Whether Court obliged to grant interest at contractual rate in all cases.

RATNAM J.

The successful plaintiff in C. S. No. 472 of 1984 has preferred this appeal feeling aggrieved by the judgment and decree of the learned judge determining the rate of interest payable by the first defendant, the respondent herein, at 13% per annum from the date of plaint till the date of payment. The plaintiff instituted the suit, C. S. No. 472 of 1984, praying for the recovery of a sum of Rs. 15, 94, 294.60 with interest thereon at the rate of 18% per annum with quarterly rests from the date of plaint till the date of payment. On September 1, 1972, the appellant advanced to the respondent herein a loan of Rs. 6, 00, 000 carrying interest at 5% over the bank rate with a minimum of 11% per annum to be calculated with quarterly rests and as security for the due repayment of the amount so advanced, the respondent deposited its title deeds relating to "A" schedule properties in the plaint, in addition to offering the "B" schedule assets also as such security.

Several defences were raised by the respondent herein. Having regard to the limited dispute in this appeal, viz., the rate of interest payable by the respondent between the date of suit and the date of decree, it would suffice to note the defence raised by the respondent in that regard, according to which, the appellant was not entitled to claim interest at 18% per annum as per the contract. After the trial of the suit commenced and PW-1 and DW-1 had been examined, on November 29, 1989, the respondent, through its counsel, made an endorsement to the effect that the plaint suit claim is agreed to and that the interest rate alone is disputed. Pursuant to the endorsement so made, the respondent also expressed its readiness to pay the entire amount due under the decree that may be passed with such rate of interest as may be fixed by the court as payable from the date of plaint till the date of payment. Inasmuch as the amount claimed in the plaint included interest on the amount advanced at 18% per annum with quarterly rests till the date of plaint and that liability was accepted by the respondent herein under the endorsement referred to above, the court proceeded to determine the rate of interest payable by the respondent to the appellant from the date of plaint till the date of payment. While doing so, the court took into account the payment of a sum of Rs. 5, 00, 000 made to the appellant by the respondent on April 10, 1987, and also the expression of readiness and willingness to pay the balance of the amount that may be worked out after the rate of interest was fixed by the court to the appellant, the court fixed the rate of interest at 13% per annum from the date of plaint till the date of payment. The respondent was also directed to file a calculation memo and also bring the amount as per the calculation memo before the court the next day, i.e., November 30, 1989. Likewise, the appellant was also directed to bring the documents of title deposited with it by the respondent, so that on receipt of the amount from the respondent the documents could be handed over by the appellant to the respondent. Ultimately, the court directed the respondent to pay the appellant the amount claimed in the plaint with interest at 13% per annum from the date of plaint till the date of payment as well as costs and the matter was directed to be posted on November 30, 1989. On that day, the respondent filed a memo of calculation, according to which, the total amount payable as per the order of the court dated November 29, 1989, was shown as Rs. 21, 31, 747 and for that amount, a cheque was also handed over by the counsel for the respondent to the counsel for the appellant. Thereupon, the court directed the appellant to hand over the documents of title deposited by the respondent on or before December 2, 1989, and the respondent was also directed to get back the documents of title from counsel for the appellant. Yet another direction that a fixed deposit receipt for Rs. 15, 00, 000