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2003 DIGILAW 1328 (MP)

Sagarmal Bhandari v. Rajendra Kumar

2003-12-05

A.K.AWASTHY

body2003
Judgment ( 1. ) APPELLANT/plaintiff has filed this appeal under Section 96 of the CPC against the judgment and decree dated 17. 9. 93 in Civil Suit No. 1-B/93 passed by learned 1st Additional District Judge, Dhar Camp Court at Sardarpur wherein the appellant plaintiff is deprived of the agreed rate of interest on the principal sum prior to the filing of the suit. ( 2. ) THE appellant/plaintiff has given the amount of Rs. 30,000/- to the respondent defendant on 9. 2. 92 on the interest Rs. 2% per month and the defendant has executed the pronote in favour of the plaintiff. That the amount of Rs. 30,000/- was paid by the defendant after filing of the suit by the Bank Draft dated 20. 7. 93 to the plaintiff. The learned Trial Court has provided the interest @ 6% per annum to the appellant plaintiff from 9. 2. 93 and the cost of the Suit was not provided to the appellant plaintiff. ( 3. ) IT is contended by the learned Counsel for the appellant that the learned Trial Court has erred in refusing to provide the interest to the appellant plaintiff at the agreed rate of interest of 18% per annum from the date of the execution of the pronote till the filing of the suit on 25. 2. 93. It is further contended by the learned Counsel for the appellant that the learned Trial Court has also erred in refusing to provide the cost of the suit to the appellant plaintiff. ( 4. ) THE Court should normally provide the plaintiff the pre-suit interest on the principal sum adjudged as agreed between them unless, the same is barred by usury laws or if the rate of interest is penal in nature or if the Courts thinks that it is excessive, Unless, the aforesaid three conditions exist as a rule the pre-suit interest should be provided by the Court at the rate agreed between the parties. Consequently, the learned Court has erred in reducing the rate of interest from 18% to 6% per annum. The mater is dealt in detail in following case. ( 5. ) IN the case of Central Bank of India v. Ravindra and Ors. Consequently, the learned Court has erred in reducing the rate of interest from 18% to 6% per annum. The mater is dealt in detail in following case. ( 5. ) IN the case of Central Bank of India v. Ravindra and Ors. , 2001 (II) MPJR 392 at para 40 the following observations were made by the Honble Supreme Court: "mulla on the Code of Civil Procedure (1995 Edition) sets out three divisions of interest as dealt in Section 34 of the CPC. The division is according to the period for which interest is allowed by the Court, namely (1) interest accured due prior to the institution of the suit on the principal sum adjudged; (2) additional interest on the principal sum adjudged, from the date of the suit to the date of the decree, at such rate as the Court deems reasonable; (3) further interest on the principal sum adjudged, from the date of the decree to the date of the payment or to such earlier date as the Court thinks fit, at a rate not exceeding 6 per cent per annum. Popularly the three interests are called, pre-suit interest, interest pendente lite and interest post-decree or future interest. Interest for the period anterior to institution of suit is not a matter of procedure, interest pendente lite is not a matter of substantive law [see, Secretary Irrigation Department, Government of Orissa and Ors. v. G. C. Roy, (1992) 1 SCC 508 , Pr. 44-v] pre-suit interest is referable to substantive law and can be sub-divided into two sub-heads, (i) where there is a stipulation for the payment of interest at a fixed rate, and (ii) where there is no such stipulation. If there is a stipulation for the rate of interest, the Court must allow that rate upto the date of the suit subject to three exceptions, (i) any provision of law applicable to money lending transactions, or usury laws or any other debt law governing the parties and having an overriding effect on any stipulation for payment of interest voluntarily entered into between the parties, (ii) if the rate is penal, the Court must award at such rate as it deems reasonable, (iii) even if the rate is not penal the Court may reduce it if the interest is excessive and the transaction was substantially unfair. If there is no express stipulation for payment of interest the plaintiff is not entitled to interest except on proof of mercantile usage, statutory right to interest or an implied agreement, Interest from the date of suit to date of decree is in the discretion of the Court. Interest from the date of the decree to the date of payment or any other earlier date appointed by the Court is again in the discretion of the Court to award or not to award as also the rate of which to award. " ( 6. ) THE appellant plaintiff has failed to prove that the notice sent prior to the institution of the suit was served on the respondent defendant. The respondent defendant has deposited the principal sum which is after filing of the suit. In these circumstances, learned Trial Court has not committed any error in depriving the appellant plaintiff from the cost of the suit. The plaintiffs entitled only for the interest of Rs. 3,600/- from the date of execution of the pronote of Rs. 30,000/- till the filing of the suit. It is submitted by the learned Counsel for the appellant that he has received all the decretal amount from the respondent plaintiff except this amount involving in the appeal of Rs. 3,600/ -. ( 7. ) CONSEQUENTLY, the appeal is allowed. The respondent defendant is directed to pay the additional amount of Rs. 3,600/- as interest to the appellant plaintiff. Parties to bear their own cost of the appeal.