Delhi High Court
Geetu Lakhpat & Another vs Jaipal on 5 April, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.63/2011
% 5th April, 2011
GEETU LAKHPAT & ANOTHER ...... Appellants
Through: Mr. Y.S. Chauhan, Advocate.
VERSUS
JAIPAL ...... Respondent
Through: Mr. Mukesh M. Goel, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal under
Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned
judgment and decree dated 6.10.2010 whereby the suit of the
respondent/plaintiff was decreed for Rs.2,00,000/- alongwith interest @ 2%
per month from 18.2.2002 till realization.
2. Learned counsel for the appellants has in the appeal only prayed
for reduction of the unduly high rate of interest of 2% per month which has
been granted by the trial Court. Reliance has firstly been placed upon
Section 3 of the Usurious Loans Act, 1918 (as applicable to Delhi) as per
RFA 63/2011. Page 1 of 4
which in case of an unsecured loan the maximum rate of interest which is
allowed is 12-1/2% per annum simple. Learned counsel for the appellants
also relies upon various judgments of the Supreme Court as per which the
Supreme Court has directed the Courts to take note of the consistent fall in
the rates of interest on account of the changed economic scenario, more so
when there is time spent in litigation. These judgments of the Supreme
Court are Rajendra Construction Co. v. Maharashtra Housing & Area
Development Authority and others, 2005 (6) SCC 678, McDermott
International Inc. v. Burn Standard Co. Ltd. and others, 2006 (11)
SCC 181, Rajasthan State Road Transport Corporation v. Indag
Rubber Ltd., (2006) 7 SCC 700 & Krishna Bhagya Jala Nigam Ltd. v.
G.Harischandra, 2007 (2) SCC 720 and State of Rajasthan Vs. Ferro
Concrete Construction Pvt. Ltd (2009) 3 Arb. LR 140 (SC).
3. Learned counsel for the respondent, in reply, states that the
respondent is entitled to interest @ 2% per month because the said rate was
a contractual rate of interest.
4. In my opinion, the arguments as urged by the counsel for the
appellants are well founded. In the present date, granting of interest @ 2%
per month is both exorbitant and usurious. The Supreme Court in the
aforesaid judgments, relied upon by the counsel for the appellants, has
granted interest varying between 6% to 9% per annum. A Division Bench of
RFA 63/2011. Page 2 of 4
this Court in the case of Pt. Munshi Ram & Associates (P) Ltd. Vs. Delhi
Development Authority 2010 (3) Arb. L.R. 284 (Delhi) has held that
Court has power to reduce even the pre-suit rate of interest in case the said
rate of interest is found to be against the public policy. In my opinion, rate of
interest of 24% per annum i.e. 2% per month as granted by the trial Court is
clearly against the public policy in the present economic scenario
considering the aforesaid judgments of the Supreme Court. Considering the
facts and circumstances of the present case, I am of the opinion that interest
of justice would be more than served if the respondent is granted interest @
7-1/2% per annum instead of 2% per month i.e. 24% per annum.
5. Learned counsel for the appellants also states that the appellants
had deposited a sum of Rs.1,50,000/- in the trial Court pursuant to the order
of the trial Court dated 4.10.2006, and which amount of Rs.1,50,000/- has
already been withdrawn by the respondent, and so confirmed by the counsel
for the respondent. It is urged that the trial Court has not given adjustment
to the appellants with respect to this amount of Rs.1,50,000/-.
6. In view of the above, the appeal is partially accepted. The
impugned judgment and decree is modified by passing a decree of
Rs.2,00,000/- with interest thereupon @ 7-1/2% per annum simple from
18.2.2002 till 4.10.2006. From 4.10.2006 respondent will be entitled to
interest only on the amount of Rs.50,000/- @ 7-1/2% simple till realization of
RFA 63/2011. Page 3 of 4
this amount. The respondent will give credit of Rs.1,50,000/- received by him
while calculating the net amount due under this judgment. The amount
deposited in this Court by the appellants of Rs.65,000/- will be available to
the respondent in pursuance to the present judgment if so required. Decree
sheet be prepared. Parties are left to bear their own costs. Trial Court
record be sent back.
C.M. No.1964/2011 (stay) in RFA No.63/2011
No orders are required to be passed in this application which is
disposed of in terms of the main judgment.
APRIL 05, 2011 VALMIKI J. MEHTA, J.
Ne
