interest on the sum shall be
computed in the manner prescribed in paragraphs 1.6,
1.7 and 1.8 and shall be at 8% simple interest per
annum.”
8.16 This Court further finds substance in the contention advanced
by learned counsel for the defendant-appellant that the rate of
interest @ 24% per annum is highly excessive, exorbitant, and
penal in nature. Even in commercial transactions, the Courts are
not precluded from examining whether such rates of interest are
excessive.
8.17 In the present case, where no concluded contract regarding
interest has been established on record, the learned Commercial
Court ought not to have mechanically enforced the unilateral
stipulation printed upon the invoices.
8.18 Moreover, even in cases where contractual stipulations
regarding higher interest rates have been proved, the Courts have
consistently exercised discretion to reduce excessive rates of
interest in order to balance equities and prevent unjust
enrichment. Therefore, in the present case, where the stipulation
itself lacks contractual sanctity, enforcement of interest @ 24%
per annum would be wholly unjustified.
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8.19 Having regard to the nature of the commercial transactions
between the parties, the prolonged withholding of payment by the
defendant-appellant, and the overall facts and circumstances of
the case, this Court is of the considered opinion that the ends of
justice would be adequately met if the rate of interest awarded by
the learned Commercial Court is reduced from 24% per annum to
9% per annum from the date of issuance of legal notice dated
01.12.2011 till actual realization. The reduced rate appropriately
balances the equities between the parties while simultaneously
ensuring reasonable compensation to the plaintiff-respondent for
delayed payment of its legitimate dues.
8.20 Consequently, the present Civil First Appeal is partly
allowed . The impugned judgment dated 23.10.2019 passed by
the learned Commercial Court, Ajmer in Civil Suit No.189/2018
(124/2014), CIS No.123/2018, is modified only to the extent that
the rate of interest awarded in favour of the plaintiff-respondent
shall stand reduced from 24% per annum to 9% per annum from
the date of issuance of legal notice dated 01.12.2011 till actual
realization.
8.21 The findings recorded by the learned Commercial Court on all
other issues remain affirmed, the same having neither been
challenged nor argued before this Court.
8.22 Pending application(s), if any, stands disposed of.
(BIPIN GUPTA),J (SANJEEV PRAKASH SHARMA),ACTING CJ
Sudha/S-1
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