APPEAL(CAD)/87/2026 of Korral Leather Manufacturers Vs Blue Diamond Leders on 13 October 2026

JUDGMENT

(Judgment of the Court was delivered by N.Sathish Kumar J.) Challenging the judgment and decree passed by the learned Principal Judge, Principal Commercial Court, Egmore, Chennai, dated 09.03.2026, in C.O.S.No.286 of 2024, decreeing the suit for recovery of money, the defendant in the suit has filed the above Appeal.

2. Brief facts of the case are as follows : The respondent/plaintiff is a registered partnership firm engaged in the business of process of leather having its own tanneries in Chennai and Ranipet. It is also engaged in job works by processing raw leather to finished leather for selected entities. The defendant approached the plaintiff in 2020 for a job work. The plaintiff processed and treated raw leather sent by the defendant by doing job work from December, 2020 to October, 2021. The defendant had running account with the plaintiff. The plaintiff raised invoices for the job work done to the defendant from December, 2020 to October, 2021 for a total sum of Rs.28,58,154/-. The defendant made payments then and there upto Rs.14,63,613/- and the outstanding due payable by the defendant was

Rs.13,94,541/-. The last payment of Rs.3,00,000/- was made by the defendant on 25.11.2021. The outstanding due is Rs.13,94,541/-. The defendant issued two cheques dated 17.11.2021 and 25.11.2021 for Rs.5,58,000/- and Rs.7,00,000/- respectively and the same were returned for insufficient funds. Thereafter, the plaintiff sent e-mails calling upon the defendant to clear the outstanding dues. The defendant, in their reply mail dated 13.06.2022, admitted the outstanding amount of Rs.13,94,541/- promising to pay the same in instalments from September, 2022 and by a letter e-mail dated 03.09.2022, the defendant promised to pay in instalments from February, 2023. But the defendant failed to make payment. Therefore, the plaintiff issued a legal notice, dated 30.06.2023, which was replied by the defendant on 12.07.2023 contending that the defendant worked as a consultant to the plaintiff and there is an amount due to be paid by the plaintiff to the defendant. Since the pre- litigation mediation in C.D.No.506 of 2023 failed, the plaintiff filed the present suit for recovery of money.

3. The defendant has filed its written statement admitting the job work done by the plaintiff and stating that the defendant company has been paying amounts regularly and the outstanding amount as claimed by the plaintiff is not correct. According to them, the plaintiff came to the office of the defendant and forcibly collected the cheques, dated 10.11.2021 and 25.11.2021, for Rs.5,58,000/- and 7,00,000/- respectively, drawn on Indian Bank, Pammal

Branch, and presented them for collection without the consent and knowledge of the defendant. It is the further contention of the defendant that the Managing Partner of the defendant company acted as a consultant of the plaintiff from August, 2020 to November, 2021 on a monthly salary of Rs.50,000/- and it was agreed that the consultancy fees will be adjusted with the amount of job work done by the plaintiff. However, the plaintiff has not given credit in its account. Therefore, the defendant sent a reply notice on 12.07.2023 stating the above facts. Hence, the defendant opposed the suit claim.

4. Based on the above pleadings, the Commercial Court framed the following issues :

1. Whether the defendant is liable to pay the suit claim amount as prayed for ?

2. Whether there was any understanding between the parties to adjust the outstanding amount with consultation charges payable to Mr.Rengganaathan as claimed by defendant ?

3. Whether the plaintiff is entitled to the suit claim as prayed for ?

4. To what other relief, the parties are entitled to ?

5. On the side of the plaintiff, P.W.1 was examined and Exs.A1 to A14 were marked. On the side of the defendant, D.W.1 was examined and Exs.B1 to B29 were marked.

6. The Commercial Court, on appreciation of the entire oral and documentary evidence on record, by its judgment and decree dated 09.03.2026, decreed the suit.

7. Challenging the judgment and decree of the Commercial Court, the defendant has filed the above Appeal.

8. The main contention of the learned counsel for the appellant/defendant before this Court is that, since the Managing Partner of the defendant acted as a consultant to the plaintiff company from August, 2020 to November, 2021 on a monthly salary of Rs.50,000/-, it has to be adjusted against the amount payable to the plaintiff, which has not been done by the plaintiff. According to him, if that amount is adjusted, the defendant will not be liable to pay any amount.

9. Heard the learned counsel on either side and perused the entire materials available on record.

10. The only point that arises for consideration in this Appeal is whether the Managing Partner of the defendant company has acted as a consultant to the plaintiff on a monthly salary of Rs.50,000/- ? If so, whether the consultancy fees was agreed to be adjusted ?

11. On a perusal of the entire materials available on record, it is the admitted case of the parties that the plaintiff has done job work to the defendant and the plaintiff has raised invoices for a total sum of Rs.28,58,154/-. It is also admitted that the defendant has made his last payment of Rs.3,00,000/- on 25.11.2021. After paying certain amounts in installments, the outstanding due payable by the defendant, according to the plaintiff, is Rs.13,94,541/-. Though it is case of the plaintiff that two cheques were given by the defendant towards the remaining amount, it is the contention of the learned counsel for the appellant that the two cheques were collected forcibly from the defendant. The said contention of the defendant has no basis and there is no material, whatsoever, on record in this regard. Therefore, once the defendant has admitted the issuance of the two cheques, their contention that the cheques were removed forcibly from their office has to be established by them. However, no evidence, whatsoever, has been produced in this regard.

12. The other contention of the defendant is that the Managing Partner of the defendant company had acted as a consultant to the plaintiff company on a monthly salary of Rs.50,000/- and that the salary amount was agreed to be adjusted towards the amount payable by the defendant towards the job work done by the plaintiff. Except such a pleading and oral evidence, absolutely, there is no evidence, whatsoever, on record to substantiate the said contention of the defendant. There is no evidence, whatsoever, as to the nature of consultanty job undertaken by the defendant to assist the plaintiff. In the absence of any evidence in this regard, we are of the view that the Commercial Court has rightly held that the defendant has failed to prove its case.

13. Once the issuance of the cheques by the defendant is proved and the allegation of the defendant that the cheques have been forcibly collected by the plaintiff has not been established, the plaintiff is certainly entitled to a decree on the basis of cheques which are admittedly signed by the defendant. Therefore, we do not find any merit in this Appeal.

14. Accordingly, this Appeal is dismissed, confirming the judgment and decree of the Commercial Court. No costs. Consequently, connected miscellaneous petitions are closed. (N.S.K.,J.) (G.K.M.,J.) 13-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No MKN To The Principal Judge, Principal Commercial Court, Egmore, Chennai.

N.SATHISH KUMAR J. AND GK.MUTHUKUMAAR J. MKN APPEAL(CAD) No. 87 of 2026 13-10-2026