Security Client Left Agency’s Evidence Unchallenged, as Karnataka HC Upholds ₹38.55 Lakh in Dues but Cuts Interest to 7.5%

The plaintiff provided security services to the defendant under an agreement and work order.

It claimed that, after crediting payments, Rs.24,98,763 remained due as principal, together with interest, and relied on account statements, an acknowledgment of dues, email correspondence and notices.

The defendant did not file a written statement, cross-examine the plaintiff’s witness or adduce evidence at trial.

The Commercial Court decreed the suit for Rs.38,55,341 with interest at 18% per annum from the date of suit until realization.

The defendant appealed, asserting, among other things, that the claim was time-barred, the accounts had not been reconciled, and the plaintiff had not produced a board resolution authorising the suit.

The appeal was brought under Section 13(1-A) of the Commercial Courts Act, 2015.

The Court invoked Section 119 of the Bharatiya Sakshya Adhiniyam, 2023, to support drawing an adverse inference where the defendant neither challenged the plaintiff’s evidence in cross-examination nor led evidence in rebuttal.

The Court cited no precedent or specific statutory rule to resolve the limitation, account-reconciliation or authorisation objections.

The Court found that the agreement, work order, invoices and account statements supported the plaintiff’s claim, while the acknowledgment, emails and notices further evidenced the outstanding dues.

Because the plaintiff’s oral and documentary evidence remained unchallenged, and the defendant produced no contrary evidence, the Court considered the Commercial Court’s decree justified and drew an adverse inference against the defendant.

It nevertheless considered the 18% interest rate excessive in the circumstances and reduced it.

The Court affirmed the decree for Rs.38,55,341 but modified the interest rate from 18% to 7.5% per annum, payable from the date of suit until realization.

All other findings and conclusions of the Commercial Court were affirmed.