A Bengaluru civil court has directed Moerheim Roses and Trading India Private Limited to pay ₹2.75 lakh in unpaid legal fees to Krishnamurthy & Co. (K Law), along with 9% annual interest, while ruling that the company’s directors cannot be held personally responsible for the debt merely because they managed its affairs.
Additional City Civil and Sessions Judge Shirin Javeed Ansari held that the company’s contractual obligations could not automatically be transferred to its directors without evidence of a separate personal commitment or guarantee.
The dispute stemmed from legal work undertaken by K Law in connection with proceedings before the Karnataka High Court in 2017.
According to the firm, it was engaged through Delhi-based law firm Anand & Anand in January that year. Its work included filing objections, seeking the vacation of an interim stay and arranging representation by senior counsel.
K Law raised invoices amounting to ₹6.10 lakh for the services. Moerheim Roses paid ₹3.35 lakh, leaving ₹2.75 lakh unpaid.
The firm maintained that repeated reminders and a formal legal notice failed to secure the remaining payment. It also relied on email exchanges from 2021 and 2022, which it said showed that the company had acknowledged the outstanding dues and discussed possible payment arrangements.
After the amount remained unsettled, K Law filed a recovery suit in November 2023, seeking the unpaid fees along with interest at 24% per annum.
Neither the company nor its four directors appeared in court despite receiving summons, and the matter proceeded ex parte.
Directors cannot automatically inherit company debts
The court found that the invoices, payment records and evidence relating to the legal work established the company’s liability to pay the outstanding professional fees.
However, it drew a clear distinction between the company’s obligation and the personal liability of those serving on its board.
The judge observed that holding a directorship does not, by itself, make an individual personally responsible for every contractual or commercial debt incurred by the company.
The court further held that an allegation that the directors were involved in the company’s day-to-day operations was insufficient to establish an independent promise to pay its dues.
Without evidence of a personal guarantee or a separate contractual undertaking, the directors could not be made liable for the unpaid legal bill.
Interest claim reduced from 24% to 9%
The court also declined to grant the 24% annual interest sought by K Law, noting the absence of evidence establishing an agreement between the parties for interest at that rate.
Instead, it directed Moerheim Roses and Trading India Private Limited to pay ₹2.75 lakh with interest at 9% per annum from the date the suit was instituted until the amount is fully recovered. Litigation costs were also awarded to the firm.
The ruling thus secured recovery of the unpaid professional fees from the company while rejecting the attempt to extend that liability to its directors in the absence of a separate legal basis.