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2017 DIGILAW 2917 (MAD)

M. Palaniappan v. P. K. Rengasamy

2017-08-29

T.RAVINDRAN

body2017
JUDGMENT : The first appeal is directed against the Judgment and Decree, dated 20.12.2002, made in O.S.No.112 of 1997, on the file of the Subordinate Court, Karur. 2. Considering that the scope of the issue involved in the first appeal is very limited, it is unnecessary to delve much on the facts of the case in detail. 3. Suffice to state that the suit had been laid by the respondent/plaintiff for refund of the advance amount paid by him to the appellant/defendant pursuant to the agreement of sale entered into between them on 25.02.1994. It is found that the respondent/plaintiff has laid the suit against the appellant/defendant for refund of the advance amount paid under the above referred sale agreement amounting to Rs.1,93,000/- with interest thereon at 24% per annum from 25.02.1994 till date with the subsequent interest from the date of the suit till the date of realization. 4. The above said suit of the respondent/plaintiff was contested by the appellant/defendant on various grounds and also taken a defence that there is no agreement between the parties to pay interest on the advance sum in case, the respondent/plaintiff is entitled to claim the refund of the advance amount and therefore, prayed for the dismissal of the suit. 5. In support of the respondent/plaintiff's case, P.W.1 has been examined and Exs.A1 to A3 have been marked and on the side of the appellant/defendant, R.W.1 has been examined and no documentary evidence has been adduced. 6. The Court below, on a consideration of the materials placed, decreed the suit as prayed for with subsequent interest at the rate of 6% per annum. Impugning the same, the present first appeal has been preferred by the appellant/defendant. 7. The following points arise for consideration in this appeal: i. Whether the Judgment and Decree of the Court below in permitting the respondent/plaintiff to claim the refund of the advance amount with interest at the rate of 24% per annum from the date of the agreement till date and with subsequent interest at the rate of 6% per annum is correct? and ii. To what relief the appellant/defendant is entitled to? POINT NO.I: 8. Even at the commencement of his submissions, the learned counsel for the appellant/defendant has fairly conceded that the appellant/defendant is liable to refund the advance amount received from the respondent/plaintiff pursuant to the sale agreement entered into between the parties. and ii. To what relief the appellant/defendant is entitled to? POINT NO.I: 8. Even at the commencement of his submissions, the learned counsel for the appellant/defendant has fairly conceded that the appellant/defendant is liable to refund the advance amount received from the respondent/plaintiff pursuant to the sale agreement entered into between the parties. However, according to him, inasmuch as the sale agreement does not provide for the payment of interest or the payment of interest was not the subject matter of the agreement above referred to, it is his contention that the respondent/plaintiff is not entitled to claim interest at the rate of 24% per annum from the date of the sale agreement and accordingly, it is his further contention that the Court below has also erred in awarding in the above mentioned interest in favour of the respondent/plaintiff and therefore, according to him, the same is liable to be reversed. Further, according to the learned counsel for the appellant/defendant, there is no material placed that the suit transaction is a commercial transaction as such or no proof is also let in to evidence that the appellant/plaintiff has made use of the advance amount for any commercial activity as such and in such view of the matter, according to him, the Court below has erred in awarding the interest at the rate of 24% per annum. 9. At the commencement of his submissions, even the learned counsel for the respondent/plaintiff has fairly conceded that the interest awarded by the Court below is on the higher side. However, he would contend that the appellant/defendant having received the advance amount from the respondent/plaintiff on the date of the sale agreement itself and had been utilizing the same for one purpose or the other and only when the respondent/plaintiff has laid the suit for claiming the said refund amount, it is but natural on the part of the appellant/defendant to pay the same with interest thereon and in such view of the matter, according to him, the contention of the learned counsel for the appellant/defendant that the respondent/plaintiff is not entitled to get any interest for the refund of the amount as such cannot be countenanced and therefore, he would contend further that fair and adequate interest may be awarded in favour of the respondent/plaintiff by this Court. 10. 10. Considering the materials placed, it is found that the suit transaction does not pertain to any commercial activity. Further, it has also not been proved that the appellant/defendant has made use of the refund amount for any commercial purpose. It could, therefore, be seen that the respondent/plaintiff as such may not be entitled to seek for the refund of the advance amount with interest at the rate of 24% per annum. 11. Both parties agree that the provisions of Section 34 of the Code of Civil Procedure govern the issue involved in this matter. A perusal of the Section 34 C.P.C., would go to show that the Court may order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit till 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 6% per annum, as the Court deems reasonable on such principal sum, from the date of the decree till the payment, or to such earlier date as the Court thinks fit where and insofar as a decree is for the payment of money. 12. Inasmuch as the subject matter does not fall under the category commercial transaction, it is found that the proviso to Section 34 C.P.C., would not be applicable to the case at hand. 13. To a query raised by this Court to the learned counsel for the respondent/plaintiff as to what would be the reasonable interest that could be awarded in this matter, the learned counsel for the respondent/plaintiff would state that in his considered opinion, the interest at the rate of 18% per annum would be just. However, as to the same, the learned counsel for the appellant/defendant would contend that even the said rate of interest is on the higher side and considering the nature of the transaction, which had arisen between the parties concerned, according to him, the rate of interest should not be on the higher side, particularly, not more than 6% as contemplated under Section 34 C.P.C. 14. In support of his contentions, the learned counsel for the appellant/defendant placed reliance upon the decisions reported in (1988) 1 SCC 418 [Executive Engineer (Irrigation), Balimela and others vs. Abhaduta Jena and others] and AIR 1988 Mad 167 [T.K. Sundaram appellant vs. The Cooperative Sugars Ltd., Chittor]. The principles of law outlined in the above cited decisions are taken into consideration and followed as applicable to the facts and circumstances of the case at hand. 15. In the light of the above position, inasmuch as the appellant/defendant does not dispute his liability to refund the advance amount to the respondent/plaintiff and till date the appellant/defendant is found to have enjoyed the benefits of the advance amount, it is but natural that the respondent/plaintiff is entitled to seek for the interest also on the advance amount tendered by him to the appellant/defendant pursuant to the sale agreement entered into between the parties and considering the nature of the transaction between the parties and also the entitlement of the appellant/defendant to claim interest on the advance amount also and further, considering the scope of Section 34 C.P.C., which also gives discretion to the Court to award interest amount as it may deem fit and reasonable on the facts and circumstances of the case, in my considered opinion, the rate of interest sought for and awarded by the Court below at the rate of 24% per annum is on the higher side and it would be fair and just to hold that the respondent/plaintiff is entitled to seek interest only at the rate of 7.5% per annum on the advance amount from the date of the sale agreement till the date of the decree with subsequent interest at the rate of 6% per annum from the date of the decree till the date of realization. 16. In the light of the above discussions, I hold that the Judgment and Decree of the Court below in permitting the respondent/plaintiff to claim the refund of the advance amount with interest at the rate of 24% per annum from the date of the agreement till date and with subsequent interest at the rate of 6% per annum is not correct. I, further, hold that the respondent/plaintiff is entitled to seek the refund of the advance amount with interest at the rate of 7.5% per annum from the date of the agreement till the date of the decree and subsequent interest at the rate of 6% per annum from the date of the decree till the date of realization. Accordingly, Point No.I is answered. POINT NO.II: 17. In conclusion, the Judgment and Decree, dated 20.12.2002, made in O.S.No.112 of 1997, on the file of the Subordinate Court, Karur, are modified to the effect that the respondent/plaintiff is entitled to seek the refund of the advance amount with interest at the rate of 7.5% per annum from the date of the agreement till the date of the decree and subsequent interest at the rate of 6% per annum from the date of the decree till the date of realization. Accordingly, the suit in O.S.No.112 of 1997 is decreed in favour of the respondent/plaintiff with costs. Resultantly, the first appeal is allowed with the above modification. No costs. Consequently, connected civil miscellaneous petition is closed.