Samtel Colour Limited vs Khemaka Containers Limited

Valmiki J Mehta, J.—This case is on the ''Regular Board'' of this Court since 3.1.2011. Today, it is effective item No. 5 on the regular list. It is 12.50 P.M. but no one appears for the Respondent. I have therefore heard the learned Counsel for the Appellant and perused the record and am proceeding to dispose of the appeal.

At the outset, learned Counsel for the Appellant very fairly presses the only issue of the high interest rate of 18% per annum granted by the impugned judgment and decree for the pre-suit period on the principal amount of Rs. 1,42,062/-. Learned Counsel for the Appellant relies upon the recent judgments of the Supreme Court in which it is stated that in view of the changed economic scenario and the fall in the rates of interest, the Court should reduce the high rates of interest which are granted, especially considering the long pendency of litigation. 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, and State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd (2009) 3 A LR 140

I may note that there was no proof filed before the trial Court that during the relevant period in the year 1995, that the commercial rate of interest was 18% per annum. Even in the legal notice dated 20.6.1998 sent by the Respondent to the Appellant, the rate of interest of 18% has been claimed without mentioning that the same is the prevalent commercial rate of interest. I may note that in fact this notice dated 20.6.1998 has not been proved in the trial Court, i.e. the same has not been exhibited, and has been only marked as Mark I. I am, therefore, inclined to agree with the learned Counsel for the Appellant in view of the facts which emerge on record and also the judgments of the Supreme Court. In the facts and circumstances therefore I consider it appropriate that instead of 18% per annum the Respondent/plaintiff would be entitled to interest @ 12% per annum on the principal amount of Rs. 1,42,062/- from 1.11.1995 till the filing of the suit. I may note that the trial Court has granted the same rate of interest i.e. 12% per annum simple, pendent lite and future and therefore there was no reason to grant a different rate of interest for the period prior to the filing of the suit.

The appeal is therefore partially allowed by reducing the rate of interest from 18% to 12% per annum simple on the principal amount of Rs. 1,42,062/- from 1.11.1995 till the date of filing of the suit on 30.10.1998.

The future interest from the date of the decree will be payable @ 12% per annum till the appellant deposited the decreetal amount in this Court. Decree sheet be prepared. The appellant has deposited the entire decretal amount in this Court. The respondent was allowed to withdraw this amount against the security vide order dated 25.11.2003 but the same has not been withdrawn by the respondent. Appellant is held entitled to withdraw the excess amount deposited in this Court i.e. in excess of the decree passed today. Trial Court record be sent back.