Chennai, October 29, 2021: For deceiving the court with false promises to pay outstanding dues, the Madras High Court has imposed costs assessed at Rs. 25 lakhs payable by Gemini Film Circuit (Appellants) to Venkateswara Financiers (Respondent) in addition to whatever was due in terms of the decree.
A Division Bench of Chief Justice Sanjib Banerjee and Justice P.D Audikesavalu said that the amounts paid during the pendency of the suit and appeal will be adjusted first against the interest due in terms of the decree before being adjusted against the principal.
The entire object of the Commercial Courts Act, 2015 would be defeated if commercial matters are not dealt with by applying commercial principles and by awarding appropriate costs and interest, added the Bench.
The Bench found that a loan for Rs.7.5 crore was obtained by Gemini Film Circuit & Ors (Appellants) in the year 2012 upon agreeing to pay interest at the rate of 27% per annum. Till date, inclusive of interest, a sum of Rs.12.85 crore has been paid and the payments received have to be credited against the interest first before the principal sum is adjusted.
Further, nothing has been shown on facts or in law that could have disentitled the plaintiff from obtaining summary judgment as claimed, added the Bench.
Speaking for the Bench, Chief Justice Banerjee observed that there is no dispute as to the quantum of money received, and no dispute as to the rate of interest as well as no dispute as to how much has been repaid and what remains due.
The High Court went on to opine that defaulting borrowers, like the present Appellants, take advantage of the existing judicial system and prey on its shortcomings.
This is because more often than not, courts do not pass appropriate order for costs and do not take matters to their logical conclusion by taking action in perjury in respect of false affidavits, added the Court.
“There is no real dispute in this case about obtaining the loan or as to the terms of the loan or the nature of the security furnished or the quantum of repayment made. On the basis of what was evident before the trial court, the discretion exercised was perfectly in order and it does not lie in the mouth of the appellants to complain that there has been any flawed procedure or perverse exercise of discretion, particularly since no shred of any possible defence to the claim was indicated by way of any affidavit or document placed before the trial court”, observed Chief Justice.
The High Court found that the appellants took advantage of the system and its delays in dragging the matter over a long period and being bold enough to submit to court that cheques had been issued which were to arrive the next day only to proffer some further specious excuse for the non-arrival of the cheques the following day.
Hence, the High Court dismissed the appeal as being devoid of merits.