Madras High Court
M/S.Dhanalakshmi Papers & Boards ... vs S.Sankaravel on 20 April, 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated : 20.04.2021
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
SA(MD)No.599 of 2011
M/s.Dhanalakshmi Papers & Boards Company,
through its Partner Mrs.S.Visalakshi
... Plaintiff/Respondent/Appellant
Vs.
S.Sankaravel ...Defendant/Appellant/Respondent
Prayer: Second Appeal is filed under Section 100 of Civil Procedure
Code, to set aside the judgment and decree made in A.S No.8 of 2008
dated 18.01.2010 on the file of the Sub Court, Sivakasi reversing the
judgment and decree made in O.S No.151 of 2004 dated 25.10.2007 on
the file of the District Musnif Court, Sivakasi.
For Appellant : Mr.R.Murali
For Respondent : Mr.R.R.Kannan
for Mr.Balagangatharan
https://www.mhc.tn.gov.in/judis/
JUDGEMENT
The plaintiff in O.S No.151 of 2004 on the file of the District
Munsif Court, Sivakasi is the appellant in this second appeal. The case
of the plaintiff is that they are a registered firm dealing in paper and
boards. The defendant would purchase goods from the plaintiff firm on
credit basis. Since 1995, the defendant had transactions with the
plaintiff. The defendant would take the goods on condition that he
would pay the value of the goods together with interest at the rate of
30%. As per the accounts maintained by the plaintiff as on
30.06.2003, the defendant owed to pay a sum of Rs.66,746/-. The
plaintiff issued Ex.A14 notice calling upon the defendant to pay the
said amount with interest. Since the defendant did not come forward
to clear his liability, the plaintiff filed O.S No.206 of 2003 before the
Sub Court, (later transferred to District Munsif Court, Sivakasi and
renumbered as O.S No.151 of 2004).
2.The manager of the plaintiff firm himself examined as PW.1 and
Exs.A1 to A42 were marked. The defendant examined himself as DW.1
and marked Exs.B1 to B4. The learned trial Judge by judgment and
decree dated 25.10.2007, partly decreed the suit and directed the
defendant to pay the suit claim of Rs.74,044/- with interest at the rate
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of 18% on the principal amount of Rs.66,746/- from the date of suit till
the date of decree and at the rate of 6% on the principal amount from
the date of decree till the date of payment. Aggrieved by the same, the
defendant filed A.S No.8 of 2008 before the Sub Court, Sivakasi. The
appellate Judge partly allowed the appeal and modified the trial court
decree and directed the defendant to pay a sum of Rs.32,290/- to the
plaintiff with interest at the rate of 30% per annum on the sum of Rs.
18,663/- from the date of suit till the date of realization. Challenging
the same, the plaintiff filed this Second Appeal. The Second Appeal was
admitted on the following substantial questions of law.
“1.Whether the judgment and decree of the lower
appellate court is sustainable in reversing the well
considered judgment and decree of the trial court without
reversing the findings of the trial court.
2.Whether the judgment and decree of the lower
appellate court in reversing the trial court judgment and
decree is sustainable in view of Ex.A10 to A13 debit notes
accepted by the defendant ? and
3.Whether the judgment and decree of the lower
appellate court in modifying the principal amount without
any evidence is sustainable?”
3.Heard the learned counsel on either side.
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4.The learned counsel for the appellant would point out that
Exs.B1 to B4 were the debit notes issued by the plaintiff. In fact, those
very same notices have been marked on the side of the plaintiff also.
The trade practice was to charge 30% on the deferred payment. In fact,
the defendant had commercial transactions with the plaintiff right from
the year 1995. The defendant had taken the goods by agreeing to pay
30% interest on such deferred payment on the goods purchased by
him. It is true that at one point of time, the liability of the defendant
was quantified at Rs.18,663/-. But, on account of the delay on his
part, due to accumulation of interest, the liability mounted to Rs.
58,102/- on 30.12.2002 as evident by Ex.B4. The suit came to be laid
in the middle of 2003. By then, the liability of the defendant had
mounted further to Rs.74,044/-. The counsel for the appellant pointed
out that the lower appellate court erroneously came to the conclusion
that the principal amount will have to remain static. The
accumulation of interest on account of non-payment was not taken
note of by the first appellate court. He therefore wanted this Court to
answer the substantial questions of law in favour of the appellant and
set aside the judgment of the first appellate court and restore the
judgment of the trial court.
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5.Per contra, the learned counsel for the respondent submitted
that the impugned judgment passed by the first appellate court does
not call for any interference. He also would point out that charging
30% interest would definitely shock the conscience of any person and it
on the very face of it amounts to charging of exorbitant interest. In
fact, he went to the extent of submitting that 30% interest awarded by
the court below on the principal amount should also be interfered with
even though he had not filed any cross appeal.
6.I carefully considered the rival contentions and went through
the evidence on record. The issue on hand pertains to computation of
the rate of interest. The basic facts are not in dispute. The respondent
had purchased goods from the appellant firm by agreeing to pay 30%
interest on the deferred payment on the value of the goods. Ex.B4 has
been marked by none other than the respondent himself. Section 34 of
Civil Procedure Code reads as follows :
“(1)Where and in so far as a decree is for the
payment of money, the Court, may, in the decree, order
interest at such rate as the Court deems reasonable to be
paid on the principal sum adjudged, from the date of the
suit to the date of the decree, in addition to any interest
adjudged on such principal sum for any period prior to
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the institution of the suit, with further interest at such
rate not exceeding six per cent per annum as the Court
deems reasonable on such principal sum, from the date of
the decree to the date of payment, or to such earlier date
as the Court thinks fit:
Provided 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 six per cent, 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 nationalised banks
in relation to commercial transactions.”
7.The court will have the power to fix reasonable rate of interest
only from the date of decree. Otherwise, it will have to go by the
contractual rate. In the case hand, though there is no express
agreement between the parties from the evidence marked on either
side, one can come the safe conclusion that the contractual rate was
30%. The first appellate court erred in proceeding on the premise that
the principal amount would remain fixed and static. Therefore, the
judgment of the first appellate court is set aside and the judgment of
the trial court is restored.
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8.The Second Appeal is allowed. No costs.
20.04.2021
Index : Yes / No
Internet : Yes/ No
skm
Note : In view of the present lock down owing to COVID-19
pandemic, a web copy of the order may be utilized for official
purposes, but, ensuring that the copy of the order that is
presented is the correct copy, shall be the responsibility of the
advocate/litigant concerned.
To
1.The Sub Judge, Sivakasi.
2.The District Musnif, Sivakasi.
Copy to :
The Record Keeper, V.R.Section,
Madurai Bench of the Madras High Court, Madurai.
https://www.mhc.tn.gov.in/judis/
G.R.SWAMINATHAN, J.
skm
SA(MD)No.599 of 2011
20.04.2021
https://www.mhc.tn.gov.in/judis/
