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1979 Supreme(AP) 184

Andhra Pradesh High Court
Judges : A.SEETHARAM REDDY
P.R.Saigal - Appellant
Versus
State Bank of India - Respondent
Decided On : 04-22-79

The court's discretion to award future interest is limited by section 34 of the CPC, which sets a maximum interest rate of 6% per annum.

Headnote:

CIVIL PROCEDURE CODE - SECTION 34 - INTEREST - AWARD OF FUTURE INTEREST - COURT'S DISCRETION - SECTION 152 - AMENDMENT OF DECREE - ERROR APPARENT ON THE FACE OF THE RECORD - REVISION - JURISDICTION.

Fact of the Case:

The plaintiff filed a suit for recovery of Rs. 1,23,583.43 with interest at 14% from the date of suit to the date of realization. The trial court decreed the suit as prayed for. The defendant filed an interlocutory application under sections 152 and 153 of the Code of Civil Procedure (CPC) to amend the judgment and decree by reducing the interest rate from 14% to 6%. The trial court dismissed the application.

Finding of the Court:

The High Court allowed the revision petition and set aside the order of the trial court. The court held that the trial court erred in awarding future interest at 14% as section 34 of the CPC limits the interest rate to 6% per annum. The court also held that the error was apparent on the face of the record and could be corrected under section 152 of the CPC.

Issues: 1. Whether the trial court erred in awarding future interest at 14% when the statutory limit under section 34 of the CPC is 6% per annum? 2. Whether the error in the decree was an apparent error that could be corrected under section 152 of the CPC?

Ratio Decidendi: 1. Section 34 of the CPC limits the interest rate that can be awarded by a court to 6% per annum. This limit applies to both pre-decree and post-decree interest. 2. An error apparent on the face of the record is an error that is obvious and does not require any investigation or evidence to be established. Such an error can be corrected by the court under section 152 of the CPC.

Final Decision: The High Court allowed the revision petition and set aside the order of the trial court. The court held that the trial court erred in awarding future interest at 14% as section 34 of the CPC limits the interest rate to 6% per annum. The court also held that the error was apparent on the face of the record and could be corrected under section 152 of the CPC.

( 1 ) DEFENDANT is the revisionist. The suit was filed for recovery of rs. 1,23,583 43 Ps. on 6th November, 1975. It is prayed in the plaint that the suit be decreed with interest at the rate of 14 per cent, from the date of suit to the date of suit of realisation. Eventually the lower court in its judgment decreed the suit as under: "in view of the findings given above, the plaintiff is entitled to a decree for the suit amount. 9. In the result, the suit is decreed with costs as prayed for. " the revisionist filed Interlocutory Application No. 612 of 1977 under sections 152 and 153 of the Code of Civil Procedure for amending the judgment and decree in the suit by deleting the portion "the defendant de pay the plaintiff a sum of rs. 1,23,583 43 Paise with future interest at 14 per cent per annum from the date of suit, namely 6th November, 1975 till the date of realisation" and by substituting the words" "the defendant do pay the plaintiff a sum of Rs. 1,23,583. 43 Paise with fucure interest at 6 per cent, per annum from the date of suit ie. 6th November, 1975 till the date of realisation. " The interlocutory application was dismissed by the lower court stating that the case does not involve any clerical error or arithmetical mistakes either in the judgment or in the decree nor are there any accidental slips or omissions as contemplated under section 152, Civil procedure Code. As per the finding given in the various issues framed in the suit, the suit was decreed with costs as prayed for and accordingly the decree was also drafted. The lower Court also held:"of course, under section 34, Civil Procedure Code, future interest is allowable not more than 6 per cent, per annum. But under the amended Civil Procedure Code future interest can be granted at contractual rates in the case of commercial transactions. If the Court erred under law, it is for the petitioner to prefer an appeal and get the necessary relief. The question of law cannot be termed as arithmetical errors or clerical error or an accidental slip. "shri C. Mallikarjuna Rao, learned Counsel for the revisionist contends that under section 34 of the Code of Civil Procedure where a decree is for payment of money, the Court cannot award future interest from the date of judgment to the date of realisation at more than 6 per cent annum. A provision under which more than 6 per cent interest also could be awarded was added by way of an amendment by Act CIV of 1976 which came into force on 1st February, 1977 and this particular proviso was brought into operation on 1st July, 1977.

( 2 ) FURTHER, under Order 20, rule 6 A, Civil procedure Cole, the last portion of the judgment shall state in precise terms the relief which is granted under judgment. In the judgment it is merely mentioned as "the suit is decreed as prayed for with costs. " Though in the plaint, the prayer, is for awarding future interest at 14 per cent it was not competent for the Court to have decreed the suit awarding interest exceeding 6 per cent.

( 3 ) THE Counsel for the respondent contends that the plaintiff has prayed for award of 14 per cent interest per annum from the date of decree to the date of realisation and that was not disputed in the written statement. So no finding whatsoever was given and the lower Court decreed the suit as prayed for. Hence it is not a case where the Court had no jurisdiction. It may be at the most a case of involving question of law for which the remedy was to prefer an appeal against. The remedy sought for under sections 152 and 153, Civil Procedure code, is not available to the petitioner herein inasmuch as it does not involve any arithmetical or clerical mistake. The learned counsel for the respondent relied on the following decisions: S. Barrow v. State of uttar Pradesh and another and Gwalior northern India Transport Co. Ltd. , and another v. Dinkar Durga Shanker Joshi and another. The learned Counsel for the petitioner in reply argued that awarding of interest cannot be a


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