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2007 Supreme(Ori) 843
SANJU PANDA, J.
K. C. Pradhan
Versus
Arun Kumar Dutta.
First Appeal No. 383 of 1983
Decided on : 20 -11 -2007
M/s. P. V. Ramdas and N. C. Nayak, for Appellant.
The main legal point established in the judgment is the interpretation and application of Section 34 of the Civil Procedure Code regarding the award of interest on the principal sum adjudged.
Headnote:
Interest - Money Suit - Section 34 of the Civil Procedure Code - [34] - The court considered the appellant's claim for interest on the principal amount and referred to Section 34 of the Civil Procedure Code, which allows the court to order interest at a reasonable rate on the principal sum adjudged. The court highlighted the provisions of Section 34 and emphasized that the award of interest can only be on the principal sum adjudged and not on the principal and interest as on the date of the decree. The court also discussed the discretion of the court to award interest and the limitations on the rate of interest, providing a comprehensive interpretation of the legal provisions and their application to the case.
Fact of the Case:
The plaintiff gave a loan to the defendant, who failed to repay the amount as agreed. The plaintiff filed a suit for recovery of the amount with pendente lite and future interest.
Finding of the Court:
The court found that the plaintiff was not entitled to interest on the principal amount based on the absence of any agreement or stipulation for the payment of interest. The court confirmed the lower court's decision that the plaintiff is not entitled to any interest.
Issues: The core issue was whether the plaintiff is entitled to interest on the principal sum adjudged.
Ratio Decidendi: The court's decision was based on the interpretation of Section 34 of the Civil Procedure Code, which governs the award of interest on the principal sum adjudged. The court emphasized the limitations and discretion of the court in awarding interest, considering the absence of any agreement for the payment of interest.
Final Decision: The appeal was dismissed, and the court confirmed the lower court's decision that the plaintiff is not entitled to any interest.
JUDGMENT :- The plaintiff is the appellant. He has challenged the order and decree dated 11-8-1983 and 28-8-1983 passed by the learned Subordinate Judge, Jeypore in Money Suit No. 116 of 1982 wherein the learned trial Court has partly decreed the suit in favour of the plaintiff without granting any interest on the principal amount. Hence, the present appeal is confined to the payment of interest part only.
2. Though notice of this appeal was issued to and personally served on the respondent, there is no appearance on behalf of the respondent.
3. Before dealing with the question raised, the facts involved in the present case leading to filing of the appeal are narrated.
The appellant-plaintiff out of friendly relationship had given Rs. 12,000/- to the defendant on 25-4-1979 and on demand the defendant, vide two letters, Ext. 1 dated 4-6-1980 and Ext. 2 dated 28-3-1980, agreed to pay the said amount. The defendant has also issued two cheques dated 8-10-1980 and 10-1-1982 to the plaintiff. Both the cheques bounced as defendant had no money in his bank account. Thereafter, the plaintiff issued the demand notice, Ext. 5. As the defendant did not pay the amount as per the demand notice, the plaintiff was compelled to file the suit for recovery of the said amount with pendente lite and future interest.
4. The defendant was set ex parte.
5. To prove his case, plaintiff got examined himself as P.W. 1 and exhibited documentary evidence vide Exts. 1 to 5 in support of his claim. The learned Court below on considering the evidence adduced by the plaintiff and the statement on oath by the plaintiff in Court has held that on 25-4-1979 plaintiff has given the aforesaid amount to the defendant and the defendant has not returned the same. There is nothing on record to show that the defendant has agreed to pay the interest to the plaintiff on the aforesaid amount. Plaintiff is not entitled to any interest on the principal amount. On this finding it has decreed the suit in part.
6. Learned counsel appearing for the appellant submitted that since the trial Court has accepted the plaintiffs case regarding the payment of money by the plaintiff to the defendant, the Court below should have granted interest as per Section 34 of the Civil Procedure Code. Hence, this Court should interfere with the judgment and decree passed by the Court below and a direction may be issued to the defendant to pay interest on the principal amount.
7. The core question that needs to be decided in this appeal is whether the plaintiff is entitled to interest on the principal sum adjudged ?
8. Considering the aforesaid submissions, Section 34 of the Civil Procedure Code is extracted herein below for better appreciation.
"INTEREST
34. Interest
(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 such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit :
Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
Explanation I : In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Bank Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970).
Explanation II : For the purpos
