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Madras High Court
KAILASAM,GANESAN
Sigappiachi - Appellant
Versus
M.A.P.A.Palaniappa Chettiar - Respondent
Decided On : 10/22/1971
INTEREST - SECTION 34, CIVIL PROCEDURE CODE - PRINCIPAL SUM ADJUDGED - ACCOUNT SUIT - INTEREST FROM DATE OF SUIT TO DATE OF DECREE - INTEREST FROM DATE OF DECREE TO DATE OF PAYMENT.
Fact of the Case:
The appellants filed a review petition on the ground that there was an error apparent on the face of the record in the award of interest under Section 34, Civil Procedure Code (C.P.C.) in an account suit.
Finding of the Court:
The court held that Section 34, C.P.C. is applicable to an account suit and that the 'principal sum adjudged' is the amount found due on the date of the suit. Therefore, interest from the date of suit to the date of the decree can only be awarded on the 'principal sum adjudged'.
Issues: 1. Whether Section 34, C.P.C. is applicable to an account suit? 2. What is the 'principal sum adjudged' in an account suit? 3. Whether interest from the date of suit to the date of the decree can be awarded on the amount found due as on the date of the decree?
Ratio Decidendi: 1. Section 34, C.P.C. is applicable to an account suit because an account suit is treated as a money suit under Order VII, Rule 2, C.P.C. 2. The 'principal sum adjudged' in an account suit is the amount found due on the date of the suit. 3. Interest from the date of suit to the date of the decree can only be awarded on the 'principal sum adjudged' as payable on the date of suit.
Final Decision: The review petition was allowed to the extent that the interest from the date of suit to the date of the decree was awarded only on the 'principal sum adjudged' as payable on the date of suit.
KAILASAM, J.:- The appellants in A.S. No.201 of 1962 have filed this review petition on the ground that there is an error apparent on the face of the record. Their contention is that interest has not been awarded under Section 34, C.P. Code. It is also contended that the principal sum adjudged is Rs.34,773.68 on which alone interest can be awarded under Section 34, C.P. Code.
2. It is unfortunate that in the course of the prolonged hearing of the appeal, this point relating to interest was not raised by either of the parties. In the concluding part of our judgment, we directed that the interest that had been allowed by the lower Court upto the date of suit be confirmed and that from the date of suit compound interest on the amount found due at 7½ per cent will be calculated upto the date of realisation.
3. Section 34, Civil P.C. provides :-
"(1) Where and in so far as a decree is for the payment of money, the court may, in the decree order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the court deems reasonable on the aggregate sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the court thinks fit.
(2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have refused such interest, and a separate suit therefor shall not lie."
The section provides that the award of interest from the date of suit to the date of the decree is at the discretion of the court, while the rate of interest shall not exceed six per cent per annum on the principal sum from the date of decree to the date of payment.
4. On behalf of the respondent, it was contended that the suit is one for accounts and that the provisions of Section 34 are not applicable thereto. Order VII, Rule 2, Civil P.C. is the provision that is applicable to a suit for money. The rule provides that if the plaintiff sues for mesne profits, or for an amount which will be found due to him on taking unsettled accounts between him and the defendant, the plaint shall state approximately the amount sued for. One other provision that is relatable to an account is Order XX, Rule 16, which reads thus-
"In a suit for an account of pecuniary transactions between a principal and an agent, ......... where it is necessary, in order to ascertain the amount of money due to or from any party, that an account should be taken, the court shall, before passing its final decree, pass a preliminary decree directing such accounts to be taken as it thinks fit".
In the plaint, the plaintiff has valued the suit at Rs.1,00.000 and paid a court-fee of Rs.1,425 plus Rs.15 i.e., Rs.1,440 thereon, and stated that as and when the accounts are rendered and the exact sum due from the defendant is ascertained, he is prepared to pay the full and correct court-fee assessable thereon in addition.
5. From the provisions of O.VII, R 2, it is clear that an account suit is also treated as a money suit. Therefore, the provisions relating to money suit will apply to a suit for taking of accounts also. Prima facie, the provisions of Section 34 would be applicable in awarding interest in an account suit. But the question arises as to what is the 'principal sum adjudged' in an account suit.
6. Taking into account the provisions of the Code of Civil Procedure and the method in which an account suit is valued and court-fee, paid thereon, the principal sum adjudged would be the principal amount that is found payable by the defendant on the date of suit.
7. On behalf of the review petitioners it was submitted that this suit was based on several items of charges, n
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