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2012 Supreme(Jhk) 1589
IN THE HIGH COURT OF JHARKHAND AT RANCHI
APARESH KUMAR SINGH, J.
Govind Thakur…Petitioner
Versus
Bihar State Food & Civil Supply Corporation Ltd., Patna and others ….Respondents
W.P.(S) NO. 3088 OF 2005
Decided on : 05.11.2012
For the Petitioner:Mr. Praveen Kumar, Advocate
For the Respondents:Mrs. S. Singh, Advocate
The recovery of interest must be reasonable and justified, especially when the principal amount has already been recovered. Courts may rely on previous judgments to determine the reasonableness of interest rates.
Headnote:
Interest Recovery - Employment Dispute - CWJC No.3786 of 2000, Section 6 - Recovery of interest at 18% reduced to 6% - Recovery of shortage amount till 2001 - Interest recovery modified to 6%
Fact of the Case:
The petitioner, an Assistant Godown Manager, had a shortage of grain in the godown during his postings. The corporation recovered the shortage amount from his salary till 2001 and then sought to recover interest at 18% on the same amount. The petitioner challenged the excessive interest recovery.
Finding of the Court:
The court found that the recovery of interest at 18% was excessive and disproportionate, especially since the shortage amount had already been recovered till 2001. The court modified the interest recovery to 6% and directed the respondents to pass an order for consequential payments within 12 weeks.
Issues: Excessive interest recovery, Justification of 18% interest rate, Responsibility for delay in proceedings
Ratio Decidendi: The recovery of interest at 18% on the shortage amount already recovered till 2001 was found to be arbitrary and unreasonable. The court relied on a previous judgment (CWJC No.3786 of 2000) where the interest rate was reduced to 6% and modified the interest recovery accordingly.
Final Decision: The court disposed of the writ petition, modifying the interest recovery to 6% and directing the respondents to pass an order for consequential payments within 12 weeks.
Heard learned counsel for the parties.
2. Petitioner is aggrieved by an office order contained in Memo No. 6-04-1718-1-04-DP dated 20th May, 2005 issued by the order of the Chairman cum Managing Director, Bihar State Food & Civil Supply Corporation, whereby a sum of Rs.1,85,645.35 has been sought to be deducted from the salary of the petitioner as interest over the amount of defalcation already realised from the petitioner earlier, which is to be paid by him in installment and which does not exceed beyond 50 % of the salary, vide Annexure-3.
3. It is the case of the petitioner that he was posted as Assistant Godown Manager under the Corporation at different places and during the period of his posting at Gumla, Khagaria and Ranchi between 1987 to 2001, there was shortage of grain in the godown. The said shortage of grain assessed by the respondents amounting to Rs.1,71,736.00 was recovered from the salary of the petitioner from 1993 to 2001. Thereafter, a show cause notice was issued on February, 2004 upon him as to why interest @ 18% be not charged on the amount of shortage to be recovered from his salary further. The petitioner through his show cause dated 12th July, 2004 submitted that since recovery of the amount has already been made during the period of April 2001, interest can not be recovered for a period beyond April 2001, when the amount in question had already been recovered. The petitioner also requested that his arrears of salary from August 1996 to October, 1996 and from April, 1997 to October, 1997 i.e. 10 months be also paid to him.
4. The impugned order dated 20th May, 2005 has been passed thereafter directing recovery of the amount of Rs.1,85,645.35 in monthly installments which do not exceed 50% of his monthly salary.
5. Counsel for the petitioner assailed the impugned order on the ground that the recovery is being made after the amount for shortage of grain has already been realized from his salary till 2001 and the amount of recovery as well as the interest thereupon is excessive. Counsel for the petitioner in support of the aforesaid contention has relied upon the ground no. IV of para 2 of the writ application and submitted that in similar cases, the Hon’ble Court has already passed order to recover interest @ 6% and interest of 18% is highly excessive and disproportionate.
6. Counsel for the respondent-Bihar State Food and Civil Supply Corporation submits that the Corporation has since then been bifurcated and the Jharkhand Food and Civil Supply Corporation has already been constituted in the year 2011, under whose jurisdiction, the case of the petitioner now falls. However, counsel for the respondent-Bihar State Food and Civil Supply Corporation has defended the order by stating that the recovery of the interest amount is being made upto the year 2001 only and not beyond that. Counsel for the respondent has also relied upon the decision contained in Annexure-B of the Corporation dated 24th April, 2004 as also the office order dated 22nd January, 2005 to submit that the amount of penal interest was charged over the amount found for shortage of grain, which has been decided as per the bank's lending rate @ 18%. However, from perusal of Annexure-B, it appears that a decision was taken in CWJC No.3786 of 2000 by the Patna High Court by judgment dated 3rd July, 2003 wherein it was held that recovery at the rate of 18% interest is excessive and reduced it to 6%. Thereafter, the Board in its meeting has decided that in matters pursuant to the decision of the Court, if it is found that the proceeding has been pending on account of delay by the officers of the Corporation, interest @ 6% is to be charged and in other cases, interest @ 18% would be chargeable. The basis for charging 18% interest is penal interest, which is justified and is being based upon bank's lending rate.
7. I have heard learned counsel for the parties, gone through the materials on record including the impugned order.
8. Admittedly, the
