Karnataka High Court
Sri. N. K. Shivaraja vs Sri. Lokesha on 26 July, 2024
Author: H.P.Sandesh
Bench: H.P.Sandesh
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NC: 2024:KHC:29483
RSA No. 1699 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE H.P.SANDESH
REGULAR SECOND APPEAL NO. 1699 OF 2018 (MON)
BETWEEN:
1. SRI. N.K. SHIVARAJA
SINCE, DECEASED BY HIS LRS
1(a) SMT.HEMALATHA N.S.
D/O LATE N.K.SHIVARAJA
W/O D.R.MANJUNATH
AGED ABOUT 48 YEARS
OCCUPATION: PRIVATE SERVICE
RESIDING AT NO.233, 1ST FLOOR
BHEL LAYOUT, KENCHENAHALLI
RAJARAJESHWARI NAGAR
BENGALURU-560 020.
1(b) SRI HEMANTH KUMAR N.S.
Digitally signed S/O LATE N.K.SHIVARAJA
by DEVIKA M AGED ABOUT 46 YEARS
Location: HIGH OCCUPATION: PRIVATE SERVICE
COURT OF RESIDING AT A1-007
KARNATAKA
VAISHNAVI NORTH 24
6TH CROSS, RANNA ROAD
PAMPA EXTENSION,
VAISHNAVI NORTH 24
HEBBAL KEMPAPURA
BENGALURU NORTH
BENGALURU-560 024.
1(c) SRI BHARATH N.S.
S/O LATE N.K.SHIVARAJA
AGED ABOUT 36 YEARS
OCCUPATION: PRIVATE SERVICE
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NC: 2024:KHC:29483
RSA No. 1699 of 2018
RESIDING AT A1-007
VAISHNAVI NORTH 24
6TH CROSS, RANNA ROAD
PAMPA EXTENSION,
HEBBAL KEMPAPURA
BENGALURU NORTH
BENGALURU-560 024.
[AMENDED VIDE COURT ORDER DATED 10.07.2024]
...APPELLANTS
(BY SRI. KANTHARAJU N.K., ADVOCATE FOR
APPELLANT NO.1[a to c])
AND:
SRI. LOKESHA
S/O B.N. NANJAPPA,
OCCUPATION: BUSINESS,
RESIDING AT
KONADASANAPURA VILLAGE,
BUDIGERE CROSS,
VIRAGONAGAR POST,
BIDARAHALLI HOBLI,
K.R.PURAM TALUK,
BENGALURU EAST TALUK,
BENGALURU-560048.
...RESPONDENT
(BY SRI PRAKASH M.H., ADVOCATE)
THIS RSA IS FILED UNDER SECTION 100 OF CPC,
AGAINST THE JUDGEMENT AND DECREE DATED 16.04.2018
PASSED IN R.A.NO.41/2015 ON THE FILE OF THE SENIOR
CIVIL JUDGE, NELAMANGALA, BENGALURU RURAL DISTRICT,
PARTLY ALLOWING THE APPEAL AND SETTING ASIDE THE
JUDGEMENT AND DECREE DTD 01.06.2015 PASSED IN
O.S.NO.103/201O ON THE FILE OF THE PRL. CIVIL JUDGE AND
JMFC, NELAMANGALA AND ETC.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE H.P.SANDESH
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RSA No. 1699 of 2018
ORAL JUDGMENT
This matter is listed for admission. Heard the
learned counsel appearing for the respective parties.
2. In the case on hand, it is not in dispute with
regard to agreement of sale and also payment of earnest
money of Rs.5,00,000/-. The suit is filed for the relief of
recovery of earnest money. After entering into the
agreement of sale, a suit was filed in O.S.No.91/2008 for
the relief of partition within 32 days from the date of
execution of the sale agreement. Hence, he has filed the
suit only for recovery of money. The contention of the
respondent that they have not filed suit for specific
performance and only filed the suit for the recovery of
money. But the fact that O.S.No.91/2008 was filed before
the Trial Court for the relief of partition and the same is
not in dispute by the family members of the respondent
and the same is pending for consideration. The Trial Court
also assigned the reasons taking into note of the
admission on the part of DW1 and also taken note of the
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conduct and decreed the suit of the plaintiff and directed
the defendant to refund the advance money of
Rs.5,00,000/- with interest of 18% per annum. The said
judgment and decree was challenged before the First
Appellate Court in R.A.No.41/2015 by the defendant
stating that awarding interest at 18% is exorbitant.
3. The First Appellate Court taking note of Section
34 of CPC, discussion was made that where the liability in
relation to the sum so adjudged had arisen out of a
commercial transaction, the rate of such further interest
may exceed 6%, per annum, but shall not exceed the
contractual rate of interest or where there is no
contractual rate, the rate at which moneys are lent or
advanced by nationalized banks in relation to commercial
transactions. The explanation attached to said Section
refers that a transaction is a commercial transaction, if it
is connected with the industry, trade or business of the
party incurring the liability. Taking note of Section 34 of
CPC, the First Appellate Court discussed that in the
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present case, it is not a commercial transaction and hence,
it is best and appropriate to award 6% interest on the sum
adjudged. Hence, the present appeal is filed before this
Court by the plaintiff against the reduction of interest to
6% from 18%.
4. The main contention of the learned counsel
appearing for the appellant that First Appellate Court
reduced the interest to the tune of 6% and the same is
erroneous and the First Appellate Court also committed an
error in coming to the conclusion that same is not a
commercial transaction and awarding of simple interest in
a case of recovery of money is erroneous. Hence, it
requires interference.
5. The learned counsel appearing for the
respondent would vehemently contend that when the suit
is not field for the relief of specific performance and only
the suit is filed for recovery of money and no dispute with
regard to execution of sale agreement and receipt of
earnest money of Rs.5,00,000/-. The First Appellate Court
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taking into note of Section 34 of CPC rightly comes to the
conclusion that it is not a commercial transaction and
hence, reduced the interest to 6%.
6. Having heard the learned counsel appearing for
the respective parties and also on perusal of the material
available on record, it discloses that admittedly, there was
a sale transaction and an amount of Rs.5,00,000/- was
paid as earnest money on 18.01.2008. It is not in dispute
that the suit was also filed in O.S.No.91/2008 for partition
within 32 days from entering into the sale agreement by
his uncle against Vishwanatha, Girisha, Lokesha and
Smt.Chandrakala and the same is also pending for
consideration and the said fact is also admitted by the
defendant. It is not on the default of the plaintiff
transaction was not taken place and due to filing of suit by
the uncle, sale transaction was not taken place. The Trial
Court assigned the reason while awarding the interest but
the First Appellate Court reduced the same invoking
Section 34 of CPC in coming to the conclusion that it is not
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a commercial transaction. But it is a sale transaction and
the same has not been taken note of by the First Appellate
Court and hence, the First Appellate Court committed an
error. No doubt, there is no any contractual rate of
interest. When, sale transaction was taken place and
received the earnest money of Rs.5,00,000/- and sale did
not take place, same ought to have been taken note of by
the First Appellate Court and awarding 6% interest in
coming to the conclusion that this is not a commercial
transaction is erroneous. Hence, instead of admitting the
matter, having taken note of the said fact into
consideration, it is appropriate to enhance the rate of
interest to 12% instead of 6%. Hence, the judgment and
decree dated 16.04.2018 passed in R.A.No.41/2015 by the
First Appellate Court is modified awarding the interest at
the rate of 12% instead of 6% per annum. Accordingly,
the second appeal is disposed of.
Sd/-
(H.P.SANDESH)
JUDGE
SN
