The main legal point established in the judgment is the distinction between simple and compound interest, as well as the interpretation of relevant case law to determine the nature of interest in the case.

Aditya Kumar Trivedi, J.

One of the defendant/judgment debtor/petitioner has challenged the order dated 31.01.2013 passed by Munsif, Sadar, Motihari in Execution Case No.11 of 2005 whereby and where under the executing court, after forming its own to the effect that direction to pay principal with interest @ 12% per month in the judgment denotes compound interest, which has been directed to be paid by the petitioner.

2. For proper appreciation of the dispute, certain facts are to be taken note of. Respondent 1st set/decree holder/plaintiff had drawn up Title Suit no.265 of 1979 asking for a declaration, apart from others, that the sale deed executed by plaintiff no.2, Smt. Sunaina Devi in favour of defendant no.2, Smt. Lilawati Gupta on 29.12.1976 did not confer right, title interest upon defendant no.2 as being illegal and inoperative. The aforesaid relief was based upon so many grounds and one of the same was that the consideration money whatever shown in the aforesaid sale deed appertaining to Rs.1800/- was not the actual consideration money. Negotiation was finalised over Rs.2,500/- instead thereof Rs.1800/- has been shown in the sale deed with ulterior motive. In likewise manner also, controverted handing over Rs.700/- as earnest money, and so, submitted that as the payment of consideration money was condition precedent for transfer of title and possession, which never materialized, hence, the document in question remained inoperative. The defendants/judgment debtor/petitioner, after appearance vehemently opposed, refuted the allegations whatever been incorporated in the plaint, and further insisted that the document had already been acted upon as payment of consideration money was already done. However, with ulterior motive, succeeded in retaining the sale deed. While deciding the issue, though the suit was dismissed but during course thereof, it has been observed that out of Rs.1800/- the consideration amount incorporated in the sale deed, only Rs.500/- has been paid as an earnest money and on account thereof, remaining amount appertaining to Rs.1300/- was to be paid and so it was directed to the defendant that “after payment of remaining money with 12% per month interest enforceable till the date of payment, the defendant shall take the original sale deed under issue no.5 of the judgment. The aforesaid judgment and decree was challenged under Title Appeal no.118 of 1989/167 of 2004 where in cross-objection was also filed and the same was decided on 30.04.2015 by IVth Additional District Judge, East Champaran at Motihari dismissing the appeal as well as cross objection. However, from para-11 of the judgment of the title appeal it is evident that learned Appellate Court observed “the learned lawyer for the respondents submitted that an amount of Rs.1300/- was deposited after judgment of learned lower court through chalan. The balance amount of Rs.1300/- was withheld by the defendants for a period of 13 years and so considering the facts and circumstances of the case, awarding of 12% interest over said amount by the court below is reasonable.”

3. So from the judgment of appellate court, it is evident that remaining amount of Rs.1300/- had already been deposited after passing of the judgment and decree by the learned lower court.

4. Now the only question remains to be answered with regard to calculation of interest, whether it could be identified as simple or compound.

It has been submitted on behalf of petitioner that learned lower court during course of execution has wrongly and illegally construed that compound interest should be levied though the order impugned is silent with regard to mode of calculation of the interest. Therefore, being an executing court, the learned lower court should not have deviated from the finding so recorded by the original court as well as appellate court in the background of the fact that after judgment of title appeal, the judgment of learned trial court had merged therewith. Even in tit