Delhi High Court
Rajender Jaina & Another vs Kali Das Dutt on 29 November, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 652/2018 and C.M. No.32213/2018(stay)
% 29th November, 2018
RAJENDER JAINA & ANOTHER
..... Appellants
Through: Mr. Rajesh Aggarwal,
Advocate (M. No.9810179438).
versus
KALI DAS DUTT
..... Respondent
Through: Mr. S.K. Bhaduri, Advocate.
(M. No.9810439195).
CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. In this appeal, a limited notice was issued on 10.08.2018
confining the issue only to the reduction of the interest on
compounded basis granted in favour of the respondent/plaintiff and
against the appellants/defendants. This order dated 10.08.2018 reads
as under:-
"CM No. 32214/2018 (Exemption)
1. Exemption allowed subject to just exceptions.
CM stands disposed of.
CM No. 32215/2018 (delay in re-filing)
2. For the reasons stated in the application, delay in re-filing is
condoned, subject to just exceptions.
CM stands disposed of.
RFA No. 652/2018 & CM No. 32213/2018 (stay)
3. Learned counsel for the appellants presses this appeal only with
respect to change of the rate of interest granted from 9% per annum
compounded yearly to 9% per annum simple in view of the catena of
judgments of the Supreme Court that in view of the consistent fall in
the interest regime, courts should not award high rate of interest.
These judgments of the Supreme Court which are relied upon 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 & State of Rajasthan Vs.
Ferro Concrete Construction Pvt. Ltd (2009) 3 Arb. LR 140 (SC)
4. Limited to the aforesaid aspect, notice of this appeal be issued to
the respondent on filing of process fee, both in the ordinary method
as well as by registered AD post, returnable on 29th November, 2018.
5. Subject to the appellants depositing an amount of Rs.1,19,925/-
in this Court alongwith interest at 9% per annum simple from
24.10.1986 within a period of two weeks from today, there shall be
stay of the operation of the impugned judgment dated 27.2.2018
passed by Sh. Vishal Singh, ADJ-06, Central District, Tis Hazari
Courts, Delhi in CS No. 10097/2016 titled as Shri Kali Das Dutt Vs.
Sh. Rajender Jaina & Anr.
Dasti."
2. It is not disputed on behalf of the respondent/plaintiff that
there is no contract for payment of compound interest. In law,
compound interest can only be granted, which results in increasing
interest every year, only if there is a contact to pay such compound
interest. Once, admittedly, there is no contract to pay the compound
interest, the trial court has committed a serious error in granting
compounded rate of interest. The judgments of the Supreme Court
directing that the rates of interest should not be high, have been
referred to in the Order dated 10.08.2018 of this Court which has been
reproduced above.
3. In view of the aforesaid discussion, this appeal is allowed
by directing that rate of interest granted by the trial court will remain
as it is at 9% per annum, however, the rate of interest payable will be
at 9% per annum simple and not 9% per annum compounded yearly.
4. The appeal is allowed and disposed of, as stated above.
NOVEMBER 29, 2018 VALMIKI J. MEHTA, J
Ne
