Karnataka HC Upholds Rs 2.01 Lakh Decree For Poultry-Feed Dealer, Including Rs 1.2 Lakh Bank Guarantee Invoked Without Notice

The plaintiff, a poultry-feed dealer, sued the appellant company and State Bank of Mysore for recovery of amounts claimed in connection with feed supplies, return of unsold feed, invocation of a bank guarantee, godown rent and the salary of a godown keeper.

The Trial Court decreed the suit against the company for Rs.2,33,900 with 6% interest, dismissing it against the bank.

On appeal, the First Appellate Court reduced the principal sum to Rs.2,01,900.

The company appealed under Section 100 CPC; during the proceedings, its official liquidator represented it following the appointment of a liquidator in the company winding-up proceedings.

The appeal was brought under Section 100 CPC, which provides for a second appeal on a substantial question of law.

The appellant invoked Sections 49 of the Registration Act, 1908 and 34 of the Karnataka Stamp Act, 1957 in challenging the godown-rent claim.

The Court’s reasoning did not cite a specific precedent or set out a separate statutory test under those provisions; it assessed whether the concurrent findings were supported by the pleadings and evidence.

It held that the rent claim could stand on that material even if the insufficiently stamped lease deed was excluded from consideration, and treated the evidence supporting the keeper’s salary and the bank-guarantee claim as sufficient.

The High Court considered the First Appellate Court’s assessment of the documentary and oral evidence, including the return of unsold feed and the bank’s evidence that Rs.1,20,000 had been paid to the appellant after the guarantee was invoked.

It accepted the findings on godown rent and the keeper’s salary as supported by the record, notwithstanding the challenge to the lease deed.

It also agreed that the appellant had not established a basis for retaining the guarantee proceeds and that the First Appellate Court had correctly fixed the recoverable guarantee amount at Rs.1,20,000, rather than Rs.1,40,000.

Finding no ground to disturb the concurrent findings, it rejected the substantial questions against the appellant.

The First Appellate Court’s decree for Rs.2,01,900 with interest at 6% per annum from the date of suit until realisation was left undisturbed.

The Court further ordered that any amount deposited in the appeal and withdrawn by the respondents would remain subject to the Bombay High Court’s orders in Co.P. No.256/2013, without prejudice to the parties’ rights in those proceedings.