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2012 DIGILAW 1235 (BOM)

National Bank for Agricultural and Rural Development v. Shah Thakur

2012-07-09

ROSHAN DALVI

body2012
JUDGMENT :- This suit has been filed for declaration of validity of an agreement entered into by and between the parties and for specific performance thereof and other incidental reliefs. The agreement was essentially for construction 532 flats in 19 buildings by the Defendants for the Plaintiff. 2. The flats have been constructed. The possession of the flats have been handed over by the Plaintiff to the Defendants; 380 flats were handed over in July 1990 and the remaining 152 flats on 22nd January, 1991. Upon such possession being given to the Plaintiff nothing would survive in the suit for adjudication by the Court. 3. The parties would no longer be at issue. Under the provisions of Order XV Rule 1 of the Code of Civil Procedure, 1908, the Court will be required to pronounce the Judgment. Order XV Rule 1 reads thus: "Parties not at issue. - Where at the first hearing of a suit it appears that the parties are not at issue on any question of law or of fact, the Court may at once pronounce judgment." (emphasis supplied) 4. The only Judgment that could be passed in such a suit at such a stage is that the suit had become infructuous and nothing would survive for disposal. 5. This would mean and include not only the prayer for declaration off specific performance, but also the ancillary relief of payment of compensation and/or damages. When the Defendants have done whatever they were bound to do under the contract and have performed their part of the contract and the Plaintiff has accepted the act and acted upon it, the Plaintiff cannot be further compensated. 6. Instead of putting to an end to the suit at the time possession of 532 flats came to be given by the Defendants and taken by the Plaintiffs, both the parties sought to litigate. There have been various applications made and orders passed in the suit relating to the deposit of amounts, withdrawal for amounts under Bank Guarantee, payment of interest etc., which are wholly extraneous to the issues in the suit and it cannot be agitated at the final hearing of the suit. The suit filed 23 years ago has been allowed to remain at large for the last two decades after it became infructuous. 7. Both the parties agree that no evidence need be led in the suit. The suit filed 23 years ago has been allowed to remain at large for the last two decades after it became infructuous. 7. Both the parties agree that no evidence need be led in the suit. Indeed there is none to lead. However, the parties have agitated with regard to what they called, "the payment of interest." 8. Before the filing of a lis, interest is payable either as per the contract between the parties or under the Interest Act. The payment of interest claimed by the parties is neither of these. 9. After the filing of the suit, interest is payable under Section 34 of the Civil Procedure Code (CPC) which runs thus: "Interest.- (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 the institution of the suit, , [with further interest at such rate not exceeding six percent 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" Such interest is payable on the principal amount claimed in the suit. It is payable upon a decree of payment ofmont1y. The Court would order interest to be payable on the principal amount remaining unpaid from the date of the filing of the suit until the date of the decree at a reasonable rate. 10. Hence, it is seen that no interest is grantable under Section 34 of the C.P.C. except on the principal sum .adjudged and except at a reasonable rate. 11. During the pendency of the suit, the parties agreed and/or undertook to pay interest at two specified rates. One was at one percent more than the commercial rate charged by the Bank. At that time the bank rate was 12% per annum. Hence Defendant No. 1 agreed to pay interest at the rate of 13% per annum. That was on the amount charged for deposits in the Bank. One was at one percent more than the commercial rate charged by the Bank. At that time the bank rate was 12% per annum. Hence Defendant No. 1 agreed to pay interest at the rate of 13% per annum. That was on the amount charged for deposits in the Bank. The other is under a certain Consent Terms between the parties at the rate of 6% per annum specifically computed and set out therein. 12. In the affidavit of the Defendant dated 14th February, 1990, the Defendants had offered to furnish Bank Guarantee of a Nationalized Bank for refund of the amount claimed by the Defendants pending the arbitration proceedings between the parties. 13. The parties litigated in this lis up to the Supreme Court. The Supreme Court has directed this Court to decide the rate of interest. The rate of payment of 13% per annum interest was subject to the final decision in this suit which came to be expedited under its order dated 11th December, 1991. This order was also obtained upon parties agitating issues in this suit after all the 532 flats were handed over 14. In a further order passed by the Supreme Court also the parties agitated the rate of interest. The Supreme Court directed that it will be decided in this suit by its order dated 3rd March, 2006. 15. The parties continued to litigate in other applications taken out by them. Consent Terms which spoke about an interim arrangement came to be filed by them on 11th July, 2006. Under the Consent Terms the Plaintiff was allowed to withdraw certain sums with agreed interest. The parties agreed to keep deposited an amount specifically calculated as interest at the rate of 6% per annum on the earlier amount of deposit and withdrawal. 16. It is not necessary to go in to the details of the cheques deposits made and withdrawals allowed to parties by Court order or by consent pending the suit. That is not essential for determination of the rate of interest under Section 34 of the Code of Civil Procedure, 1908. 17. 16. It is not necessary to go in to the details of the cheques deposits made and withdrawals allowed to parties by Court order or by consent pending the suit. That is not essential for determination of the rate of interest under Section 34 of the Code of Civil Procedure, 1908. 17. The entire dispute relating to interest relates to the rate at which the interest would be payable and whether at the rate of 13% per annum initially offered by Defendant No.1 in his affidavit filed in 1991 or at the rate of6% per annum allowed by the Plaintiff to be secured under the Consent Terms filed in 2006. All these applications are seen to be wholly extraneous to the issues in this suit and yet agitated pending and pursuant to certain arbitration proceedings with which this suit is not concerned. 18. This case is illustrative of how parties and advocates deviate from the main issues in the suit and the final relief which is to be prosecuted or defended and take out needless applications completely at a tangent from the reliefs in the suit ultimately required by the parties resulting in the most avoidable exercise of wanton litigation with its accompanying costs and consequent delays. Such acts and applications, wholly extraneous to the suit which completely derogate from the sound case management practices enshrined in the CPC must be eschewed. This is an example of a case of case mismanagement. No party must be allowed to make an investment out of a litigation, however, misdirected he may be. 19. The Plaintiff applies for a higher rate of interest upon amounts withdrawn and deposited, allowed and released, with or without bank guarantee when none of these was required for the final adjudication of the reliefs sought, which came to be allowed and conceded by the parties themselves and without requiring adjudication by the Court. 20. Even if some amount of interest is grantable, because the Defendants also equally acted upon extraneous applications instead of applying for judgment under Order XV Rule 1 of the CPC, the later agreement of the parties relating to the same agitated matter would show the intention of the parties in respect of that matter which must override the earlier agreement between the parties. This is to be seen along with the fact that 532 flats have been constructed so that the Plaintiff did not require to have the suit agitated on merits. Since the Defendants also concede that some rate of interest, at the rate last fixed is payable, interest at the rate of 6% per annum is granted. Order accordingly. 21. Suit is disposed of accordingly. Ordered accordingly.