Karnataka High Court
Honnamma vs M/S Janardhan Corporaton on 11 July, 2025
Author: Jyoti Mulimani
Bench: Jyoti Mulimani
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RFA No. 1486 of 2016
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MS. JUSTICE JYOTI MULIMANI
REGULAR FIRST APPEAL NO. 1486 OF 2016 (RES)
BETWEEN:
1. HONNAMMA
W/O LATE J.SHIVARAM,
AGED ABOUT 70 YEARS,
2. S.K.GANDHI
S/O LATE J.SHIVARAM,
AGED ABOUT 40 YEARS,
3. INDIRA
D/O LATE J.SHIVARAM,
AGED ABOUT 38 YEARS,
4. BHARATHI
D/O LATE J.SHIVARAM,
AGED ABOUT 38 YEARS,
Digitally signed by
THEJAS KUMAR N 5. CHANDRAKALA
Location: HIGH D/O LATE J.SHIVARAM,
COURT OF AGED ABOUT 34 YEARS,
KARNATAKA
6. JAYANTHI
D/O LATE J.SHIVARAM,
AGED ABOUT 34 YEARS,
ALL ARE R/AT NO.1, 15TH CROSS,
VYALIKAVAL, BANGALORE-560 003.
...APPELLANTS
(BY SRI. AMBAJI RAO NAJRE., ADVOCATE)
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RFA No. 1486 of 2016
HC-KAR
AND:
M/S. JANARDHAN CORPORATON
NO.2, JANARDHAN TOWERS,
RESIDENCY ROAD, BANGALORE-560 025.
REPRESENTED BY ITS PARTNER.
...RESPONDENT
(BY SRI. B.E.SHREEDHAR., ADVOCATE)
THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION
96 OF THE CODE OF CIVIL PROCEDURE.
THIS REGULAR FIRST APPEAL IS LISTED FOR FINAL
HEARING, THIS DAY, THE JUDGMENT WAS DELIVERED AS
UNDER:
ORAL JUDGMENT
Sri.Ambaji Rao Najre, counsel for the appellants, has
appeared through video conferencing.
Sri.B.E.Shreedhar., counsel for the respondent, has
appeared in person.
2. This is an appeal from the Court of XXXI Addl. City
Civil and Sessions Judge (CCH-14), Bengaluru City.
3. For convenience's sake, the parties are referred to
as per their status and rankings before the Trial Court.
4. The short facts are these:
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Honnamma and others, the plaintiffs, initiated a suit
against M/s.Janardhan Corporation in O.S.No.5087/2001
seeking Dividend Capital and other consequential reliefs. The
Trial Court vide Judgment and Decree dated 22.04.2009 passed
the preliminary decree, and the same has become final as no
appeal or revision has been filed by the defendant.
Subsequently, the plaintiffs filed FDP in No.159/2010 on the file
of XXXI Addl. City Civil and Sessions Judge, Bengaluru (CCH-
14) to execute the preliminary decree.
The FDP Court, vide order dated 17.08.2016, partly
allowed the petition, holding that the plaintiffs are entitled to
the share capital of Rs.10,000/- and 1% share profit of the
deceased partner Sri.J.Shivaram to the extent of Rs.2,91,362/-
from the defendant. Further, it was also held that the plaintiffs/
petitioners were entitled to the simple interest @ 6% p.a from
01.01.1985 upon the 1% share profit of deceased partner
Sri.J.Shivaram based on the year-wise statement furnished by
the Joint Court Commissioners at Ex.P.1 till realization. Hence,
the plaintiffs have filed the present appeal under Section 96 of
CPC questioning the award of interest @ 6% per annum from
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the date of 01.01.1985 upon 1% share profit of the deceased
partner, Sri.J.Shivaram.
Counsel Sri.Ambaji Rao Najre., in presenting his
arguments, submits that the transaction was a commercial one
and the Company has made a profit. Hence, the appellants are
entitled to interest @ 18% per annum. He argued by saying
that the appellants are also entitled to Compound Interest.
By way of reply to these contentions, counsel
Sri.B.E.Shreedhar., submits that this is not a commercial
transaction. This is a case of partners and hence, the provisions
of the Indian Partnership Act, 1932 are applicable. He argued
by saying that under Section 37 of the Act, the rate
enumerated is 6% per annum. Hence, the FDP Court is justified
in awarding 6% interest. Therefore, he submits that the
appellants have not made any grounds to claim 18% interest
and also compound interest. Accordingly, he submits that the
appeal may be dismissed.
5. Heard the arguments and perused the appeal
papers and the records with care.
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6. The point that would arise for consideration is
whether the award of interest @ 6% per annum is just and
proper.
7. The issue falls within a narrow compass and relates
to the award of interest by the FDP Court. The appellants'
grievance is about the award of interest @ 6%. The appellants
claim that they are entitled to interest @ 18% per annum. The
award of interest in legal cases is generally a discretionary
power of the Court. This means that Courts have the authority
to decide whether or not to award interest, as well as the rate
and period for which it is awarded. However, this discretion is
not unfettered and is often guided by principles of fairness,
contractual agreements and relevant statutes.
A perusal of the entire material evidence on record
depicts that this is a case of partners, and deceased
Sri.J.Shivaram was an outgoing partner. This is not a
commercial transaction for the appellants to claim interest @
18% per annum. Moreover, there is nothing on record to show
that the parties agreed on a contractual rate of interest. Hence,
the discretion vests in the Court to award the interest. The
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contention regarding the award of Compound Interest cannot
be accorded for the simple reason that, in the absence of a
specific statutory provision or contractual agreement,
compound interest or interest on interest cannot be granted.
The FDP Court extenso referred to the material on record and
justified in awarding the simple interest @ 6% per annum. I
find no grounds to interfere with the order of the FDP Court.
The appeal is liable to be rejected.
8. Resultantly, the Regular First Appeal is rejected.
Sd/-
(JYOTI MULIMANI)
JUDGE
MRP
