Paint Supplier’s ₹28.4 Lakh Decree Against Buyer Stands, Karnataka HC Cuts Interest From 15% To 9%

AkzoNobel India Ltd. sued Unique Roof Private Limited and its directors to recover ₹31,93,549, with interest, for paints and related materials supplied under purchase orders.

The defendants admitted the commercial transactions but alleged short supply, defective goods and unaccounted returns; they also objected to the suit in light of insolvency proceedings and the moratorium order made by the NCLT.

The Commercial Court decreed ₹28,40,494 with interest at 15% per annum, having deducted ₹3,53,055 in respect of invoices associated with returned or allegedly returned goods.

The defendants appealed under Section 13(1A) of the Commercial Courts Act, 2015.

Section 13(1A) of the Commercial Courts Act, 2015 provides the appellate basis for the commercial appeal.

The defendants invoked Section 63 of the Insolvency and Bankruptcy Code, 2016, which bars civil-court jurisdiction over matters entrusted to the Adjudicating Authority; the Court considered that objection in light of the withdrawal of the NCLT proceedings and the absence of a pending proceeding when judgment was delivered.

In assessing the monetary claim, the Court relied on the evidentiary record, including the admitted purchase orders, invoices, delivery records and joint inspection report, and required the defendants’ claims of short supply, returns or discharge to be supported by satisfactory evidence.

For limitation, it applied the Supreme Court’s directions in Suo Motu Writ Petition No. 3 of 2020 concerning exclusion of time during the specified period.

Interest should reasonably compensate for the loss of use of money without imposing an unduly burdensome liability on the judgment debtor.

The Court found that the defendants admitted placing the purchase orders, while their allegations of short supply were unsupported by reliable records.

The joint inspection report recorded both rejected paints and an outstanding balance, as well as proposed instalment payments; the defendants did not prove that the recorded balance was discharged.

Their documents concerning returns and accounts were insufficiently proved, although the Commercial Court had already deducted ₹3,53,055 for four invoices linked to returned or allegedly returned goods.

The moratorium objection did not warrant setting aside the decree because the NCLT proceedings had been withdrawn and were no longer pending when the Commercial Court ruled.

The Court also upheld the limitation finding based on the last payment and the Supreme Court’s exclusion directions.

It nevertheless considered 15% interest excessive in the circumstances and reduced the rate to 9% per annum.

The decree for ₹28,40,494 was affirmed, but the interest rate was reduced from 15% to 9% per annum from the date of suit until realisation.

The Commercial Court’s remaining findings were left undisturbed.