Shri Narain Singh Dabas vs Shri Raj Pal Singh and Another

Anil Kumar, J.—This is a suit for recovery of Rs. 25.00 lakh filed by the plaintiff against the defendants on the ground that an amount of Rs. 25,00,000 was given as loan to the defendant for purchasing a property by him which amount the defendant has not returned though under the agreement entered with the plaintiff by the defendant he had to return the loan within forty five days.

The plaintiff contended that defendants are relations of the plaintiff and they had good relations. Defendants wanted to purchase some property at Nainital in September 2006 and, therefore, they approached the plaintiff as they were short of the money and consequently an agreement was arrived at between the plaintiff and the defendants whereby the plaintiff agreed to give a loan of Rs. 25.00 lakh to the defendants for purchase of the property by defendants at Nainital.

Under the agreement, defendants also agreed to refund the loan amount within 45 days of receiving the loan and it was also agreed that in case the defendants do not refund the loan amount, the plaintiff shall be entitled to recover the said amount from the property of the defendant at 155, Kohat Enclave, Pitampura, Delhi.

Consequently, the agreement dated 18th September, 2006 was executed between the parties and an amount of Rs. 25.00 lakh in cash was given to the defendants as loan which was to be refunded within forty five days.

The plaintiffs pleaded that 45 days period expired on 2nd November, 2006, however, the defendants did not purchase the property at Nainital nor the loan amount was refunded and, therefore, plaintiff made demands for the refund of the amount which was loaned to the defendants. The plaintiff pleaded that the defendants even refused to attend the demands made on telephone and avoided the plaintiff in one way or the other.

It is pleaded by the plaintiff that ultimately plaintiff served a legal notice by registered post and UPC demanding amount of loan. Notice sent by registered post was refused and the notice sent by UPC was not returned and it is deemed to have been served on the plaintiff.

As the defendants failed to return the loan amount in accordance with the agreement and despite demands made by the plaintiff, he filed a suit for recovery of Rs. 25.00 lakh with interest at the rate of 18% per annum from the date of the agreement, i.e., 18th September, 2006.

The summons of the suit was served on the defendants and defendant No. 1 and 2 appeared in person on 30th July, 2007. Despite the time given by the court to file the written statement in accordance with Order VIII Rule 1 of the Code of Civil Procedure, the written statement was not filed. Since the written statement was not filed within time prescribed under law, rather no written statement was filed, the right of the defendants to file the written statement was closed by order dated 14th December, 2007. Thereafter plaintiff filed his deposition on affidavit.

The plaintiff in his deposition deposed that the loan amount of Rs. 25.00 lakh was given pursuant to the agreement dated 18th September, 2006 arrived at between the parties. It is deposed that the agreement was signed by the defendants and the plaintiff and the agreement is also witnessed. The original agreement arrived at between the parties has been exhibited as Ex.PW1/A. The plaintiff has also proved the demand notice and the postal receipts which are exhibited as Ex.PW1/B (colly.). The UPC Certificate of posting to defendant No. 1 and 2 are also proved as Ex.PW1/B (colly.) and the registered envelope with the report of the refusal are also proved as Ex.PW1/C.

The deposition of the plaintiff has remained un-rebutted and in the circumstances the inevitable inference is that the plaintiff had given a loan of Rs. 25.00 lakh to the defendant which amount the defendants have failed to repay with interest despite the expiry of 45 days period as had been agreed by the parties under the agreement dated 18th September, 2006. The amount has not been refunded despite a notice of demand dated 7th March, 2007. Since it has been established that the plaintiff had given a loan of Rs. 25,00,000 which amount was received by the defendants and which amount has not been refunded by the defendants, therefore, the plaintiff has become entitled for a decree for recovery of Rs. 25,00,000 from the defendants jointly and severally.

According to the plaintiff the amount became due from the defendants after forty five days from 18th September, 2006 when the agreement was executed between the plaintiff and the defendants and an amount of Rs. 25,00,000/- was given as loan. In the circumstances, the plaintiff became entitled to get the loan amount back on or about 2nd November, 2006. In the prayer in the plaint the plaintiff has claimed interest from the date of the agreement, however, the amount which became due on account of interest from the date of the agreement till filing of the suit has not been given nor the amount of the interest has been included in the amount claimed in the suit nor any court fees has been paid thereon. In the deposition of the plaintiff it has not been deposed that the plaintiff is entitled for interest from the date of the agreement till filing of the suit. The plaint was filed by the plaintiff on 19th April, 2007. In the circumstances the plaintiff is not entitled for interest from the date of the agreement till filing of the suit.

The learned Counsel for the plaintiff has contended that if the plaintiff is not entitled for interest from the date of the agreement till filing of the suit, still the plaintiff shall be entitled for interest from the date of filing of the suit till the amount is recovered. The learned Counsel has relied on Hartlay Knits Vs. DVH Industries Inc. and Another, Life Insurance Corporation of India and Another Vs. Smt. S. Sindhu, Manalal Prabhudayal Vs. Oriental Insurance Co. Ltd., and Kanoria Chemicals Industries Limited Vs. Upendra Gariyali and Another, . to contend that the plaintiff is entitled for pendent lite and future interest in the facts and circumstances of the case.

In Hartlay Knits (supra) a decree for recovery of money in US dollars was passed and it was also held that the decree ordered shall be entitled for interest at the rate of 7% per annum till the date of realization. In Life Insurance Corporation of India (supra) it was rather held that Life Insurance Corporation of India was not liable to pay interest, however, the interest which had already been paid was directed not to be refunded. The ratio of the said cases does not support the plea of the plaintiff to claim interest pendente lite and future interest. In Manalal Prabhudayal (supra) award of interest at the rate of 12% per annum for the pre reference period, pendente lite and future interest was upheld by the Supreme Court. A single judge of Delhi High Court in Kanoria Chemicals Industries Ltd. (supra) had awarded pendente lite and future interest at the rate of 12% per annum though agreed rate of interest was 21%.

Considering the facts and circumstances and the deposition of the plaintiff in the present facts and circumstances, the plaintiff is, therefore, awarded simple interest at the rate of 9% per annum from the date of the institution of the suit till realization of the decreetal amount.

In the circumstances, the suit of the plaintiff is decreed for recovery of a sum of Rs. 25.00 lakh with pendente lite and future interest at the rate of 9% per annum from the date of institution of the suit till the realization of the decreetal amount. Cost of the suit is also awarded to the plaintiff against the defendant. Decree sheet be drawn accordingly.