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2003 DIGILAW 1157 (MP)

Sujan Mal v. Union of India (UOI)

2003-10-15

S.P.KHARE

body2003
Judgment ( 1. ) THIS is plaintiffs second appeal under Section 100, CPC. The following substantial question of law was formulated at the time of admission by order dated 24-7-1985:-" whether on the facts and in the circumstances of the case, the Court below has erred in not awarding interest from the date of the suit till realisation ?" ( 2. ) THE plaintiff instituted the civil suit for recovery of Rs. 10,000/-against the Railways for non-delivery of sixty bags of grains. The suit was decreed by the Trial Court that decree has not been challenged by the defendants. The Trial Court did not allow any interest on the decretal amount. The First Appellate Court dismissed the appeal of the plaintiff against that part of the order of the Trial Court. First Appellate Court had found that the plaintiff had purchased the grain at Rs. 125/- per bag and his claim for damages at the rate of Rs. 170/- per bag has been decreed. Therefore, the First Appellate Court also declined to grant any interest pendente lite and to the date of realisation of the decretal amount. ( 3. ) DURING the course of hearing of this appeal, the learned Counsel for the appellant has argued that the interest on the decretal amount ought to have been awarded and it is only the rate of interest which was in the discretion of the Court. Reliance has been placed on a Division Bench decision of Calcutta High Court in W. B. Financial Corporation v. Bertram Scott (I) Ltd. , AIR 1983 Calcutta 381, in which it has been held that the Court has no discretion as to whether pendente lite interest should be granted or not. The Court is bound to grant such interest. The Court has discretion only as to the rate of interest. On the other hand it has been argued that use of the word "may" in Section 34 of CPC clearly indicates that the Courts have the discretion to grant or not to grant the interest from the date of the suit to the date of realisation of the amount and in the facts of the present case, the two Courts have found that it is not expedient to grant interest and therefore, this Court can not interfere in the exercise of that discretion. ( 4. ( 4. ) AFTER hearing learned Counsel for both the sides, this Court is of the opinion that on the facts and in the circumstances of the present case, the interest on the decretal amount of Rs. 10,000/has been rightly disallowed. The decree of the Trial Court is silent on the question of pendente lite interest therefore, as per Section 34 (2) of CPC where such a decree is silent with respect to the payment of further interest on such principal sum to the date of the decree or to the date of payment or other earlier date, the Court shall be deemed to have refused such interest. The First Appellate Court has given reason for holding that on the facts of this case interest could not be granted to the plaintiff. The view taken by Calcutta High Court in the above mentioned decision which has been cited by the learned Counsel for the appellant has been subsequently noticed in United Bank of India v. Rashyan Udyog and Ors. , reported in AIR 1990 Calcutta 146, where the Division Bench after making reference to the three decisions of the Supreme Court has held that it is within the discretion of the Court to grant interest or not on the decretal amount. The observations of the Division Bench in Para 8 of this judgment make the legal position crystal clear and these are as under:-" para 8. This catena of Division Bench decisions would have been otherwise binding on us, but we have our doubts as to whether, in view of the decision of the Supreme Court in Soli Pestonji v. Ganga Dhar, AIR 1969 SC 600 and also the earlier decision of the Supreme Court in Mahabir Prasad v. Durga Datta, AIR 1961 SC 990 and also a later decision of the Supreme Court in State of Madhya Pradesh v. Nathabhai Desaibhai, AIR 1972 SC 1545 , which could not be noticed in the first mentioned Calcutta decision and were not also noticed in the other four decisions, the aforesaid Division Bench decisions can still bind us to hold that award of interest is a must. The Supreme Court in Soli Pestonji (supra), while endorsing the Federal Court decision in Jaigobind Singh (AIR 1940 FC 20) (supra), has clearly held that because of the user of the expression "may" in Order 34, R. 11, "the language of the Rule gives a certain amount of discretion to the Court so far as pendente lite and subsequent interest are concerned". Be it noted, discretion so far as award of pendente lite and subsequent interest, and not that discretion only so far as the rate or amount of such interest. The decision in Mahabir Prasad v. Durga Dutta (supra), also appears to be a clear and unequivocal authority for the view that "as regards interest pendente lite until the date of realisation, such interest" (and not merely the rate or amount thereof) "was within the discretion of the Court" and the later decision in Nathabhai Desaibhai (supra) is also to the same effect, namely, "whether interest should be awarded on the principal amount claimed from the date of the suit, was within the discretion of the Court". The award of interest itself is what has been left to the discretion of the Court, and not merely the rate or the amount thereof. " ( 5. ) THIS Court respectfully agrees with the view taken by the Division Bench of Calcutta High Court in the United Banks case referred above which in turn follows the decision of the Federal Court and the Supreme Court. ( 6. ) THIS appeal is dismissed. Costs as incurred.