After Rs 4 Lakh Deposit, Karnataka HC Leaves Housing Firms Owing Supplier Rs 38,370 Plus 7% Interest

The plaintiff, a supplier and service provider, sued to recover ₹4,38,370, alleging that it had supplied goods and rendered services worth ₹13,17,476 to the defendants, who had paid ₹8,79,106.

The defendants appeared through counsel but filed no written statement and led no evidence. The trial court decreed the suit with interest at 10% per annum from the date of suit until realization.

The defendants appealed, contending that they had paid the amount due and that several bills relied upon by the plaintiff bore no recipient’s signature.

During the appeal, it was undisputed that the defendants had deposited ₹4,00,000 in the execution proceedings.

The Court relied on Section 8 of the Indian Evidence Act, 1872, treating a party’s conduct and silence in response to a claim as relevant circumstances that may support an inference about the probability of that party’s case.

The Court also considered the defendants’ failure to respond to the legal notice, file a written statement, or lead evidence, alongside the documentary evidence produced by the plaintiff. No precedent was cited.

The Court considered the plaintiff’s bills and other documentary evidence, including Exs. P.3–P.5 and P.7–P.10, as supporting the claim.

Although some bills lacked the defendants’ signatures, the Court held that this did not, in the circumstances, negate the transactions.

It also treated the defendants’ failure to reply to the legal notice or contest the claim in the trial court as conduct supporting the plaintiff’s case, applying Section 8 as a relevant circumstance rather than relying solely on silence.

The Court therefore upheld the finding that the defendants owed the balance, but accounted for the ₹4,00,000 deposited in execution when determining the amount remaining payable.

The decree was modified to require the defendants to pay the remaining ₹38,370, with interest at 7% per annum from the date of suit until realization, within ten weeks from the judgment.

The suit costs remained payable by the defendants, and the plaintiff was permitted to withdraw the ₹4,00,000 deposited in the execution court.