A.W. Inglis vs Sarju Prasad Misser

Facts.--Plaintiffs sued for partition on the 6th of July 1910 in the Court of Subordinate Judge of Darbhanga which was decreed in his favour. Defendant was in possession of the mauza in suit partly as proprietor and partly by virtue of leases from other co-sharers. Plaintiffs had prior to suit purchased shares of the lessors of the defendant.

On 21st September 1911 the preliminary decree was passed by which aintiffs were given profits.

On appeal the Calcutta High Court disallowed the claim for mesne profits but decreed that an ordinary account as between co-sharers should be taken. In accordance with this order of the High Court the Subordinate Judge decreed a certain amount as interest on the compensation allowed to the plaintiffs for the period prior to the suit. Among other pleas the defendant complained the interest for a period prior to suit should not be awarded. There were also cross-objections by the plaintiff on questions of fact which are not material for our report.

Dawson Miller, C.J.

In this case I had prepared a judgment dealing with the questions in dispute in the appeal and had arrived at the same conclusion as my learned brother Mullick, J. Since then I have had an opportunity of perusing the judgment prepared by him. I agree with him in the conclusions he has arrived at, but as he has deen with some of the points, more specially the question of interest, more fully than I have thought fit to do I need only say I concur in the judgment about to be delivered.

Mullick, J.

[His Lordship after setting out facts as stated above and dealing iwith matters not material for our report proceeded as follows:--] The Subordinate Judge has awarded interest at 6 per cent, as part of the compensation due to the plaintiffs. It is argued that as the, plaintiffs are not entitled to mesne profits and as there was no demand by the plaintiffs for delivery of possession, interest cannot be allowed. An attempt was made by the respondents to show that a demand was in fact made, but there is no reliable evidence of this, and the question is one of law; namely, whether a co-owner who has appropriated the profits of the joint property for a number of years, is liable to refund anything more than the actual amount of such profits. A co-sharer''s liability to pay compensation was decided by their Lordships of the Privi Council in Watson and Co. v. Ramchund Dutt [1891] 18 Cal. 10 and in a subsequent suit for compensation, interest was awarded for a period anterior to that suit but subsequent to the former suit Watson and Co. v. Ramchund Dutt [1896] 23 Cal. 799. The question, however, is whether interest is allowable here for the period anterior to the suit. The relevant portion of Act XXXII of 1839 runs as follows:

It is, therefore, hereby enacted that, upon all debts or sums certain, payable at a certain time or otherwise the Court before which such debt or sums may be recovered may, if it shall think fit, allow interest to the creditor at a rate cot exceeding the current rule of interest from the time when such debts or sums certain were payable by virtue of some written instrument at a certain time, or if payable otherwise, then from the time when demand of payment shall Lave been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the time of payment. Provided that interest shall be payable in all oases in which it is now payable by law.

In Hare Per sad Roy v. Shama Persad Roy [1878] 3 Cal. 654 their Lordships of the Privy Council considered the question whether these words did not debar the Court from giving interest on mesne profits. The suit was for recovery of possession and mesne profits by a younger brother against his elder brother in respect of his share of the family property which had been previously separated by private partition. Their Lordships pointed out that the proviso in the Interest Act referred to the state of the law and practice in India independently of the Statute and in regard to earlier cases cited before them in which interest on mesne profits had been allowed for a period anterior to the suit, they observed that they were far from saying that these oases had been wrongly decided. It was clear that in their Lordships'' opinion interest could be granted on equitable grounds though in the circumstances of the case before them they gave interest only from the date of the institution of the suit.

Next we find that while in cases of restitution Section 144 of the present CPC makes provision only for proper orders as regards payment of interest or damages, the principle has been applied to cases where money deposited in Court has been withdrawn by one party on an undertaking to repay the amount but without any undertaking to pay interest Alagappa Chettiar v. Muthukumara Chettiar [1918] 41 Mad. 316.

In a land acquisition case where one party had withdrawn the amount allowed as compensation by the Land Acquisition Court and the amount was afterwards reduced on appeal, the Court in exercise of its inherent powers directed the payment of interest over the excess Collector of Ahmadabad. v. Lavji Mulji [1911] 35 Pom. 255.

In Hamira Bibi v. Zubaida Bibi [1916] 38 All. 581 a Muhammaden widow was allowed to take possession of her husband''s estate in order to satisfy her dower debt with the income of it, and there was no agreement, express or implied, that she should not be entitled to claim any sum in excess of her actual dower. It was held by their Lordships of the Privy Council that on equitable considerations she was entitled to some reasonable compensation, not only for the labour and responsibility imposed on her for the proper preservation and management of the estate, but also for forbearing to insist on her strict legal rights to exact payment of her dower on the death of her husband; and such compensation for forbearance to enforce a money payment was best calculated on the basis of an equitable rate of interest.

In Muhammadan Abdul Saffur Rowther v. Ramida Bivi Ammal [1919] 42 Mad. 661 the plaintiff, a Muhammadan lady, sued for her share on taking account of the business which was carried on by her father while he was alive and which was continued by her brothers, the defendants, after his death, the amount due to the plaintiff still being utilized by her brother. It was contended that there was no established practice as to interest being payable to a Muhammadan lady claiming interest on an uniscertained sum of money due to her as her family business. It was held following the decision of their Lordships of the Privy Council in Miller v. Barlow [1871] 3 P.C. 733 to the effect that Indian Courts are Courts both of law and of equity, that the Court was competent to award as damages interest not covered by the Act. The learned Judges also drew attention to the observation of Lord Herschell in Lonaon Chatham and Dover Railway Co. v. South Eastern Railway Co. [1893] A.C. 429 to the effect that the hands of the Courts in England were tied as to awarding interest on equitable grounds by previous decisions: and they decreed interest in the suit before them on the ground that there was no such course of decisions in this country.

In Khetra Mohan Poddar v. Nishi Kumar Saha 22 C.W.N. 488 the plaintiff had supplied cloth to the minor defendant''s father and sued for the recovery of the value of the cloth on adjustment of accounts and for interest on the said sum. One of the questions raised was whether the minor was liable for interest. The Court, having regard to the long time during which the plaintiff had been kept out of the money, awarded interest at 6 per cent. as damages. They were of opinion that interest could be given in cases where it was not recoverable either under contract or the provisions of the Indian Interest Act.

In my opinion interest should be given in this case on equitable grounds. The defendant has had the use of the rents and profits in respect of the share of the plaintiffs for many years and it is obvious from the course which this litigation has taken that he has left no stone unturned to prevent the plaintiffs from taking possession. As he is the owner of an indigo factory it is presumed that he is a man of ordinary business habits and that he invested the money for his own benefit.

In these circumstances, I think the order granting interest as damages must be affirmed. The rate, being only 6 per cent, is certainly fair.