Sardar Sarwan Singh vs Shri Balwinder Singh
2010 Latest Caselaw 5615 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Pronounced on: 09.12.2010

+           CS(OS) 1450/2006

SARDAR SARWAN SINGH                              .....Plaintiff

                            - versus -

SHRI BALWINDER SINGH                             .....Defendant

Advocates who appeared in this case:
For the Plaintiff: Mr. Ram Prakash Gupta with Mr. Sushil
                   Sharma
For the Defendant: None.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may
   be allowed to see the judgment?                           No

2. To be referred to the Reporter or not?                    No

3. Whether the judgment should be reported                   No
   in Digest?

V.K. JAIN, J. (ORAL)

This is a suit for recovery of Rs.22,40,250/-.

The case of the plaintiff, who is a farmer-cum-

teacher, is that the defendant approached him with a

proposal for sending the boys to the foreign countries for

study purposes. The plaintiff paid a sum of Rs.15.45 lakhs

to the defendant to send his son to U.S.A. for study and

employment. The payment was made on different dates

between 16th September, 2002 and 12th December, 2003.

Later, on realizing that the defendant had cheated him on

the pretext of sending his son to U.S.A. for study and

business purpose, the plaintiff requested the defendant to

return back the money. The defendant thereupon issued

two cheques one dated 20 th December, 2004 for Rs.5 lakhs

and the other dated 26th May, 2005 for Rs.6 lakhs both

drawn on Syndicate Bank, Rohini, Delhi. The cheques,

when present to the bank, were dishonoured for want of

sufficient fund in the account of the defendant. The

plaintiff, therefore, has claimed the aforesaid amount of

Rs.15.45 lakhs which he had paid to the defendant along

with interest therein @ 18% p.a. amounting to

Rs.6,95,250/- thereby making a total of Rs.22,40,250/-.

2. The defendant filed the written statement

contesting the suit. It was alleged in the written statement

that the defendant had returned a sum of Rs.14 lakhs to the

plaintiff after deducting Rs.1,45,000/- towards commission

and expenditure. The case set up in the written statement

is that in fact the defendant had facilitated purchase of a

property by the plaintiff in Delhi and had paid Rs. 12 lakhs

as advance for purchase of the said property on behalf of

the plaintiff. The plaintiff thereafter was unable to get the

deed registered on account of his inability to raise further

funds required for executing the sale deed. The defendant

in good faith arranged for cancellation of the deal and in

anticipation of receiving back the advance he agreed to

return Rs.12 lakhs the plaintiff despite the fact that he was

not bound to arrange to return the money which the

plaintiff had paid.

3. The defendant has admitted issuance of two

cheques for a total sum of Rs.11 lakhs to the plaintiff as

well as dishonour of those cheques. He has claimed that on

return of the aforesaid cheques, he made cash payment of

Rs. 11 lakhs to the plaintiff on 10 th January, 2005, but the

cheques were not returned on the pretext that they were

with the advocate of the plaintiff. It is further alleged that

after receipt of notice from the plaintiff, the defendant paid a

further sum of Rs.3 lakhs in cash to the son of the plaintiff

on 28th February, 2006 in full and final payment after

deducting a sum of Rs.1.45 lakhs as commission and

expenditure.

4. The following issues were framed on the pleadings

of the parties on 12th July 2007:-

(i) Whether the defendant paid back a sum of Rs.14,00,000/- to the plaintiff in cash as alleged in preliminary objections No.2 and para 9 on merit of written statement? OPD

(ii) Whether the defendant was entitled to retain a sum of Rs1,45,000/- towards commission and expenditure for alleged property deal? OPD

(iii) If issue Nos. 1 & 2 are not proved, whether the plaintiff is not entitled to the suit amount? OPD

(iv) Whether the plaintiff is entitled to interest, if so at what rate? OPP

(v) Relief.

ISSUE No.1

5. The onus of proving this issue lies upon the

defendant. No evidence at all has been produced by the

defendant. The alleged payment has been denied by the

plaintiff. In his affidavit by way of evidence, the plaintiff has

stated that the defendant had neglected to pay the amount

due and payable to him along with interest. The issue is,

therefore, decided against the defendant and in favour of the

plaintiff.

6. The onus of proving this issue was on the

defendant. The case setup in the written statement is that

the defendant had facilitated a transaction for purchase of

property by the plaintiff and an amount of Rs.12Lac was

paid as advance on behalf of the plaintiff. This is also the

case of the defendant that the plaintiff was unable to

arrange the balance amount of Rs90Lacs and, therefore, the

sale deed could not be executed in his favour. It is also

alleged in the written statement that a sum of Rs1,45,000/-

was deducted by the defendant towards commission and

expenditure whereas the balance amount of Rs14Lacs was

returned to the plaintiff. The case of the plaintiff on the

other hand is that the money was paid to the defendant for

sending his son abroad for studies and

employment/business. Since no evidence has been led by

the defendant to prove the averments made in the written

statement, the issues is decided against him and in favour

of the plaintiff.

7. In view of the findings on issues No. 1 and 2, the

plaintiff is entitled to recover the principal amount of

Rs.15,45,000/- from the defendant.

ISSUE No.4

8. Admittedly, there is no agreement between the

parties for payment of interest. No custom or usage of trade

for payment of interest has either been pleaded or claimed.

Interest cannot be awarded as damages. Since this is not a

suit for price of goods sold and delivered, interest cannot be

awarded even under Sale of Goods Act. However, the

defendant issued two cheques, one for Rs.6Lacs and the

other for Rs5Lacs to the plaintiff. Those cheques, when

presented to the bank, were dishonoured for want of funds.

This factual position has been admitted in the written

statement and has also been proved by the plaintiff.

9. Section 80 of Negotiable Instruments Act, to the

extent it is relevant provides that when no rate of interest is

specified in the instrument, interest on the amount due

thereon shall, notwithstanding any agreement relating to

interest between any parties to the instrument, be

calculated at the rate of eighteen per centum per annum,

from the date at which the same ought to have been paid by

the party charged, until tender or realization of the amount

due thereon, or until such date after the institution of a suit

to recover such amount as the Court directs.

10. In the case before this Court, there is no agreement

between the parties that no interest will be paid by the

defendant to the plaintiff. I find no justification for

restricting the scope of Section 80 of Negotiable Instruments

Act to only those cases, where the instrument provides for

payment of interest, but the rate of interest is not specified

and thereby allows unjust enrichment to a person who has

defaulted in honouring his contractual obligation with

respect to repayment of Principal sum. In my view, the

provisions of Section 80 of Negotiable Instruments Act

would equally apply to those cases where no term regarding

payment of interest is contained in the instrument. Since

the aforesaid provision, as amended, carries interest at the

rate of 18% per annum, consequently, the plaintiff is

entitled to interest at the rate of 18% per annum under

Section 80 of Negotiable Instruments Act and the interest

would be payable from the date on which the principal

amount ought to have been paid by the defendant to the

plaintiff. The view being taken by me find support from the

decision of a Division Bench of Allahabad High Court in

Nath Sah v. Lal Durga Sah, AIR 1936 Allahabad, 160,

decision of the Orissa High Court in Ghasi Patra v.

Brahma Thati, AIR 1962 Orissa 35, decision of Patna High

Court Bishun Chand v. Audh Bihari Lal, AIR 1917 Pat

533 and decision of Karnataka High Court in P. Mohan v.

Basavaraju, AIR 2003 Karnataka 213.

11. Hence the plaintiff is entitled to interest at the rate

of 18% per annum on the amount of Rs11Lacs from the

date these cheques were dishonoured till date of filing of the

suit. The interest cannot be awarded from the date of the

cheques for the simple reason that till the cheques were

presented to the bank, there was no obligation on the

defendant to get them honoured. Calculating at the rate of

18% per annum, interest on the amount of Rs.11Lacs,

according to learned counsel for the plaintiff, comes to

Rs.271305/- from the date these cheques were dishonoured

till date of filing of the suit. The plaintiff is entitled to

recover this amount from the defendant.

12. Section 3 of Interest Act, 1978 to the extent it is

relevant, provides that in any proceedings for the recovery of

any debt or damages or in any proceedings in which a claim

for interest in respect of any debt or damages already paid is

made, the court may, if it thinks fit, allow interest to the

person entitled to the debt or damages or to the person

making such claim, as the case may be, at a rate not

exceeding the current rate of interest. It further provides

that if the proceedings do not relate to any debt other than a

debt payable by virtue of a written instrument at a certain

time, the interest can be award for the whole or part of the

period computed from the date mentioned in this regard in

a written notice given by the person entitled or the person

making the claim to the person liable that interest will be

claimed, to the date of institution of the proceedings.

13. Ex.PW1/D is the legal notice sent by the plaintiff to

the defendant. The receipt of the notice has been admitted

in the written statement and the defendant also sent a reply

to the notice, which is Ex.D-1. Vide this notice, the plaintiff

called upon the defendant to pay a sum of Rs.15,45,000/-

along with interest thereon at the rate of 18% per annum.

However, the notice did not require the defendant to pay

interest from any date prior to the date of the notice.

Hence, the plaintiff would be entitled to interest under the

provisions of Section 3 of Interest Act from the date of the

notice till the date of filing of the suit. Since interest on the

amount of Rs.11Lacs is being awarded under Section 80 of

Negotiable Instruments Act, interest under Section 3 of

Interest Act, 1978 is to be awarded only on the balance

amount of Rs.4,45,000/-. In my view, taking into

consideration the nature of transaction between the parties,

it would be appropriate to award interest to the plaintiff at

the rate of 10% per annum from the date of the notice till

filing of the suit. The amount of interest on Rs.4,45,000/-

@10% p.a., from the date of notice till the date of filing of

the suit, according to the plaintiff, comes to Rs.3110/-.

14. In view of my findings on the issue, the plaintiff is

entitled to recover the principal sum of Rs.15,45,000/- from

the defendant along with interest amounting to

Rs.2,74,415/- making a total of Rs18,19,415/-. The suit is

hereby decreed for recovery of Rs18,19,415/- with

proportionate costs. The plaintiff will get pendente lite and

future interest at the rate of 10% per annum. Decree sheet

be prepared accordingly.

(V.K. JAIN) JUDGE NOVEMBER 09, 2010 Ag