Delhi High Court
M/S Associated Swichgear & ... vs M/S Hind Electrician on 30 October, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 638/2006
% 30th October, 2018
M/S ASSOCIATED SWICHGEAR & PROJECTS LTD
...... Appellant
Through: Mr. Shiv Khurana, Adv.
versus
M/S HIND ELECTRICIAN
..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This Regular First Appeal under Section 96 of the Code of
Civil Procedure, 1908 (CPC), is filed by the defendant in the suit
impugning the Judgment of the Trial Court dated 20.07.2006
whereby the trial court has decreed the suit for a sum of Rs.
3,45,004.12 along with interest at 12% per annum from February
1995 till the institution of the suit and thereafter at 8% per annum
pendente lite and future till realisation of the decretal amount. The
suit amount was claimed on account of supply of cables by the
respondent/plaintiff to the appellant/defendant.
2. The learned counsel for the appellant/defendant only argues
the appeal for reduction of the high rate of interest granted by the
impugned judgment at 12% per annum and 8% per annum pendente
lite, by placing reliance on the judgments of the Hon'ble Supreme
Court which hold that since the interest regime has come down,
courts must not grant a 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 Reddy,
2007 (2) SCC 720 & State of Rajasthan v. Ferro Concrete
Construction Pvt. Ltd (2009) 12 SCC 1.
3. It is also argued that this Court has ample power under
Section 34 CPC to grant reasonable rate of interest pendente lite
and in the facts of the present case, taken along with the language of
Section 34 CPC, interest at 6% per annum should suffice because
the appellant has already deposited the principal amount of Rs.
3,45,000/- in this Court in terms of orders passed in this RFA.
4. In my opinion, the argument urged on behalf of the counsel
for the appellant/defendant is justified, and which is more so
because the notice relied upon by the respondent/plaintiff is dated
20.01.1998 but the suit itself was filed immediately thereafter on
24.01.1998 without giving opportunity to the appellant/defendant to
respond to the notice. In fact where rates of interest are very high,
and even if a contract provides for a high rate of interest, then
courts are entitled to hold the high contractual rate of interest
against public policy vide Pt. Munshi Associates (P) Ltd. v. DDA,
2010 Arb LR, 284.
5. In view of the aforesaid discussion, while the impugned
judgment of the trial court is sustained, the rate of interest is
modified and reduced by granting 6% per annum simple from the
date of the notice served by the respondent/plaintiff on the
appellant/defendant being 20.01.1998 and thereafter till realisation.
6. Therefore, this appeal is allowed to the limited extent and the
suit of the respondent/plaintiff will be decreed for a sum of Rs.
3,45,000/- along with interest at 6% per annum simple from
20.01.1998 till the filing of the suit and the same rate of interest of
6% per annum simple pendente lite and future till deposit of the
principal amount of Rs. 3,45,000/- in this Court.
7. The balance amount now be positively deposited by the
appellant/defendant within a period of three months from today in
this Court and in case the balance amount is not deposited within
three months from today, then the impugned judgment and decree
will stand as it is.
8. The appeal is accordingly partially allowed and disposed of
in terms of the aforesaid judgment. The entire amount deposited in
this court, alongwith the accrued interest, be released to the
respondent/plaintiff on the respondent/plaintiff filing such an
application.
OCTOBER 30, 2018 VALMIKI J. MEHTA, J
aruna
