Authority: High Court of Judicature at Madras

Order Date: September 2026

Case Overview

  • Parties: Appellant/Defendant – F.N. Duari, Proprietor of Cliff India Corporation (a proprietorship engaged in hosiery garment manufacturing). Respondent/Plaintiff – Jayavarma Textiles Private Limited, represented by Manager/Power of Attorney holder P. Ulaganathan.
  • Nature of Proceeding: Appeal under Section 13 of the Commercial Courts Act against the judgment and decree dated 04‑03‑2023 passed by the Principal District Judge, Tirupur, in Commercial Suit No. 69 of 2022.
  • Background: The plaintiff alleged that the defendant purchased 100 % cotton knitted grey fabrics between 10‑03‑2017 and 28‑04‑2017, creating a liability of Rs 58,06,320. The defendant issued five cheques (Nos. 204806‑204811) on 11‑08‑2017 totaling Rs 54,54,000, which were returned for “insufficient funds”. The plaintiff issued a legal notice under Section 138 of the Negotiable Instruments Act and filed criminal complaints (CC Nos. 29 & 30 of 2018, later STC Nos. 2787 & 3693 of 2019). The civil suit was filed for recovery of the alleged debt.
  • Defendant’s Contentions: The defendant claimed the suit was frivolous, the power of attorney was invalid, no enforceable debt existed, the cheques were security, no 18 % interest was customary, and that the plaintiff had supplied yarns—not fabrics—and of sub‑standard quality, causing loss.
  • Trial Court Findings: The trial court, after evaluating oral and documentary evidence, held the defendant liable for the principal sum of Rs 58,06,320 and decreed a total payment of Rs 87,99,563 with interest at 18 % per annum from the date of suit until realization.
  • Appeal Grounds: The appellant argued lack of documentary proof of fabric supply, that only yarns were supplied, that the cheques were security, and that the earlier admission of liability should not bind the present suit.
  • Respondent’s Arguments: The respondent maintained that the defendant had received fabrics, the cheques were dishonoured, and the criminal conviction under Section 138 reinforced the civil liability.

Final Outcome

  • The Madras High Court partially allowed the appeal. It confirmed the trial court’s decree in favour of the plaintiff but modified the interest component, reducing the rate from 18 % to 12 % per annum, applicable from the date of the plaint to the date of realisation.
  • No costs were awarded to either party.
  • All connected miscellaneous petitions were closed.

Topics: Court Judgment, Textile Trade Dispute, Interest Rate Modification