K KRISHNAMOORTHY Vs. INVESTMENT TRUST OF INDIA

JUDGEMENT

(1.) Challenge in these appeals is the judgment and decree dated 11.07.2003 in O.S.No.7731 of 1996 on the file of VII Additional Judge, City Cviil Court, Chennai, in which the trial Court directed the defendants to pay a sum of Rs.5,87,563/- together with interest at the rate of 18% per annum from the date of plaint till the date of realisation.

(2.) The 2nd defendant is the appellant in A.S.No.65 of 2012 and the 4th defendant is the appellant in A.S.No.135 of 2005. The 1st defendant is the Private Limited Company and defendants 2 to 4 are the directors of 1st Defendant Company. On 12.4.1985, the plaintiff leased out certain machineries to the 1st defendant Company under Ex.A.2 equipment lease agreement dated 12.4.1985 on rental basis. For first sixty months, rent is payable at the rate of Rs.8,675/- per month and thereafter at Rs.100/- per annum till the equipments become scrap. The 1st monthly rental was payable on 12.5.1985 and the subsequent monthly rentals are to be paid on the same date of every succeeding months. On 12.4.1985, defendants 2 and 4 have executed Ex.A.3 - letter of undertaking in favour of plaintiff company undertaking to pay the monthly rentals and outgoings on the respective due dates without fail. On the same date (12.4.1985), the 2nd defendant had also executed Ex.A.4 personal guarantee in favour of plaintiff agreeing to reimburse and compensate in case of default of rents, adverse remarks, loss or damage to equipment that may be caused to the plaintiff company by the lessee or their agent.

(3.) Case of plaintiff is that the 1st defendant failed and neglected to pay the monthly rentals within the stipulated dates and the defendants are in arrears of Rs.2,66,150/-. As per clause 19 of Ex.A.2 - agreement, the defendants are liable to pay lease rentals with interest subject to a minimum rate of thirty percent per annum. Since the defendants failed and neglected to pay the rentals, the plaintiff had terminated Ex.A.2 - equipment lease agreement (dated 12.4.1985). As a result of such termination, as per clause 23 of the agreement, the 1st defendant is liable to pay lease rental and the interest totalling Rs.5,87,563/-. Defendants 2 to 4, being the guarantors, all the defendants are jointly and severally liable to pay to the plaintiff the suit claim of Rs.5,87,563/- together with interest at the rate of 18% p.a. from the date of suit till the date of realisation.