Madras High Court
Shirley Stanly vs P. Selvakumar on 8 March, 2022
S.A.No.876 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.03.2022
CORAM
THE HONOURABLE MR. JUSTICE N. ANAND VENKATESH
Second Appeal No.876 of 2013
and MP No.1 of 2013
Shirley Stanly ... Appellant
Vs.
P. Selvakumar ... Respondent
Prayer: Second Appeal filed under Section 100 of the Code of Civil
Procedure, to set aside the judgment and decree dated 18.09.2012 made in
AS No.10 of 2012 on the file of Principal District Judge, Namakkal
confirming the decree and judgment dated 28.10.2011 made by the
Subordinate Judge, Namakkal in OS No.386 of 2000.
For Appellant : Mr.S.Patrick
For Respondents : Mr.T.Dhanayakumar
JUDGMENT
The first defendant is the appellant in the Second Appeal
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S.A.No.876 of 2013
2. The respondent/plaintiff filed a suit claiming for the relief of
recovery of money along with interest.
3. The case of the plaintiff is that the first defendant and her
husband borrowed a sum of Rs.1,50,000/- from the plaintiff on 20.08.1997
and executed a promissory note which was marked as Ex.A1. The further
case of the plaintiff is that they agreed to pay interest at the rate of 18%
per annum. The grievance of the plaintiff is that the first defendant and her
husband failed to repay any amount in spite of repeated demands and
requests. The husband of the first defendant died 2½ years before the
institution of the suit and even thereafter, the defendants failed to repay
back the amount that was borrowed for the purpose of meeting the family
expenses. Hence the suit came to be filed after issuing a pre-suit notice,
for recovery of money.
4. The first defendant filed a written statement and denied the very
borrowal of money from the plaintiff. According to the first defendant,
she and her husband were in contact with one Muthusami, who is into
money lending business. The husband of the first defendant borrowed
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S.A.No.876 of 2013
money from the said Muthusami and that point of time, he had put his
signatures in certain documents and the same has been misused by the
plaintiff. The first defendant also took a stand that the suit promissory
note is a forged and fabricated document. Therefore, the defendants
sought for the dismissal of the suit.
5. Both the Courts below after appreciating the oral and
documentary evidence and on considering the facts and circumstances of
the case, concurrently held in favour of the plaintiff and decreed the suit
and directed the defendants to pay a sum of Rs.2,28,252/- along with
interest at the rate of 18% on the principal amount of Rs.1,50,000/- up to
the date of decree and thereafter at the rate of 6% till the date of actual
payment of the amount to the plaintiff. Aggrieved by the same, the first
defendant has filed the present Second Appeal before this Court.
6. This Court admitted the Second Appeal by framing the following
substantial question of law:
Whether both the Courts below were right in
awarding an exorbitant interest of 18% interest on the
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S.A.No.876 of 2013
principal amount when admittedly the transaction
between the parties was not a commercial transaction?
7. Heard Mr.S.Patrick, learned counsel appearing for the appellant
and Mr.T.Dhanyakumar, learned counsel appearing for the respondent.
This Court also carefully perused the materials available on record and the
findings of both the Courts below.
8. Both the Courts below have taken into consideration Exs.A1 to
A7 and the oral evidence of P.W.1 and P.W.2. Both the Courts also took
into consideration an Expert Opinion that was marked as Ex.C1, since the
defendants had taken a plea that the promissory note was a forged and
fabricated document. On assessing the evidence, both the Courts found
that the plaintiff has made out a case and the defence that was taken by the
defendants was not established. This Court does not find any perversity on
such factual findings given by both the Courts below. Therefore, insofar as
the liability and the promissory note is concerned, there is no ground to
interfere with the judgments and decrees of both the Courts below.
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S.A.No.876 of 2013
9. The only issue that arises for consideration in the present case is
with regard to the rate of interest that was granted by both the Courts
below. Both the Courts below went by the terms of the Promissory Note
marked as Ex.A1 and had granted 18% interest on the principal amount till
the date of decree. It was contended that the interest that was awarded by
both the Courts is exorbitant and the same requires the interference of this
Court.
10. In the present case, even as per the case that was put forth by the
plaintiff, the amount was borrowed to meet family expenses. Therefore, it
is clear that the transaction in question is not a commercial transaction.
Insofar as the payment of interest is concerned, Section 34 of the Code of
Civil Procedure, specifically provides that the Court can order interest at
such rate as the Court deems reasonable to be paid on the principal sum
from the date of the suit till the date of the decree. The proviso to the said
Section provides that while determining the interest, the Court should take
into consideration as to whether the transaction in question is a non-
commercial transaction or a commercial transaction. If in case the
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S.A.No.876 of 2013
transaction is a commercial transaction, the Court can award interest
exceeding 6% per annum, but shall not exceed the contractual rate of
interest. If there is no contractual rate of interest, then the Court has to
take into consideration the rate at which moneys are lent or advanced by
the Nationalised Banks in relation to a commercial transaction.
11. In the considered view of this Court, both the Courts below
should have taken into consideration this crucial aspect while awarding
interest payable by the defendants on the principal amount. This Court is
therefore inclined to interfere in the Second Appeal only insofar as the
interest portion is concerned that is payable till the date of decree. The
substantial question of law is answered accordingly.
12. In view of the above discussion, this Court is of the considered
opinion that the interest that was awarded by the Trial Court at the rate of
18% from the date of filing of the suit till the date of decree, should be
modified and the same is reduced to 9%.
13. In the result, the Second Appeal is partly allowed and the
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S.A.No.876 of 2013
decree that was passed by the Trial Court and confirmed by the Appellate
Court is modified to the extent that the defendant shall pay interest at the
rate of 9% from the date of filing of the suit till the date of decree on the
principal sum of Rs.1,50,000/- and shall pay further interest at the rate of
6% from the date of decree till the date of realisation of the amount. It is
seen from the records that this Court passed an order of interim stay on
26.09.2013 with a condition that the petitioner should deposit a sum of
Rs.2,50,000/- to the credit of the suit on or before 29.11.2013 and it is
brought to the notice of this Court that the condition has been complied
with and the amount was deposited before the Trial Court to the credit of
the suit on 20.11.2013. This deposit shall be taken into consideration
while arriving at the final amount that is due and payable by the
defendants. Considering the facts and circumstances of the case, there
shall be no order as to costs. Consequently, the connected miscellaneous
petition is closed.
08.03.2022
Index : Yes/No
Internet : Yes/No
Speaking Order / Non Speaking Order
jv
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S.A.No.876 of 2013
To
1.The Principal District Judge,
Namakkal.
2.The Subordinate Judge,
Namakkal.
3. The Section Officer
VR Section,
High Court Madras.
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S.A.No.876 of 2013
N. ANAND VENKATESH, J.
jv
Second Appeal No.876 of 2013
and MP No.1 of 2013
08.03.2022
https://www.mhc.tn.gov.in/judis
