Under-valuation of the suit and entitlement to claim interest

JUDGMENT

Vibhu Bakhru, J. (Oral)

1. The appellant has filed the present appeal impugning an order dated 15.11.2022 passed by the learned Commercial Court under Order VII Rule 10 of the Code of Civil Procedure, 1908 (hereafter 'CPC').

2. The appellanta/plaintiff had filed the aforesaid suit inter alia praying for a decree for a sum of Rs.1,66,60,555/- (Rupees One Crore Sixty Six Lakhs Sixty Thousand Five Hundred Fifty Five only) along with the interest at the rate of 18% per annum from the month of July 29, 2016, to the date of institution of the suit. The plaint was filed on 01.03.2019.

3. Although, the appellant had prayed for pre-suit interest; it did not quantify for the same. In addition, the appellant has also prayed for the payment of pendente lite interest at the rate of 18% per annum on the principal amount claimed (that is, Rs.1,66,60,555/- plus interest at the rate of 18% per annum from 29.07.2016 to 01.03.2019).

4. Respondent No. 1 (Defendant No. 1) in the suit is a firm constituted by defendant No. 2 and 3 (respondent No. 2 and 3 in the present appeal). The office of respondent No. 1 firm, falls within the territorial jurisdiction of the District Court at Dwarka. The address of respondent No. 3 also falls within the said district.

5. This Court is informed that respondent No. 2's address, that is, Ashok Nagar, New Delhi - 110018 falls within the territorial jurisdiction of the District Court (West) at Tis Hazari Court Complex.

6. It is the appellant's case that he had erroneously filed a suit in the District Court, Shahadara, on the assumption that the residence of respondent No. 2 (that is, Ashok Nagar) was located within the territorial jurisdiction of the said court. The appellant claims that the mistake was bona fide as there is a colony known as Ashok Nagar with the Pin Code 110093, which falls within the territorial jurisdiction of the Shahadara District Court. Although the colony where respondent no.2 resides is also known as Ashok Nagar, the pin code of that colony is 110018.

7. Defendant No. 3 (respondent No. 3) had filed a written statement raising the objection regarding the territorial jurisdiction of the learned Commercial Court.

8. The appellant contends that on realising the mistake, the appellant had filed an application seeking return of plaint for being presented before the court of competent jurisdiction.

9. During the course of the proceedings, the learned Commercial Court observed that the appellant had not included the value of the interest from the period of 29.07.2016 to 22.04.2019 in the value of the suit and had not paid the requisite court fees on that amount. The learned Commercial Court had held that if the value of the suit was correctly computed, it would exceed its pecuniary jurisdiction.

10. The appellant had contested the aforesaid proposition by claiming that it is not required to include the value of interest in the value of the suit or pay any court fees on the same; it claimed that it would be required to pay the same after the decree was passed.

11. The learned Commercial Court rejected the said contention and found that the appellant/plaintiff had under-valued the suit by approximately Rs.75 lakhs and held that owing to the said conduct, it would not be entitled to an interest on the principal amount with effect from 22.04.2019 till the date of the impugned order, that is, till 15.11.2022. Nonetheless, the learned Commercial Court also directed the appellant/plaintiff to comply with Order VII Rule 2 of the CPC and seek amendments to the suit for including the specific amount of interest as claimed (that is, interest on Rs.1.66 Crores for the period 29.07.2016 to 22.04.2019) and pay the necessary deficient court fees within the period of ten days.

12. In addition to the above, the learned Commercial Court also observed that the conduct of the appellant in undervaluing the suit is "nothing short of a scandalous conduct which exposes it to be penalized with exemplar