Delhi High Court
United India Insurance Co. Ltd. vs M/S Indigenous Poultry Breeding & ... on 8 May, 2012
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.186 /2009
% 8th May, 2012
UNITED INDIA INSURANCE CO. LTD. ...... Appellant
Through: Mr. Sameer Nandwani, Advocate for
Mr. K.L. Nandwani, Advocate.
VERSUS
M/S INDIGENOUS POULTRY BREEDING & RESEARCH FARM &
ORS. ...... Respondents
Through: Mr. P.N. Bhardwaj, Advocate with
Mr. Ashutosh Bhardwaj, Advocate for
respondent No.1.
Dr. N.K. Khetrapal, Advocate for
respondent Nos.2 and 3.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal filed
under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the
impugned judgment of the trial Court dated 30.8.2008 which has decreed the
suit for recovery of money filed by the respondent No.1/plaintiff for
insurance moneys as also other losses suffered by the respondent
No.1/plaintiff because the insurance company failed to pay the amounts
which were due under the subject insurance policy. I may state that there is
only a limited issue to be decided in this appeal as to whether the interest has
to be granted @ 12% per annum simple or compounded. This is stated in
the order of admission dated 22.9.2011 passed by a learned Single Judge of
this Court.
2. On the aspect of interest, the trial Court has stated in para 30 of
the impugned judgment that plaintiff is awarded interest @ 12% per annum
with quarterly rests from 1.1.1982. Though it is not too clear that the
interest is payable till payment.
3. A reference to the impugned judgment shows that there is no
reasoning at all given for granting interest with quarterly rests except a
cryptic one line sentence that interest be granted at the rate of 12% per
annum with quarterly rests from 1.1.1982.
4. The Supreme Court in the recent judgments reported as
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 &
State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd (2009) 3 Arb.
LR 140 (SC) has held that in the changed economic scenario where there
has been a fall in the rates of interest, Courts must not grant high rates of
interest moreso when the interest is granted for a long period of time
especially because of long pendency of litigation. In the present case,
interest @ 12% per annum with quarterly rests is granted for a period of as
many as 26 years i.e. w.e.f. 1982 till passing of the judgment in 2008 and in
fact till the appellant pays under the impugned judgment and decree.
5. Considering the fact that Supreme Court has granted interest
varying between 6% to 9% per annum simple, I do not find that rate of
interest @ 12% per annum is in any manner less for compensating the
respondent No.1/plaintiff. Since the rate of interest is already high @ 12%
per annum, I do not find any necessity that to such high rate of interest, the
respondent No.1/plaintiff be granted compounded interest with quarterly
rests. This is in accord with ratio of the judgments of the Supreme Court
referred to above.
6. During the course of arguments, I repeatedly put queries to the
counsel for the respondent No.1/plaintiff as to whether any documents have
been filed by the respondent No.1/plaintiff to show that in fact interest with
quarterly rests has actually been paid under any decree passed by the Court
to the bankers of respondent No.1/plaintiff, however, except relying upon
the documents being the plaint and the statement of account of the bank, no
documents were filed in the trial Court to show that interest in fact has been
actually paid by the respondent No.1/plaintiff to its bank at quarterly rests.
7. In view of the above, appeal is accepted by setting aside that
portion of the impugned judgment dated 30.8.2008 which granted interest @
12% per annum with quarterly rests. The interest which will be payable will
be @ 12% per annum simple qua all the defendants. Parties are left to bear
their own costs. Decree sheet be prepared. Trial Court record be sent back.
VALMIKI J. MEHTA, J
MAY 08, 2012
Ne
