Delhi High Court
Best Choice Enterprises vs M/S J. Sons Agencies on 14 February, 2011
Author: Indermeet Kaur
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 14.02.2011
+ RSA No.108/2004 & CM No.5817/2004
BEST CHOICE ENTERPRISES ...........Appellant
Through: Mr. J S Vohra, Advocate
Versus
M/S J. SONS AGENCIES ..........Respondent.
Through: None
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
1. Whether the Reporters of local papers may be allowed to
see the judgment?
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest?
Yes
INDERMEET KAUR, J. (Oral)
1. This appeal has impugned the judgment and decree dated
09.1.2004 which has endorsed the finding of the trial judge dated
18.3.2003 whereby the suit of the plaintiff M/s J. Sons Agencies has
been decreed for Rs.25,278/- along with interest @ 18% per
annum.
2. The contention before this Court is that the interest granted
during the pendency of the suit and the period thereafter @ 18%
per annum is against the canons of law and not justified either in
terms of Section 34 of the Code of Civil Procedure or under the
provisions of the Interest Act.
3. This is a second appeal. It had been admitted on 08.12.205.
The substantial question of law formulated, reads as under:
Whether the finding in the impugned judgment dated 09.1.2003
qua the quotient of interest is perverse finding? It so, its effect?
Perusal of the record shows that the parties had dealings
with one another; both were partnership firms. Defendant had
issued a cheque in the sum of Rs.28,513.25 to the plaintiff which
on presentation was dishonoured. Legal notice dated 10.11.1993
was issued to the defendant. On 15.11.1993 payment of Rs.14526/-
was made by the plaintiff; contention of the defendant was that this
amount settled all the dues of the plaintiff. This defence set up by
the defendant had not been accepted by the two fact finding Courts
below which finding has not been challenged before this Court.
What has been challenged before this Court is only the quotient of
interest which has been granted in favour of the plaintiff. As per
the appellant there was no contract either written or oral between
the parties on the percentage of interest; such an exorbitant
percentage could not have been granted.
Perusal of the record shows that issue No.5 had been
formulated on this point, it reads as follows:
"To what amount, as the principal and as the interest, the plaintiff
is entitled to recover from the Deft.? OPP
The claim of the plaintiff as decreed for the suit amount i.e.
Rs.25,278/- along with pendentelite and future interest @ 18% per
annum. Admittedly the cheque in question was for Rs.28,513/- of
which Rs.14,526 stood paid on 15.11.1993. Balance sum
recoverable by the plaintiff was Rs.14,256/-. This is also evident
from the notice dated 10.11.1993. In para 8 of the plaint, the
plaintiff has calculated a sum of Rs.10,470/- as interest @ 18% per
annum which has been calculated up to 10.5.1994 i.e. five days
after the filing of the suit and Rs.550/- as charges of the legal
notice.
Admittedly, there was no agreed rate of interest between the
parties. No discussion has also emanated in the judgment of the
two Courts below on this point. The Interest Act, 1978 gives power
to the Court to allow interest at a rate not exceeding current rate
of interest. The transaction in this case related to the year 1993.
Section 34(1) of the Code of Civil Procedure permits interest
pendentelite to be awarded at a reasonable rate and rate of 6% is
prescribed for the period after the passing of the decree. This is
in those cases where there is no contract to the contrary.
In (1997) 10 SCC 681 Mahesh Chandra Bansal Vs. Krishna
Swaroop Singhal & Ors. the Supreme Court had the occasion to
examine the percentage of interest to be awarded on a suit for
recovery for the period during which the suit was pending before
the trial court which was of the year 1980; 12% per annum had
been allowed in that case.
In 2003 (66) DRJ 46 R.C. Datta Vs. Dr. Rajiv Anand a Bench
of this Court had held that in the absence of any documentary
evidence to support the grant of interest @ 24% per annum,
interest granted @ 10% per annum from the demand raised i.e.
from the date of notice which in that case was 08.5.1995 would be
justifiable.
In the instant case, admittedly there was no contract
written/oral stipulating any particular rate of interest. The current
rate in the year 1993 cannot be in any manner exceed 12% per
annum. The impugned judgment is accordingly modified and to
meet ends of justice interest @ 12% per annum be awarded on the
balance principal sum of `14,256/- w.e.f. 15.11.1993 (date of
demand of legal notice, when half of the disputed amount `14256/-
was paid) till the date of realization. Decree be calculated in
terms of the aforenoted modification. It is pointed out by learned
counsel for the appellant that a sum of `35,600/- is lying deposited
in this Court. If any amount is in excess, the same be refunded
back to the appellant.
Appeal is disposed of in the above terms.
Pending application is also disposed of.
INDERMEET KAUR, J.
FEBRUARY, 14, 2011
nandan
