HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO APPEAL SUIT No.3234 OF 1992 JUDGMENT: The 3rd defendant in O.S.No.12 of 1987 on the file of the I Additional Subordinate Judge, Visakhapatnam, is the appellant herein. 2. The suit was filed for recovery of a sum of Rs.1,71,275/-, which was said to be the advance amount paid under a contract of sale dated 09.12.1983 executed by the defendants and which could not be enforced as necessary permissions were not obtained and the property was acquired by the Government. The 1st defendant, who filed written statement admitted the transaction and defendants Nos.2 and 3 also admitted the transaction. It was pleaded that the agreement could not be performed due to the fault of the plaintiffs and there is no liability to pay back the amount. 3. On the basis of the above pleadings, the following issues have been framed by the trial Court, for trial: 1) Whether the plaintiff is entitled to recover the suit amount from the defendants? 2) Whether the suit is bad for non-joinder of parties? 3) To what relief? 4. On behalf of the Plaintiff, PW.1 was examined and marked Exs.A.1 to A.6. On behalf of the defendants, DWs.1 and 2 were examined and marked Exs.B.1 to B.4. After considering the evidence on record, the learned I Additional Subordinate Judge has passed a decree for a sum of Rs.1,00,000/- with interest at 12% per annum from 07.11.1986 i.e., date of demand notice till the date of realization. Aggrieved by the said judgment, the present appeal is filed. 5. The points that arise for consideration are: 1) Whether the appellant is not liable to pay the amount? 2) Whether the interest granted by the lower Court is excessive? 6. POINTS: So far as the execution of the agreement and passing of the consideration is concerned, there is not of much dispute and the evidence on record coupled with the agreement of sale Ex.A.1 and endorsement Ex.A.2 proves the same. According to the case of the defendants, there were proposals for acquisition of the property even by the date of the agreement and the plaintiff being fully aware of the same, entered into an agreement. Whereas the plaintiff claims that there was no knowledge of such acquisition. But, whatever may be the reason the agreement could not be pursued because of the acquisition of the land by the Government. Therefore, there cannot be unjust enrichment for the defendants having received the money and when the contract has failed the amount has to be refunded. The lower court has found that the agreement has not provided for any interest to be paid on the amount received by the defendants and however from the date of demand notice i.e., 17.11.1986 interest was granted at 12% per annum. 7. The learned counsel for the appellant contends that the interest was granted at 12% per annum from the date of demand i.e., 17.11.1986 till the date of realization, which is against the provisions of Section 34 of the Civil Procedure Code. Evidently, the suit is one for recovery of money consequent on the failure of the contract. It is not a commercial transaction and there is no agreement to pay interest at any particular rate even under the original agreement. There are no special reasons given by the lower Court for granting the interest at 12% per annum till the date of realization after the decree. 8. Therefore, in view of the above circumstances and keeping in view the submission of both parties the decree of the lower Court so far as it relates to the recovery of Rs.1,00,000/- with interest at 12% per annum from 17.11.1986 till the date of decree is confirmed and so far as the subsequent interest is concerned, the interest shall be at 6% per annum from the date of decree till the date of realization. 9. Accordingly, the Judgment and decree of the lower Court is modified and the appeal is allowed in part. Each party shall bear their own costs. _______________________________ JUSTICE N.R.L. NAGESWARA RAO Date: 11.10.2011 INL