IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 5TH AUGUST 2010 / 14TH SRAVANA 1932 WP(C).NO. 8557 OF 2009(O) -------------------------------------- OS.66/1998 OF PRL.M.C.,ERNAKULAM .................... PETITIONER(S): ------------------------ THE MOTOR AND GENERAL FINANCE LTD., M.G.F.HOUSE, 17-B, ASAF ALI ROAD, NEW DELHI- 110 002, REPRESENTED BY ITS REGIONAL MANAGER, M.G.F.LTD., M.G.ROAD, ERNAKULAM, COCHIN-11. BY ADV. SRI.G.HARIHARAN SRI.PRAVEEN.H. RESPONDENT(S): --------------------------- P.M.JOY, S/O.MATHAI, PARAPPATTU HOUSE, KOTTAPPADY P.O., KOTHAMANGALAM. ADV. SRI.BIJU ABRAHAM THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX --------------- PETITIONER'S EXHIBITS: ---------------------------------- EXHIBIT P1 A TRUE COPY OF THE EXECUTION PETITION FILED AND NUMBERED AS EP NO.850 OF 2005 IN O.S. NO.66 OF 1998. EXHIBIT P2 A TRUE COPY OF THE ORDER IN I.A. NO.2812 OF 2001 IN AS. NO.223 OF 2001 DATED 4.1.2002 ON THE ADDITIONAL DISTRICT COURT, ERNAKULAM. EXHIBIT P3 A TRUE COPY OF THE OBJECTION DATED 1.2.2006 FILED BY THE JUDGMENT DEBTOR IN EP 850 OF 2005. EXHIBIT P4 A RUE COPY OF IA. NO.3267 OF 2005 IN I.A. NO.2812 OF 2001 IN A.S.. NO.223 OF 2001. EXHIBIT P5 A TRUE COPY OF E.A.. NO.216 OF 2006 FILED BY THE RESPONDENT BEFORE THE MUSNIFF COURT, ERNAKULAM. EXHIBIT P6 A TRUE COPY OF EA NO.558 OF 2007 FILED BY THE RESPONDENT BEFORE THE MUNSIFF'S COURT, ERNAKULAM. EXHIBIT P7 A TRUE COPY OF EA NO.584 OF 2007 FILED BY THE RESPONDENT FOR ATTACHING THE FIXED DEPOSIT BEFORE THE DISTRICT COURT. EXHIBIT P8 A TRUE COPY OF EA NO.856 OF 2007 FILED BY THE RESPONDENT BEFORE THE MUNSIFF COURT, ERNAKULAM. EXHIBIT P9 A TRUE COPY OF THE NOTICE DATED 19.11.2008 ISSUED UNDER ORDER 21 RULE 37 IN E.P. NO.850 OF 2005 IN O.S. NO.66 OF 1998. EXHIBIT P10 A TRUE COPY OF THE OBJECTION TO EXHIBIT P9 FILED BY THE PETITIONER. EXHIBIT P11 A TRUE COPY OF THE ORDER DATED 19.2.2009 IN E.P. NO.850 OF 2005 IN O.S. NO.66 OF 1998. RESPONDENT'S EXHIBITS: ----------------------------------- NIL TRUE COPY THOMAS P.JOSEPH, J. ==================================== W.P(C) No.8557 of 2009 ==================================== Dated this the 05th day of August, 2010 J U D G M E N T This Writ Petition is in challenge of Ext.P11, order passed by the executing court on a dispute between petitioner-judgment debtor and respondent-decree holder regarding calculation of interest. It is not disputed that respondent obtained a decree for recovery of money against petitioner. Petitioner challenged that decree in appeal and as security for grant of stay petitioner deposited certain amount in the first appellate court. Later the appeal was dismissed and the Second Appeal also met with the same result. Respondent filed Ext.P1, execution petition on an earlier execution petition being dismissed for default. In Ext.P1 dispute arose as to whether amount deposited by petitioner as a condition for stay in the first appellate court can be adjusted towards decree debt and if so whether adjustment is towards principal or interest and from which date onwards. Respondent took up the stand that amount deposited by petitioner in the appellate court came to his hand only in January, 2008 and that is the relevant date for calculation of interest. It is the contention W.P(C) No.8557 of 2009 -: 2 :- of respondent that in so far as amount deposited in the first appellate court was as security for stay of execution of the decree and there was no indication at any point of time that the amount could be withdrawn by the respondent and at any rate it is towards the principal it is open to the respondent to adjust the amount towards interest. Learned counsel placed reliance on the decision in Mathunni Mathai v. Hundustan Organic Chemicals Ltd. (1995 [1] KLT 784) and Tosh and Sons India Ltd. v. Khanna (2006 [2] KLT 716) in support of his case. Learned counsel for petitioner contends that records would reveal that even as on 24.09.2005 respondent had preferred Ext.P4, application for issue of cheque before the first appellate court stating that petitioner had no objection in issuing cheque in favour of respondent and hence relevant date for calculation of interest may be taken as 24.09.2005. It is also the contention of learned counsel that dismissal of first execution petition was for default on the part of respondent. 2. I have considered the rival contentions. It is seen that this Court on 22.06.2009 directed parties to file statement giving some particulars. But that direction was not issued on the basis of any finding as to the entitlement of parties vis-a-vis their W.P(C) No.8557 of 2009 -: 3 :- respective claims. Now questions for consideration are: (1) Whether amount deposited by petitioner in the first appellate court as security for stay could be taken as deposit for the decree amount? (2) Whether respondent is bound to adjust the amount first towards principal and then towards interest? (3) From when onwards deposit can be reckoned for the calculation of balance amount due? 3. So far as question Nos.1 and 2 are concerned I must bear in mind that it is not disputed before me that deposit was not towards decree amount. It was as security for stay of execution of decree of the trial court. Indisputably no notice or intimation was given to the respondent at any point of time that such amount can be adjusted towards the amount due under the decree either before or after disposal of the First and Second Appeals. Decisions referred to supra state that even when certain amount is deposited as per direction of the court that cannot be taken as deposit towards decree amount enabling decree holder to adjust it towards principal/interest. Therefore mere deposit of amount in the first appellate court as security for grant of stay of execution cannot mean that it was a deposit W.P(C) No.8557 of 2009 -: 4 :- towards decree amount. 4. So far as the second question whether the said amount is to be adjusted towards principal or interest is concerned settled position of law informs me that it is within the power of creditor to adjust the amount in the way he wishes, either towards principal first or interest as the case may be unless mode of application is stated. I stated that in this case no instruction or direction was given by the petitioner. If that be so it was well within the power of respondent to adjust the amount towards interest due first. 5. What remained is the date from which adjustment is to be reckoned. It is seen from Ext.P4 that respondent has made an application on 24.09.2005 in the appellate court for withdrawal of the amount. It is not disputed that the said application resulted in a dismissal of course not due to any fault of respondent. It is also seen from paragraph six of the order that some attempts were made by respondent in the executing court also to get withdrawal of the amount and ultimately it fructified only in January, 2008. According to the learned counsel for petitioner failure of respondent to get the amount deposited in the first appellate court notwithstanding any objection on the part of W.P(C) No.8557 of 2009 -: 5 :- petitioner in respondent withdrawing the amount was referable laches of the respondent. But I do not find any material on record of any such laches. Decree holder filed E.A.No.558 of 2007 to call for the amount from the first appellate court. There was also another application, E.A. No.584 of 2007 to attach the said amount. But it was open to the petitioner to withdraw the amount at any point of time and pay the same to the respondent. Applications above stated were allowed by the executing court and amount was attached. When request was made to the first appellate court to send the amount to the executing court, Fixed Deposit receipt was made over to the executing court on 25.09.2007 and that could be encashed only in January, 2008. The delay was not on account of any laches on the part of respondent. If that be so respondent is entitled to get interest till date of receipt of the amount in January, 2008. Contentions raised by petitioner in this Writ Petition has to fail. Writ Petition fails. It is dismissed. As to the balance amount due under the decree consequent to my above finding and adjusting amount already paid it is open to the parties to file statement in the executing court which shall decide amount due to the respondent. Statements shall be filed within three weeks W.P(C) No.8557 of 2009 -: 6 :- from the date of receipt of a copy of this judgment. Warrant of arrest issued against Managing Director of petitioner will stand in abeyance until balance amount due is fixed by the executing court and reasonable time is given by that court to deposit the amount found due. THOMAS P. JOSEPH, JUDGE. vsv