The court affirmed that the discretion to award interest must consider equitable principles and prevailing market rates.

ORDER

Dated : 20^th January, 2026 The appellant in RFA 59/2014 filed this Review Petition praying for reviewing the judgment dated 28.7.2025 passed by this Court. The appellant is the defendant in O.S. 232/2011 on the file of the Sub Court, Cherthala. The plaintiffs filed the above suit for realisation of a sum of Rs.8,00,000/- deposited by their mother in the State Bank of Travancore, Aroor branch with the defendant as her nominee. The defendant is none other than the brother of the mother of the plaintiffs. The trial court decreed the suit directing the defendant to pay a sum of Rs.8,26,500/- along with interest at the rate of 12 % per annum from the date of decree till realisation. Aggrieved by the above judgment and decree, the defendant preferred the RFA. As per the judgment dated 28.7.2025, this Court dismissed the RFA, confirming the judgment and decree of the trial court.

2. In this review Petition the appellant contends that he has already deposited a sum of Rs.10,46,886/- before the Sub Court, Cherthala and that the same has already been placed in Fixed Deposit in the name of the Sub court. Annexure-1 is the copy of the term deposit certificate dated 26.11.2014 issued by the SBT in that respect. Therefore, according to the appellant, he is not liable to pay interest to the plaintiffs for the period after 26.11.2014.

3. On the other hand, the learned counsel for the respondents/plaintiffs would argue that the above deposit was made by the appellant as security as directed by the Court for staying the execution proceedings and as such, the respondents are entitled to get interest till the amount is paid. Since the appellant deposited the amount as security as a condition for an interim stay against execution of the impugned judgment and decree and since the amount was not paid to the respondents, the appellant is liable to pay interest to the respondents till the date of payment. However, it is made clear that since the appellant deposited the said amount in Fixed Deposit, he will get the benefit of interest accrued thereon. At the same time, he is liable to pay interest to the respondents till the date of payment.

4. The learned counsel for the appellant would argue that interest at the rate of 12% awarded by the trial court and as confirmed by this Court, is too exorbitant and hence he prayed for reducing the rate of interest. The above argument was strongly opposed by the learned counsel for the respondents on the ground that in the memorandum of appeal, the rate of interest was not challenged.

5. It is true that in the memorandum of appeal, the appellant has not challenged the rate of interest. The learned counsel for the appellant relying upon the decision of the Hon'ble Supreme Court in I.K.Merchants Pvt.Ltd. & Ors. v. The State of Rajasthan & Ors., (Civil Appeal Nos.4560 & 4563 of 2025) would argue that awarding interest is purely the discretion of the Court and while awarding interest the Court must be guided by equitable considerations. In the above decision in paragraph 16 the Apex Court held that :

“Be it noted, while the discretion to award interest, whether pendente lite or post-decree, is well recognized, its exercise must be guided by equitable considerations. The rate and period of interest cannot be applied mechanically or at an unreasonably high rate without any rationale. Though it is not possible to arrive at the actual value of improvement or the inflation on the fair consideration, if paid at the relevant point of time, it is just and necessary that the rate of interest must be a reparation for the appellant. The Court must ensure that while the claimant is fairly compensated, the award does not become punitive or unduly burdensome on the Judgment Debtor. Therefore, t