M/s. Jindal Realcon Pvt. Ltd. and Others vs M/s. Laxmi Narain Ram Dass and Co.

Valmiki J Mehta, J.

C.M. No. 2687/2013 (under Order 41 Rule 27 CPC)

This is an application filed under Order 41 Rule 27 of Code of Civil Procedure, 1908 (CPC). This application is filed by the respondent in the appeal and who was the plaintiff in the trial Court. Suit of the plaintiff was decreed for recovery of money. There is no cross-appeal by the respondent/plaintiff under Order 41 Rule 27 CPC. In the absence of substantive appeal, interim application in the nature of Order 41 Rule 27 CPC cannot lie.

This application is accordingly dismissed.

Crl. M.A. No. 1961/2013

Dismissed as not pressed.

C.M. Nos. 15591/2012 (under Order 41 Rule 27 CPC) and 15592/2012(condonation of delay)

This applications are allowed and the appeal has been re-heard.

RFA No. 245/2012

The only limited issue which is urged on behalf of the appellants/defendants and which was also urged when the earlier judgment was passed on 31.5.2012, is for reduction of interest including pendente lite and future interest. I may note that the suit was filed under Order 37 CPC. The appellants/defendants were given conditional leave to defend subject to deposit of the amount, however, this condition was not complied with and hence the suit was decreed as prayed for in the plaint.

In my opinion, during the pendency of the suit, it is the Court which has necessary powers u/s 34 CPC to award a particular rate of interest depending on the facts and circumstances of the case. The power to award interest u/s 34 CPC is not restricted by any clause in any agreement. Of course, I may hasten to add that no documents are part of the record of the trial Court whereby the respondent/plaintiff has shown what is the rate of interest payable prior to filing of the suit. Respondent/plaintiff however did aver in para 12 of the plaint about the entitlement to 10% interest in accordance with the form filled however in the leave to defend application, this aspect was denied by the appellants/defendants. In spite of the fact that rate of interest of 10% was denied, the respondent-plaintiff did not choose to file the form or any other document showing entitlement to interest @ 10% per annum simple till payment after the demand is made upon the appellants/defendants.

The Supreme Court in a line of judgments has held that in view of changed economic scenario where there has been consistent fall in rates of interest, Courts must in accordance with the changed circumstances grant lesser rates of interest. These judgments of the Supreme Court are Rajendra Construction Company Vs. Maharashtra Housing and Area Development Authority and Others, McDermott International Inc. Vs. Burn Standard Co. Ltd. and Others, , Rajasthan State Road Transport Corpn. Vs. Indag Rubber Ltd., Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra Reddy and Another, & State of Rajasthan and Another Vs. Ferro Concrete Construction Pvt. Ltd.,

Accordingly, in view of ratio of the judgments of the Supreme Court in the aforesaid cases, the respondent/plaintiff will be entitled to pendente lite and future interest till payment @ 9% per annum simple.

The issue now remains is the claim of pre-suit interest. The Division Bench of this Court in the judgment reported as Pandit Munshi Ram Associates vs. DDA 2010 (9) AD (Delhi) 313 has held that Courts are entitled to interfere with high rates of interest with respect to pre suit period if the rates of interest are very high, because such rates of interest will be violative of public policy.

In view of the aforesaid discussion, so far as the fact of pendente lite and future interest is concerned, the respondent/plaintiff will be entitled to interest @ 9% per annum simple, however, the issue as to the rate of pre-suit interest cannot be decided either way in the absence of any documentary evidence in the trial Court record with respect to what was the contractual rate of interest. Though I have already dismissed the application under Order 41 Rule 27 CPC filed by the respondent/plaintiff inasmuch as there is no substantive appeal or cross appeal filed by the respondent/plaintiff, however, since the difference is only of interest of 1%, I am of the opinion that the interest of justice will be served if the respondent/plaintiff is granted interest @ 10% per annum simple for the pre-suit period on the amount of Rs. 12 lacs from 7.11.2007 till the date of filing of the suit.

Accordingly, the appeal is partly allowed by modifying the impugned judgment and decree whereby the respondent/plaintiff will be entitled to interest @ 10% per annum simple from the appellants/defendants from 7.11.2007 (being the date of demand of booking amount by the respondent/plaintiff) till the date of filing of the suit, and thereafter for the pendente lite and future period, the respondent/plaintiff will be entitled to interest @ 9% per annum simple till payment of the decreetal amount by the appellants/defendants. The rest of the impugned judgment and decree stands. The concession in the rate of interest as per today''s judgment will be available in case the appellants/defendants make payment in terms of today''s judgment within a period of 12 weeks from today, and if payment is not made within the aforesaid period the original judgment and decree will stand revived. It is clarified that if the appellants/defendants have already paid amounts to the respondent/plaintiff, then, the said amounts will be taken as adjustment of the amounts which are payable to the respondent/plaintiff in terms of today''s judgment. Appeal is therefore partly allowed as stated above, leaving the parties to bear their own costs of this appeal.