S. RAVINDRA BHAT, J.

1. The present appeal is directed against a limited portion of the common judgment and order dated 06.12.2010 of a learned single judge, disposing off two suits, i.e. CS (OS) 2105/1994, and CS (OS) 260/1994. The first suit was instituted by the Appellant and the second, by the respondent (claiming damages). For convenience, the suit filed by the Appellant (hereafter called “the Trust”) would be referred to as the “the recovery suit” and the other suit, filed by the respondent, (hereafter “the Jains”) would be referred to as “the damages suit”, or “the second suit”. The Trust is aggrieved by the impugned judgment, to the extent it denies any interest upon the money directed to be refunded by the respondent.

2. The facts briefly are that the Trust undertakes scientific research, in areas of medical science, technology and health care. The Jains approached it, for sale of their hospital “Udyan Medical Centre” - owned by a Private Limited Company i.e Udyan Diagnostic and Therapeutic Consultancy Private Limited (hereinafter referred to as “UDTC”). The Jains are directors of UDTC. The Trust alleged that, based on the negotiations held between its representatives and the Jains, it was agreed to acquire the hospital, consisting of the site No. B-18, Surya Nagar, Ghaziabad (“Ghaziabad Property”) admeasuring 579.71 square meters, with a construction, i.e., a 20 bed hospital; expensive medical equipments fittings and fixtures; laboratory equipments; physiotherapy equipment; and a X-ray machine. The land was owned by Mrs. Anju Jain, while the building with medical equipment minus the X-ray machine was owned by UDTC. The X-ray equipment was owned by Dr V K Jain. The parties agreed that the total consideration for purchase of land, the building and medical equipment, as also the X-ray equipment was to be Rs.42 lakhs.

3. The terms of the agreement between the Trust and the Jains was recorded in a receipt-cum-agreement dated 09.01.1993. This document was marked as Ex P-1 during the trial. At the stage of the agreement, Rs.2 lakhs was paid by the Trust to Dr V K Jain. The agreement also recorded that Rs.2 lacs which was received in cash, was in the nature of non-refundable earnest money, and that balance sum of Rs.40 lakhs was payable by the Trust by 26.02.1993; failing which, the transaction would deemed to be cancelled, and the earnest money paid in cash would stand forfeited. The agreement further provided that in case the transaction was rescinded by Dr V K Jain, he would be liable to pay a penalty equivalent to twice the amount (i.e., Rs.2 lakhs) received as earnest money. The Jains, apart from receiving that amount of Rs.2 lakhs, also received further sums of money. Of the total sum of Rs.13 lakhs alleged to have been paid by the Trust to Jains, (in addition to Rs.2 lakhs paid in cash on 09.01.1993), Rs.12 lakhs was evidently paid through pay orders, while the balance amount of Rs.1 lakh allegedly by way. The Jains have disputed the receipt of Rs.1 lakh by way of cash. Resultantly, there is a dispute as to the total amount received by them from the Trust pursuant to the execution of the agreement (Exhibit P-1). The Trust alleged that it paid to the Jains a sum of Rs.15 lakhs (including Rs.2 lakhs in cash paid initially), whereas the Jains accepted to receiving Rs.14 lakhs in all.

4. The Trust filed the first suit- for recovery of amounts, alleging that the defendant Jains did not take requisite steps to obtain necessary permissions from the local authorities qua the Ghaziabad property or from the Income Tax Authorities as was required at that point in time. The suit claimed refund of sum of Rs.15 lakhs paid to the Jains; interest on that sum for the period January-February, 1993 till 20.09.1994 at the rate of 24%, (quantified at Rs.5,55,000/-); compensation for loss of business @ Rs.9,45,000; and compensation for price escalation, and damages for loss of reputation-pegged at Rs.15 lacs. The total quantified