JUDGMENT RAMESHWAR SINGH MALIK J. Present appeal, at the hands of the defendant-Insurance Company, is directed against the judgments passed by both the learned courts below, whereby suit for recovery filed by the plaintiffs respondents was decreed. Suit was decreed by the learned trial court alongwith interest @ 12% per annum, which was modified by the learned first appellate court, to the extent of 7½% per annum. Cross objections have also been filed by the plaintiffs for modifying the judgment of first appellate court, raising interest @ 12% on the decretal amount, as awarded by the learned trial court. Appeal as well as cross objections are being decided together. Brief facts of the case, as recorded by the learned first appellate court in its impugned judgment, are that the respondents are sons, daughters, widow and widowed mother of Shri Budh Ram son of Shri Paras Ram, Vaish Aggarwal, residents of village Madina Ahulana, Tehsil Gohana. Said Budh Ram had obtained an Insurance Policy bearing No. 16059176 for the insurance of his life from the appellant/Corporation on 28.3.1973. It was for a sum of `30,000/-. One Shri Surat Singh was the Agent of the Corporation. The proposal of Shri Budh Ram was accepted by the Corporation after his medical examination. In the said proposal, the age of Shri Budh Ram was given as 45 years. In the proposal, his date of birth was given as 1.5.1928. Shri Maman Chand-respondent was a nominee mentioned in the Insurance Policy. On the death of Shri Budh Ram, a claim was preferred by Shri Maman Chand respondent with the appellant/Corporation. His claim for the Insurance money was negatived by the appellant/Corporation on 10/14-3-1978 (Ex.PW3/6). The grounds taken were that, in his proposal dated 28.3.1973 and statement dated 29.3.1973 at the time of medical examination, the deceased has given his age as 45 years and made false representation of 7½ years in his age. It was also given out that had the appellant/Corporation known the true facts, it would have not accepted the proposal. Subsequent representation by Shri Maman Chand also failed. So, the respondents brought the suit before the learned trial court on 9.3.1981. They sought a decree for a sum of 30,000/- against the appellant/corporation. The costs of the suit was also claimed. Subsequent representation by Shri Maman Chand also failed. So, the respondents brought the suit before the learned trial court on 9.3.1981. They sought a decree for a sum of 30,000/- against the appellant/corporation. The costs of the suit was also claimed. It was averred that the contract between the appellant and Shri Budh Ram, deceased, was a complete contract and the same could not be repudiated after his death. In replication, all allegations of misrepresentation or concealment of facts by Shri Budh Ram were controverted. In the written statement, the appellant/corporation mainly resisted the suit on the same grounds as mentioned above. Certain preliminary objections were also taken. On completion of the pleadings, following issues were framed by the learned trial court:- 1. Whether the policy was obtained by Budh Ram, since deceased by suppressing true facts regarding his age and health; and is void ab-initio? OPD 2. Whether the contract between Budh Ram since deceased and defendants could not be repudiated. If so to what effect? OPP 3. Whether the civil court at Gohana has no jurisdiction to try the present suit? OPD 4. Whether the plaintiffs have no cause of action. If so, to what effect? OPD 5. Whether the suit is barred by limitation? OPD 6. Whether the defendants are entitled to special costs? If so, to what effect? OPD 7. Relief. In order to substantiate their respective stands taken, both the parties led their oral as well as documentary evidence. After hearing learned counsel for the parties and going through the evidence brought on record, learned trial court came to the conclusion that the plaintiffs have proved their case. Accordingly, their suit for recovery of `30,000/- was decreed alongwith interest @ 12% per annum, vide impugned judgment and decree dated 30.1.1986. Feeling aggrieved, defendants filed their first appeal, which came to be partly allowed only to the extent of reducing the rate of interest from 12% to 7½% per annum, vide impugned judgment and decree dated 18.12.1986. Dissatisfied against the impugned judgment passed by the learned District Judge, Sonepat, defendant-Insurance Company filed present appeal, whereas plaintiffs have filed their cross objections. Learned counsel for the appellant submits that Budh Ram-predecessor-in-interest of the plaintiffs was insured vide policy dated 28.3.1973 Ex.P1. He died on 5.4.1977. His legal representatives submitted their claim in the month of October, 1977. Dissatisfied against the impugned judgment passed by the learned District Judge, Sonepat, defendant-Insurance Company filed present appeal, whereas plaintiffs have filed their cross objections. Learned counsel for the appellant submits that Budh Ram-predecessor-in-interest of the plaintiffs was insured vide policy dated 28.3.1973 Ex.P1. He died on 5.4.1977. His legal representatives submitted their claim in the month of October, 1977. Claim was repudiated on 10.3.1978 on the ground that insured wrongly given his age less by 7½ years. Thus, suit for recovery of insured amount, i.e. `30,000/- was filed on 9.3.1981 wherein plaintiffs did not claim any interest. In para 12 of the plaint, plaintiffs waived off their claim for profit and bonus on the policy amount of Rs. 30,000/-. Although the plaintiffs did not claim interest, yet the learned trial court granted interest @ 12% and that part of the decree was without jurisdiction. Learned lower appellate court also fell in error of law, while reducing the rate of interest to 7½% per annum. He further submits that since learned courts below misdirected themselves while not appreciating the true facts of the case as well as evidence available on record in the correct perspective, impugned judgments and decrees were not sustainable. In support of his contentions, he relies upon Balwant Kaur Vs. Life Insurance Corporation of India, 2005 (1) RCR (Civil) 36, Smt. Shanta Trivedi Vs. Life Insurance Corporation of India, AIR 1988 Delhi 39, Laksihmi Insurance Co. Ltd Vs.Bibi Padma Wati AIR 1961 Punjab 253 (Vol. 48, C 79) (1) and The Life Insurance Corporation of India Vs. Smt. Susheela Khanna and others, 1984 PLR 287. He prays for setting aside the impugned judgments and decrees, by allowing the present appeal. On the other hand, learned counsel for the plaintiffs-cross objectors submits that learned trial court rightly decreed the suit for recovery with interest. However, learned first appellate court illegally reduced the rate of interest from 12% to 7½%. He further submits that impugned judgment passed by the learned District Judge was liable to be modified to this extent, holding plaintiff-respondents entitled for interest @ 12%, as granted by learned trial court. He concluded by submitting that judgment passed by learned trial court deserves to be restored, whereas judgment rendered by learned first appellate court was liable to be modified. He prays for dismissal of the appeal. He concluded by submitting that judgment passed by learned trial court deserves to be restored, whereas judgment rendered by learned first appellate court was liable to be modified. He prays for dismissal of the appeal. Having heard the learned counsel for the parties at considerable length, after careful perusal of record of the case and giving thoughtful consideration to the rival contentions raised, this Court is of the considered opinion that in view of the peculiar fact situation of the present case, instant appeal deserves to be allowed, whereas cross-objections are liable to be dismissed, however, with a direction that since the decretal amount alongwith interest @ 12% per annum had already stood paid to the plaintiffs-respondents, the same shall not be recovered from the plaintiffs. To say so, reasons are more than one, which are being recorded hereinafter. Under the given fact situation of the present case, following is the substantial question of law that falls for consideration of this Court;- “Whether learned courts below exceeded their jurisdiction while granting interest on the Sum Assured, when it was not so provided under the insurance policy Ex.P1, and also because the plaintiffs themselves did not make any prayer claiming interest in their plaint.” Facts of the case are not in dispute. Late Budh Ram was insured vide policy dated 28.3.1973 Ex.P1. He died on 5.4.1977. Claim was submitted by his LRs in the month of October, 1977, which was repudiated by the appellant-Insurance Company on 10.3.1978. Thereafter, suit for recovery of `30,000/- was filed on 9.3.1981 without any prayer for claiming interest. Late Budh Ram was insured vide policy dated 28.3.1973 Ex.P1. He died on 5.4.1977. Claim was submitted by his LRs in the month of October, 1977, which was repudiated by the appellant-Insurance Company on 10.3.1978. Thereafter, suit for recovery of `30,000/- was filed on 9.3.1981 without any prayer for claiming interest. Relevant Clause of the policy Ex.P1 reads as under:- “Now this Policy Witnesseth that in consideration of the premises and on condition that there shall be duly paid to the Corporation the subsequent premiums as stipulated for in the said Schedule, the Corporation will pay the Sum Assured together with such further Sum or Sums, as may be allocated by way of Bonus at its Divisional Officer specified below but without interest to the person or persons to whom the same is therein expressed to be payable upon proof to the satisfaction of the Corporation of the happening of the event on which the Sum Assured is to become payable in terms of the said Schedule, of the title of the person or persons claiming payment and of the correctness of the Age of the Life Assured stated in the Proposal if not previously admitted.” Once the claimants were entitled for the Sum Assured but without interest, as agreed between the parties in the abovesaid Clause of the policy Ex.P1, plaintiffs were not entitled for interest which was wrongly awarded by the learned courts below. In such a situation, provisions contained in Section 3(3)(a)(ii) of the Interest Act, 1978, would be attracted, which reads as “any debt or damages upon which payment of interest is barred, by virtue of an express agreement”. In the present case, there was an express agreement between the parties in the form of the abovesaid clause of the policy Ex.P1, because of which the plaintiffs were not entitled for interest on the sum assured. Having said that, this Court feels no hesitation to conclude that learned courts below transgressed their jurisdiction, while granting interest to the plaintiffs-respondents, even without there being any prayer made on their behalf and also in view of the abovesaid express agreement between the parties. The view taken by this Court also finds support from the abovesaid judgments relied upon by the learned counsel for the appellant. The view taken by this Court also finds support from the abovesaid judgments relied upon by the learned counsel for the appellant. The relevant observations made by a Division Bench of this court in para 63 and 64 of the judgment in Laksihmi's case (supra), which can be gainfully followed in the present case, read as under:- “In a recent decision of the Supreme Court of India in Thawardas Pheramal Vs. Union of India (S) AIR 1955 SC 468 , this matter was examined in some detail, and it was held, that the following, among other conditions, must be fulfilled before interest can be awarded under the Act: (1) there must be a debt or a sum certain; (2) It must be payable at a certain time or otherwise; (3) these debts or sums must be payable by virtue of some written contract at a certain time; (4) there must have been a demand in writing stating that interest will be demanded from the date of demand. In this case, the plaintiff did not make any such demand from the insurer. Moreover, there is no agreement between the insured and the insurer entitling the former to any interest. No question of market usage, whereby insurers become liable to pay interest on overdue amounts of policy has been pleaded or could possibly arise. Prior to the coming in force of the Law Reforms (Miscellaneous Provisions) Act 1934 (section 3), the interest upon the money payable upon a policy of insurance upon the life of the insured could not be recovered from the insurer, even though the payment had been wrongfully delayed or where such promise was to be implied from the usage of trade or other obligations. Reference has also been made in the course of the arguments to Section 34 of the Code of Civil Procedure, which relates to the discretion of the Court in allowing interest after the due date of the suit. In this case, not interest after the suit has been allowed by the trial court and the plaintiff is not aggrieved on this account as no appeal or cross-objections have been filed in this Court. For reasons stated above, interest must be denied, to the plaintiff, and issue No.4 is decided against her. No other issue has been pressed, and no other point has been taken by the parties. For reasons stated above, interest must be denied, to the plaintiff, and issue No.4 is decided against her. No other issue has been pressed, and no other point has been taken by the parties. Similarly, the law laid down by the Delhi High Court in Smt. Shanta Trivedi's case (supra), which aptly applies to the facts of the present case, read as under:- “The contract of insurance as set out in the life insurance policies expressly bars the payment of any interest by the defendant to the person entitled to receive the insurance amount. The learned counsel for the plaintiff contended that the plaintiff would be entitled to interest under the interest Act, 1978 but his contention is incorrect in view of Sub-Sec. (3) (ii) of the Section 3 of the said Act which provides that nothing in Sec. 3 shall apply in relation to any debt or damages upon which payment of interest is barred, by virtue of an express agreement. Interest is payable under Sec. 3(1) and (2) of this Act in the discretion of the Court but interest cannot be allowed if the payment of interest is barred by virtue of an express agreement. There is no mercantile customary usage proved on the records of the case whereby interest would be payable to the plaintiff. Thus, the plaintiff is not entitled to any amount by way of interest and this issue is decided accordingly against the plaintiff.” Reverting back to the facts of the present case and respectfully following the law laid down in the cases referred to hereinabove, answer to the substantial question posed above, is and has to be in the affirmative. In the present case, plaintiffs did not challenge the validity of the abovesaid clause of an express agreement between the parties. It seems that plaintiffs were fully aware about the abovesaid clause of the insurance policy because of which, they did not take any averment or made any prayer in their plaint claiming interest on the sum assured. In this view of the matter, it is unhesitatingly held that learned courts below committed patent illegality, while not appreciating the material aspects of the matter, because of which the impugned judgments and decrees cannot be sustained. In this view of the matter, it is unhesitatingly held that learned courts below committed patent illegality, while not appreciating the material aspects of the matter, because of which the impugned judgments and decrees cannot be sustained. Having decided the substantial question of law in favour of the appellant-Insurance Company in the aforesaid terms, next issue that arises for consideration of this court is whether it would be equitable to allow the appellant-Insurance Company to recover the amount of interest @ 12%, which already stood paid to the claimants-plaintiffs. Admittedly, it was not a huge amount and the poor claimants were legal heirs of the deceased Budh Ram-Insured. When this pointed question was put to the learned counsel for the appellant-Insurance Company, he very fairly and graciously stated that it would not be equitable to order recovery from the plaintiffs at this belated stage, particularly when it was not a huge amount, which already stood paid long back. Learned counsel for the appellant was fully justified on facts, in law as well as in equity while saying so. Otherwise also, this Court is inclined to exercise its discretion in favour of the claimants to the extent indicated above. No other argument was raised. Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this Court is of the considered view that since the impugned judgments and decrees have been found suffering from patent illegality, the same cannot be sustained. Accordingly, while allowing the appeal of the Insurance Company and dismissing the cross objections filed by the claimants-plaintiffs, impugned judgments and decrees are modified. The suit of the plaintiffs is hereby partly decreed for recovery of the sum assured but without interest. However, since the decretal amount alongwith interest @ 12% per annum has already been paid to the claimants-plaintiffs, the appellant-Insurance Company will not be entitled to recover the same in the peculiar fact situation of the present case, as observed in the foregoing paragraph. Resultantly, with the observations made above, cross objections stand dismissed whereas the appeal stands allowed in the aforesaid terms, however, with no order as to costs.