Harjinder Pal Singh vs Ravinder Singh Anand
2011 Latest Caselaw 5305 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Pronounced on: 02.11.2011

+ CS(OS) 2537/2010

HARJINDER PAL SINGH                      ..... Plaintiff
              Through: Mr. S.P. Chugh, Advocate.

                              versus

RAVINDER SINGH ANAND                    ..... Defendant
               Through: Ms. Pukhraj, Advocate.

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)

1. A perusal of the record would show that the

summon in Form 4 under Order XXXVII CPC were served

upon the defendant on 9.1.2011.

2. Neither any appearance nor any Vakalatnama on

behalf of the defendant was filed. When the matter came up

before the Joint Registrar on 21.2.2011, learned counsel for

the plaintiff informed that a notice had been sent to him by

Kulbhushan Mehta & Co. stating therein that appearance

had been filed. Since neither any appearance nor any

Vakalatnama in favour of Kulbhushan Mehta & Co.

Advocates was on record, a notice was directed to be issued

to Kulbhushan Mehta & Co. Thereafter, Vakalatnama in

favour of Mr. B.S.Randhawa, Ms. Pukhraj and Mr. Atul

Verma, Advocates, has been filed on 18.10.2011 and Ms.

Pukhraj, Advocate, is present on behalf of the defendant.

3. Ms. Pukhraj has with her a photocopy of what

purports to be an appearance on behalf of the defendant.

However, the copy which she has with her does not have

any diary number and she is not in a position to disclose

diary number, if any, whereby the appearance may have

been filed by the defendant.

4. In these circumstances, I conclude that no

appearance was filed by the defendant within the prescribed

period. No application for extension of time to put in

appearance has been filed by the defendant. The

Vakalatnama in favour of Mr. B.S.Randhawa, Ms. Pukhraj

and Mr. Atul Verma, Advocates has been filed more than

nine months after receipt of summon by the defendant.

Since the defendant did not file appearance within the

prescribed period, the plaintiff has become entitled to

judgment forthwith

5. The case of the plaintiff is that the defendant had

entered into an agreement to sell his undivided half share in

Flat No.G-1 measuring 3000 sq.ft super area built on the

ground floor along with the basement in property No.F-10,

Rajouri Garden, New Delhi to him for a consideration of Rs.

80 lacs and had received a sum of Rs.27 lacs from him as

earnest money/part payment. It was also agreed between

the parties that in case of breach of the agreement, the

defendant would be liable to pay double the amount

received from the plaintiff i.e., Rs.54 lacs. The balance sale

consideration of Rs.53 lacs was payable to the defendant

on/or before 18.1.2010.

6. The case of the plaintiff is that the defendant

dishonestly refused to perform his part of the contract and

accept the balance sale consideration. He then issued two

cheques for Rs.27 lacs each drawn on State Bank of Indore,

Rajouri Garden, New Delhi to him towards discharge of the

liability in terms of Clause 3 of the Agreement dated 19th

March, 2009. The cheques, when presented to the Bank,

were dishonoured for want of funds. The plaintiff sent a

notice of demand dated 4th August, 2010 to the plaintiff but

the amount of the cheques was not paid to him despite

notice. The plaintiff has now claimed the principal sum of

Rs.54 lacs along with interest amounting to Rs.1,20,000/-

at the rate of 18% per annum, thereby making a total sum

of Rs.55,20,000/-.

7. The plaintiff has placed on record the Agreement to

Sell and Purchase dated 19.3.2009. The receipt of payment

of Rs.27 lacs has been acknowledged in the Agreement.

Clause 3 of the Agreement provides that in case of default,

the first party (the vendor) will be liable to pay double of the

amount paid by the vendee i.e. Rs.54 lacs. The receipt

executed by the defendant in favour of the plaintiff have also

been filed along with the suit. The original cheques are

stated to have been filed before the Metropolitan Magistrate

in a complaint which the plaintiff has filed against the

defendant under Section 138 of the Negotiable Instruments

Act and certified copies have been filed in the present suit.

As regards interest, Section 80 of the Negotiable

Instruments Act which deals with interest on Negotiable

Instruments reads as under:-

Interest when no rate specified.-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.

Explanation- When the party charged is the endorser of an instrument dishonoured by non-payment, he his liable to pay interest only form the time that he receives notice of the dishonour.

8. In Nath Sah vs. Lal Durga Sah, AIR 1936

Allahabad, 160, a Division Bench of Allahabad High Court

held that where no rate of interest is specified in a written

instrument, then, notwithstanding any contract to the

contrary, the interest is to be calculated at the rate of 6%

per annum and the date from which such interest should be

calculated should be the date on which the Principal

amount ought to have been paid. In that case the suit was

based on a promissory note which contained no mention of

any liability to pay interest and the defendant had denied

his liability to pay any interest.

9. In Ghasi Patra vs. Brahma Thati: AIR 1962,

Orissa 35, the pronote payable on demand did not provide

for payment of interest. It was contended before the High

Court that under Section 80 of Negotiable Instruments Act ,

interest could have been allowed only from the date of

demand and not for any earlier period and since no demand

was proved in the case, no interest should have been

allowed from the date of the execution of the pronote till the

date of the suit. It was held that the plaintiff was entitled to

interest under Section 80 of Negotiable Instruments Act

from the date of execution of the pronote. In taking this

view, the High Court followed the decision of Bombay High

Court in Ganpat Tukaram v. Sopana Tukaram, AIR 1928

Bombay 35, where it was held that where a promissory note

is payable on demand, but is silent as to interest, the

interest can be awarded under Section 80 of Negotiable

Instruments Act at 6% per annum from the date of the

promissory note. A Division Bench of Patna High Court in

Bishun Chand v. Audh Bihari Lal, AIR 1917 Pat 533 also

took the view that if the handnote is payable on demand but

does not provide for the payment of interest, it carries

interest at the rate of 6% per annum from the date of

execution of the hand note until the realisation of the debt.

10. In P. Mohan vs. Basavaraju AIR 2003, Karnataka,

213, the suit was based on cheques which when presented

were dishonoured. There was an agreement between the

parties not to pay interest. It was held by Karnataka High

Court that in view of the provisions of Section 80 of

Negotiable Instruments Act, the defendant/appellant would

be entitled to pay interest and that agreement between the

parties not to pay interest would be valid only until the

cheques were dishonoured.

11. 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 allow 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.

The interest at the rate of 18% per annum comes

to Rs.1,20,000/-.

The plaintiff, therefore, is entitled to a decree for

recovery of Rs.55,20,000/- against the defendant.

A decree for Rs.55,20,000/- with costs and

pendente lite and future interest at the rate of 6% per

annum is hereby passed in favour of the plaintiff and

against the defendant. Decree sheet be drawn up

accordingly.

(V.K. JAIN) JUDGE NOVEMBER 02, 2011 VK