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2006 Supreme(Chh) 376
2006(3) C.G.L.J. 400
HIGH COURT OF CHHATTISGARH, BILASPUR
Sunil Kumar Sinha, J.
ROKDE GOODS GARAGE - Appellant
Vs.
NATIONAL TEXTILES CORPORATION & OTHERS - Respondents
Second Appeal No.8 of 1989,
Decided on : 27.7.2006.
Shri Ravindra Agrawal, for the Appellant.
Shri N.K. Vyas, for the Respondent No.1.
Shri Parag Kotecha, for the Respondents no. 2 & 3.
The court established that in a commercial transaction, the party held liable may be responsible to pay interest at the prevailing commercial rate if they fail to rectify a mistake discovered during the course of the transaction.
Headnote:
Interest - Commercial Transaction - Code of Civil Procedure, Section 34
Fact of the Case:
The plaintiff filed a suit for recovery of a sum along with interest and costs, alleging that a bale of cloth was wrongly delivered to the defendant for transportation, and the defendant failed to return it despite being informed of the mistake.
Finding of the Court:
The court held that the transaction between the parties constituted a commercial transaction, and the defendant was obligated to pay interest at the prevailing commercial rate due to their failure to rectify the mistake.
Issues: The main issue was whether the defendant was liable to pay interest on the principal amount due to the wrongful delivery of the bale by the plaintiff.
Ratio Decidendi: The court interpreted Section 34 of the Code of Civil Procedure, which deals with interest, and held that the transaction qualified as a commercial transaction, making the defendant liable to pay interest at the prevailing commercial rate.
Final Decision: The appeal was dismissed, and the judgment and decree passed by the lower appellate court were confirmed. The defendant was ordered to bear the costs incurred by the plaintiff in all the courts.
Suni1 Kumar Sinha, J. :-
1. This appeal filed by defendant no.3 was admitted for hearing on 27.2.1989 on the following substantial question of law:
Whether in view of the fact that the bale in question had been wrongly delivered to the defendant no.3 due to the negligent act of the plaintiff corporation itself, the first appellate court erred in law in directing the defendant no.3-appellant to pay interest on the principle amount at the rate of 18%p.m. ?
2. The brief facts are that the plaintiff, respondent no. I herein, filed a suit for recovery of Rs.5,584.50 along with interesr@Rs.I.50 p.m. from the date of filing of the suit till realization and the cost of the suit. The plaint allegations are that the plaintiff's unit at Rajnandgaon, commonly known as Bengal Nagpur Cotton Mills, wrongly delivered one bale of cloth bearing no.C.B.906 to defendant no.3, appellant herein, for its transportation on 12.4.1979. When this mistake was discovered on 29.7. I 979, the defendant no.3 was asked to return the said bale. The said defendant promised to return the bale but in due course, the said bale no.C.B.906 was not returned to the plaintiff by the said defendant nor it was delivered to the other road transport through which it was to be sent to its destination. Various correspondences between the parties took place and ultimately, after giving a notice dated 26.5.l980 the plaintiff filed the suit for the above relief (s).
3. The defendants denied the claim of the plaintiff. The defendant no.3 in its separate written statement made averments that no such consignment bearing no.C.B.906 was received by its of five arid by mistake its local worker had signed the delivery slip. It also took a defence that a requisite notice ills 10 of the Carriers Act was not served within a period of six months and the suit of the plaintiff was not miaintainable.
4. The trial Court framed various issues in this case and after recording the evidence of the parties, held that the aforesaid bale no.C.B. 906 worth Rs.4588.23 P. was handed over to defendant nO.3. It was also held that even after receiving the information that it has wrongly been' delivered to them, the defendant no.3 did not return the same to the plaintiff. However, the trial Court dismissed the suit holding that a notice u/s 10 of the Carriers Act, 1865 was not duly served upon the defendant and in absence thereof, the suit Was liable to be dismissed .
5. Against the aforesaid judgment and decree passed by the trial Court, the plaintiff filed an appeal before the lower appellate court. The lower appellate court allowed the appeal of the plaintiff and decreed the suit for recovery of a sum of Rs.5584.50 P. towards claim. It also awarded interest thereon @ 18% per annum from the date of filing of the suit till its realization along-with cost of the suit through out. It is against this judgment and decree, passed by the lower appellate court, the defendant no. 3 has preferred this second appeal u/s 100 of the C.P.C.
6. Learned counsel for the appellant argued that since there was a mistake on the part of the plaintiff it self by making wrong delivery of bale to the defendant no. 3 for its transportation, the plaintiff was not entitled to recover interest@ 18% per annum and higher rate of interest has been awarded by the first appellate Court which is without any basis. Learned counsel further argued that the act of the parties cannot be classified under the definition of a "commercial transaction" and there was no contractual rate fixed between them, therefore, awarding interest @ 18% p.a. was not justified. His submission was that in any case, the rate of interest should not have exceeded 6% per annum in the present facts and circumstances of the case.
7. I have heard learned counsel for the parties at length and have also perused the records of the courts below.
8. Section 34 of the Code of Civil Procedure deals with interest. Proviso to sub-section (1) of section 34 provides
