Court upheld contractual interest of 18% from pre-suit period while awarding 9% future interest post-decree, reflecting equitable considerations of a commercial transaction.

JUDGMENT :

Amarinder Singh Grewal, J.

C.M. No.13273-C of 2012

Application is allowed as prayed for.

C.M. No.13274-C of 2012

Prayer in the present application is for condoning the delay of 207 days in re-filing of the appeal and the same is accompanied by an affidavit.

For the reasons stated in the application, the same is allowed and delay of 207 days in re-filing of the appeal is condoned.

RSA No.4768 of 2012 (O&M)

1. The present regular second appeal has been filed by the appellant-plaintiff/Corporation challenging the judgment and decree dated 29.10.2011 passed by the learned 1stAppellate Court, whereby the appeals preferred by defendant-firm as well as the plaintiff/Corporation were dismissed while upholding the judgment and decree dated 23.01.2009 of the learned trial Court.

Vide judgment and decree dated 23.01.2009 passed by the learned trial Court, the suit instituted by the appellant-plaintiff for recovery of damages, amounting to Rs. 10,84,568.32/- along with interest, was partly decreed. The learned trial Court awarded a sum of Rs. 2,71,663.50/- with interest at the rate of 12% per annum from 20.02.2002 till the date of the judgment, and further granted future interest @ 6% per annum to the appellant-plaintiff. It is the plaintiff-Corporation, who is before this Court in the instant appeal; whereas the defendant chose not to prefer any appeal.

2. For the sake of convenience, parties shall be referred to in terms of their status before the learned trial Court.

3. In brief, the facts are that the plaintiff-Punjab State Warehousing Corporation (PSWC) through its District Manager, filed the present suit for recovery of Rs. 10,84,568.32 along with interest. The case of the plaintiff is that the Food Corporation of India (FCI) declared 21,367 bags of paddy crop for the year 1997-98 stored at Patran Depot as damaged and authorized the plaintiff to dispose of the same through public auction. An auction notice was published in The Tribune on 07.02.2002, fixing 20.02.2002 as date for the auction on specified terms and conditions. The defendant firm participated after depositing Rs. 10,000/- as participation fee and was declared the highest bidder at Rs. 301/- per quintal. However, the defendant failed to deposit one-fourth of the auction amount, i.e., Rs. 10,18,019.62, on the spot as required, leading to cancellation of the bid and forfeiture of the security. The defendant-firm was subsequently informed vide notice dated 04.03.2002 that the stocks would be resold at its risk and cost. A re-auction was conducted on 25.09.2002, yielding a highest bid of Rs. 273.69 per quintal, resulting in a loss of Rs. 2,71,663.50 to the plaintiffCorporation. Additionally, the plaintiff-Corporation claimed Rs. 3,20,416.92 as interest @18% p.a. on the bid amount, Rs. 4,63,663.90 as storage charges, and Rs. 28,824/- @ 10 paise per bag per day for 21367 bags of paddy for 217 days towards advertisement expenses, totaling Rs. 10,84,568.32. Hence, the present civil suit.

4. Upon notice, the defendant-firm contested the suit by filing a written statement, raising certain preliminary objections. On merits, the defendant-firm denied liability, asserting that it had attempted to deposit Rs. 10,00,000/- in cash and draft with the plaintiff-Corporation, but the officials refused to accept the same without any reason.

5. On the basis of the pleadings, the learned trial Court framed seven issues, including one relating to relief. Upon careful appreciation of the oral and documentary evidence, the learned trial Court held that the defendant had failed to deposit the earnest money at