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Hindustan Antibiotics Ltd. v/s Kohli Medical Stores

Company & Directors' Information:- HINDUSTAN ANTIBIOTICS LIMITED [Active] CIN = U24231MH1954PLC009265

Company & Directors' Information:- HINDUSTAN ANTIBIOTICS LIMITED [Not available for efiling] CIN = U99999MH1954PLC009265

Company & Directors' Information:- S S ANTIBIOTICS PRIVATE LIMITED [Strike Off] CIN = U24220MH1997PTC111488

Company & Directors' Information:- HINDUSTAN MEDICAL PRIVATE LIMITED [Active] CIN = U85300MH2021PTC358782

Company & Directors' Information:- R. K. MEDICAL STORES PRIVATE LIMITED [Active] CIN = U33112WB2008PTC123931

Company & Directors' Information:- U S ANTIBIOTICS PRIVATE LIMITED [Strike Off] CIN = U24232UP2002PTC026497

    First Appeal 45 of 1995

    Decided On, 04 September 1996

    At, High Court of Madhya Pradesh


    For the Appearing Parties: B.G. Apte, R.A. Roman, Advocates.

Judgment Text

(1.) THIS appeal arises out of the judgment and decree dated 10-8-1994 passed by the IInd Additional District Judge of Gwalior, whereby the suit of the plaintiff/respondent No. 1 was decreed for recovery of Rs. 38073 with pendente lite and future interest at the rate of Rs. 12 per cent per annum. Costs was also allowed.

(2.) ADMITTED facts are that the defendants/appellants have a manufacturing unit of medicines at Pune. They were supplying antibiotics etc. in different parts of the country. Respondent No. 1/plaintiff, residing at Gwalior, was their commission agent. An agreement between the parties was entered into for marketing, supply of the products produced by the defendants/appellants. Respondent No. 1 M/s Kohli Medical Stores was their commission agent for Gwalior region. In accordance with the terms of the agreement entered into between the parties, respondent No. 1 was entitled to his commission fees from the appellants.

(3.) LATER on some dispute arose and the respondent No. 1 claimed that out of the commission fees of agency, Rs. 38,073/- remained due to respondent No. 1, which was not paid by the appellants, hence the suit was filed for its recovery. The plaintiff/respondent No. 1 had alleged that the agreement between the parties continued upto 31st of March, 1985 and the unpaid amount of commission fees was Rs. 38,073/- which the appellants refused to pay.

(4.) THE defendants/appellants contested the suit on the ground that the Gwalior Court had no jurisdiction. The commission agency was only upto 30-6-1984 and no fees could be paid for the period thereafter.

(5.) THE trial Court framed the following issues on the pleadings of the parties :-

(a) Whether the commission agency between the appellants and respondent No. 1 continued for the period 1-12-1983 to June, 1985?

(b) Whether the amount of Rs. 38,073/- was due as commission fees to the plaintiff/respondent No. 1? (c) Whether there was any agreement for interest between the parties? (d) Whether the suit was not cognizable by the Courts at Gwalior?

(6.) THE trial Court, after recording evidence, held that the agreement between the parties for commission agency continued for the period 1st of December, 1983 to 31st of March, 1985. Rs. 38,073/- were due to the plaintiff/respondent No. 1 and the defendants/appellants were liable to pay the same. The trial Court further held that the Gwalior Courts had jurisdiction to try the suit. With these findings the suit was decreed.

(7.) HEARD learned counsel for the appellants/defendants Shri R. A. Roman, and learned counsel for the Respondent No. 1/plaintiff Shri B. G. Apte and examined the record.

(8.) LEARNED counsel for the appellants/defendants had raised three points in this appeal, namely

(i) The Civil Courts at Gwalior had no jurisdiction; (ii) The commission agency did not continue after 30-6-1984; and (iii) Rate of interest even pendente lite and future could not be allowed beyond 6 per cent per annum.

(9.) ON the first point of jurisdiction, the trial Court had found that the respondent No. 1/plaintiff was residing at Gwalior. He was doing commission agency work on behalf of appellants/defendants for Gwalior region. He was taking orders for supply of medicines from the districts of Gwalior, Morena, Bhind and Shivpuri. He was getting commission from the appellants/defendants from Pune to be paid at Gwalior. The trial Court found that since the amount of commission agency was to be paid at Gwalior, the cause of action arose at Gwalior for the amount due, and therefore, the suit was cognizable by the Civil Court at Gwalior.

(10.) IT is noteworthy that the original letter for agreement was Ex. P/2 on record sent by the appellants/defendants on 29-12-1983, appointing plaintiff/respondent No. 1 as commission agent. Copy of the agreement is on record as Ex. P/4, which was to remain in operation till 31-3-1985. Schedules of payments filed by the plaintiff Ex. P/6 clearly indicate that orders were obtained all in the region of Gwalior including the district of Gwalior and payments were made at Gwalior itself. The original agreement is Ex. P/15 dated December 14, 1983 which was for the period till 31-3-1984 Letter dated 2 4-1984 also indicates the same fact. Later on by letter dated 29-5-1985 Ex. P/16 it was indicated by the defendants/appellants to the plaintiff/respondent No. 1 that the agreement continued only upto 31-3-1985 and the appellants were not responsible for the period thereafter. This letter therefore, indicates that the agreement was for the period December, 1983 till 31-3-1985. For this period, fees of commission agency of respondent No. 1 was paid by the defendants/appellants through cheques to be cashed at Gwalior. The payment was, no doubt, made by the company situate at Pune, but the same was to be received by respondent No. 1 at Gwalior and to be cashed at Gwalior itself. Ex. P/15 to Ex. P/25 indicate that medicines were supplied on the orders placed on behalf of respondent No. 1 and the work of agency was done by the respondent No. 1 at Gwalior.

(11.) IN the oral evidence also, this fact was stated by P. W. 1 Shankar Das Kohli that the entire work of commission agency was being done at Gwalior. P. W. 2 Dr. T. B. Singh also supported this fact.

(12.) ON the other hand, defendants/appellants produced D. W. 1 P. G. Gollakar who also did not deny that the entire commission agency was done at Gwalior. Further letter dated 8-1-1985 Ex. P/3 which was from the defendants' office clearly indicate that the fees of commission agency was paid to respondent No. 1 at Gwalior through cheque to be cashed at Gwalior, and in these circumstances, it is clear on record that the cause of action arose at Gwalior in respect of the amount due to respondent No. 1/plaintiff and the plaintiff could file a suit in the civil Court at Gwalior. Therefore, the point of jurisdiction raised by the defendants/appellants was not in their favour, and the trial Court had rightly held that the civil Court at Gwalior had jurisdiction to try the suit.

(13.) ON the second point, learned Counsel for the appellants/defendants contended that the commission agency was only for the period December, 1983 to June, 1984. Thereafter, the commission agency was not extended, and therefore, the claim of the respondent No. 1/plaintiff for the fees for the subsequent period could not be accepted. But it is evident on record that by letter Ex. P/16 dated 29-5-1985 the defendants/appellants themselves admitted that the commission agency could continue upto 31-3-1985 and thereafter they will not be responsible. Therefore, this letter extended the agreement till 31-3-1985, as such, the claim, put by the plaintiff/respondent No. 1 for the commission fees for the extended period was fully justified and due to respondent No. 1/plaintiff, and the trial Court had rightly decreed the suit for recovery of the amount of Rs. 38,073/ -. The agreement itself for the said period was not disputed. Only dispute was that of the extended period of the agreement till 31-3-1985. The letter Ex. P/16 is not disputed, which is proved on record, which clearly shows that the agreement was extended till 31-3-1985. In this way, the plaintiff was entitled to recover the amount claimed for that period.

(14.) THE trial Court had allowed the pendente lite and future interest on this amount to the plaintiff/respondent No. 1 at the rate of 12 per cent per annum. This could not be allowed in absence of any agreement for interest. There was no agreement for interest between the parties. None of the documents indicates that there

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was any agreement for interest on any amount due as fees for commission agency. In this way, only statutory interest could be allowed as provided under section 34 of the Code of Civil Procedure. In absence of any agreement for interest the limitation of interest under section 34, Indian Penal Code is only upto 6 per cent per annum. Therefore, the interest allowed by the trial Court at the rate of 12 per cent per annum was not justified. (15.) THE result is that, the suit of the plaintiff/respondent No. 1 for recovery of Rs. 38,073/- has rightly been decreed by the trial Court, but the pendente lite and future interest could be allowed only to the extent of 6 per cent per annum. (16.) EXCEPT in the modification of the rate of interest pendente lite and future, as indicated above, this appeal has no merit and is dismissed with costs.