THE HON'BLE SMT. JUSTICE M.G.PRIYADARSINI
A.S.NO.2797 OF 2004
JUDGMENT
Assailing the judgment and decree passed by the court of Junior Civil Judge at Ibrahimpatnam, Ranga Reddy District in O.S.No.35 of 1999 dated 08.04.2002 in decreeing the suit for recovery of money, the defendant filed the present appeal.
2. The respondent herein is the plaintiff in the suit, and it is the dealer and distributor of pesticides and seeds and running business under the name and style of Jyothi Seeds, Hyderguda, Hyderabad, and it is represented by its proprietor P.Sathyanarayana s/o Venkateshwarlu. The appellant is the defendant in the suit.
3. As per the plaint averments, the appellant / defendant was purchasing the pesticides and seeds on credit basis, and was paying part payments, and for the purchases made by him during the year 1995, he was due an amount of Rs.99,526-64 ps., and out of the said amount, after adjusting the amounts he paid, he was found to be due an amount of Rs.54,026.64 ps., as on 17.12.1995. As he failed to pay the said amount despite repeated demands, the respondent / plaintiff issued legal notice on 4.5.1998 demanding the said amount with interest at 24% per annum. As the amount was not paid, it laid the suit for recovery of the money claiming an amount of Rs.54,026-64 ps as principal, and Rs.38,898-36 towards interest from 17.12.1995, to the date of filing of the suit, at the rate of 24% per annum. 2 Thus the plaintiff filed suit for recovery of an amount of Rs.93,425.00 with interest at the rate of 24% per annum, as the transaction being commercial.
4. The appellant / defendant filed written statement before the trial court denying liability.
5. The trial court after framing appropriate issues and considering the evidence, both oral and documentary, adduced by the parties, decreed the suit with costs for Rs.93,425.00 with interest at rate of 24% per annum from the date of the suit till the date of realization. Assailing the same, the defendant in the suit filed the present appeal.
6. In this appeal, learned counsel for the appellant/defendant submits that the trial court has not properly appreciated the evidence available on record while holding that the appellant / defendant is still due an amount of Rs.54,026.64 ps. as on 17.12.1995. He submits that the trial court has erroneously held that the respondent / plaintiff is entitled to interest as calculated by him and for recovery of the amount. He submits that it is not a suit for recovery of money, and it is a suit for the price of goods sold and delivered, where no fixed period of credit was agreed upon. Hence levy of interest at the rate of 24% is excessive and sought to reduce the same.
7. Though notice is served, none appeared for the respondent / plaintiff.
8. As the appeal is of the year 2004 and had undergone number of adjournments, the same is taken up for disposal on merits.
9. In view of the facts and circumstances of the case and the submissions of the learned counsel for the appellant / defendant, the issue 3 that arises for my consideration is 'whether the impugned judgment and decree of the trial court with regard to levy of interest warrants any interference'?
10. The suit is for recovery of price of goods sold and delivered to the plaintiff. The trial court based on the evidence held that the appellant / defendant purchased the goods from the plaintiff vide bills Exs.A-2 to A-7, A- 13 to A-18 and paid certain amounts to the respondent / plaintiff vide Exs.A-8, A-9, A-10, A-11 and A-12 respectively. The trial court further held that appellant / defendant failed to show that he always purchased the goods i.e., pesticides and seeds from the respondents / plaintiffs on cash basis, and that the evidence on record showed that he purchased the goods by payment on credit basis and that he paid certain amount on different dates. The trial court based on evidence held that the appellant / defendant is still due an amount of Rs.54,026/- as on 17.12.1995.
11. The appellant / defendant has not pointed out any contra evidence to interfere with this finding of the trial court.
12. The respondent / plaintiff issued a legal notice on 4.5.1998 demanding the appellant / defendant to pay the amount along with interest at the rate of 24% per annum. But however, the same remained unpaid and hence the suit came to be filed. The plaintiff claimed an amount of Rs.54,026/- towards the principal and Rs.38,898.36 ps. towards interest at the rate of 24% from 17.12.1995 till the date of filing of the suit on 16.12.1998. Thus the principal claim is made at Rs.93,425/- and in the preceding paragraph, it is found that the respondent / plaintiff could prove that appellant / 4 defendant is due an amount of Rs.54,026/- as on 17.12.1995, and the issue is with regard to claim for interest on the said amount till the date of filing of the suit.
13. As noted above, the claim in the suit is for unpaid amount for the goods sold and delivered, and it is a commercial transaction and the plaintiff also issued notice to the defendant claiming the principle amount along with interest at the rate of 24% per annum, and as the same remained unpaid, filed the suit. In these circumstances, the plaintiff is entitled to claim interest at the rate of 24% per annum from 17.12.1995 i.e., the date on which the amount was due for payment, till the date of filing the suit. (See M/s BANGLAORE W.S. AND SEWERAGE BOARD vs. M/S SUGESAN & Co. (P) LTD. AIR 1999 MAD. 49.)
14. A five judge Constitutional Bench of the Apex Court in CENTRAL BANK OF INDIA vs. RAVINDRA {2001(4) SUPPL. SCR 323}, in a reference while considering the meaning to be assigned to the phrases "the principal sum adjudged" and "such principal sum" as occurring in Section 34 of C.P.C., a question of frequent recurrence and having far reaching implications in suits for recovery of money, specially those filed by banking institutions against their borrowers, answered as under:
(1) Subject to a binding stipulation contained in a voluntary contract between the parties and/or an established practice or usage interest on loans and advances may be charged on periodical rests and also capitalised on remaining unpaid. The principal sum actually advanced coupled with the interest on periodical rests so capitalised is capable of being adjudged as principal sum on the date of the suit.
(2) The principal sum so adjudged is 'such principal sum' within the meaning of Section 34 of the Code of Civil Procedure Code, 1908 on which interest pendentelite and future interest i.e. post-decree interest, at such rate and for such period which the Court may deem fit, may be awarded by the Court.
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(3) Corporation Bank v. H.S. Gowda and Anr., [1994] 5 SCC 213 and Bank of Baroda v. Jagannath Pigment & Chem. have been correctly decided."
15. From the above Constitution Bench judgment of Apex Court it is clear that the principal sum actually due coupled with interest by way of capitalization method can be adjudged as principle sum as on the date of filing of the suit, on which interest pendentelite and future interest i.e. post-decretal interest, at such rate, and for such period, which the Court may deem fit, may be awarded.
16. Thus, based on the facts and circumstances and the evidence on record, the the respondent / plaintiff could prove that the appellant / defendant is due an amount of Rs.93,425/-.
17. Coming to awarding of pendentelite and post decretal interest, as per the above Constitution Bench of the Apex Court, the court has discretion. As per the provisio to Section 34 of CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest, or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
18. In the present case there is no written contract between the parties, and the respondent / plaintiff claimed interest at the rate of 24% per annum and also issued legal notice claiming the said rate of interest. Prior to institution of suit, this court has allowed the interest claimed by the respondent / plaintiff. But pendentelite interest and post decree, as noted above, as per 6 the judgment of the Apex Court, this court has discretion, and same requires to be exercised keeping in view the interests rates at which nationalized banks lend money for commercial transactions, and that it shall not be excessive or usurious.
19. In my considered view, levying of interest at the rate of 9% per annum from the date of filing of the suit, till the date of decree, and thereafter till realization at the rate of 7.5% would meet the ends of justice. The issue framed is answered accordingly.
20. Accordingly, the judgment and decree passed by the trial court to the extent of decreeing the suit with costs for Rs.93,425.00 is confirmed. And with regard to rate of interest, the same is modified to the effect that, from the date of filing of the suit till the date of decree, the respondent / plaintiff is entitled to interest at the rate of 9% per annum, and from the date of decree, till the date of realization, it is entitled to interest at the rate of 7.5% per annum.
21. With the above modification with regard to rate of interest, the appeal is disposed of.
22. Interlocutory Applications pending, if any, shall stand closed. No order as to costs.
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M.G.PRIYADARSINI,J DATE: 05--07--2022 AVS