1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL ORIGINAL ORIGINAL CIVIL JURISDICTION CIVIL JURISDICTION CIVIL JURISDICTION SUMMARY SUMMARY SUMMARY SUIT SUIT SUIT NO.2061 OF 1982 NO.2061 OF 1982 NO.2061 OF 1982 Vandana Vandana Vandana Enterprises Enterprises Enterprises ...... Plaintiff Plaintiff Plaintiff vs vs vs Automobile Automobile Automobile Production Production Production India Ltd.. Defendant India Ltd.. Defendant India Ltd.. Defendant Ms.S.V.Sonawane Ms.S.V.Sonawane Ms.S.V.Sonawane for for for Plaintiff Plaintiff Plaintiff Mr.Tushar Mr.Tushar Mr.Tushar Bhavsar Bhavsar Bhavsar i.b Crawford Bayley & Co.for i.b Crawford Bayley & Co.for i.b Crawford Bayley & Co.for Defendant Defendant Defendant CORAM CORAM CORAM : : : A.M.KHANWILKAR, J A.M.KHANWILKAR, J A.M.KHANWILKAR, J DATE DATE DATE : 15th March, 2007 : 15th March, 2007 : 15th March, 2007 P.C. P.C. P.C. 1.1.1. This suit for recovery of a sum of This suit for recovery of a sum of This suit for recovery of a sum of Rs.3,05,089.70 Rs.3,05,089.70 Rs.3,05,089.70 with further interest on the with further interest on the with further interest on the principal principal principal sum sum sum of Rs.2,30,780.77 at the rate of 18 % of Rs.2,30,780.77 at the rate of 18 % of Rs.2,30,780.77 at the rate of 18 % p.a. p.a. p.a. from the date of filing of the suit till from the date of filing of the suit till from the date of filing of the suit till judgment judgment judgment and thereafter at such rate as may be and thereafter at such rate as may be and thereafter at such rate as may be awarded awarded awarded by the Court until realisation of the by the Court until realisation of the by the Court until realisation of the amount amount amount and for costs of the suit,has been filed on and for costs of the suit,has been filed on and for costs of the suit,has been filed on the the the basis of 11 hundis issued in favour of the basis of 11 hundis issued in favour of the basis of 11 hundis issued in favour of the plaintiffs plaintiffs plaintiffs between 31st February, 1980 till 13th between 31st February, 1980 till 13th between 31st February, 1980 till 13th November, November, November, 1980. Before institution of the suit the 1980. Before institution of the suit the 1980. Before institution of the suit the plaintiff plaintiff plaintiff filed a Company Petition before this filed a Company Petition before this filed a Company Petition before this Court Court Court claiming an amount of Rs.4,32,003.97 along claiming an amount of Rs.4,32,003.97 along claiming an amount of Rs.4,32,003.97 along with with with interest being Rs.13,532/-. In the Company interest being Rs.13,532/-. In the Company interest being Rs.13,532/-. In the Company Petition, Petition, Petition, total total total claim of Rs,.4,63,535.97 was set up claim of Rs,.4,63,535.97 was set up claim of Rs,.4,63,535.97 was set up against against against the defendants. In the said Company the defendants. In the said Company the defendants. In the said Company Petition, Petition, Petition, pursuant to an order of the Court, the pursuant to an order of the Court, the pursuant to an order of the Court, the 2 defendants defendants defendants deposited an aggragate amount of deposited an aggragate amount of deposited an aggragate amount of Rs.2,99,259.20 Rs.2,99,259.20 Rs.2,99,259.20 in two instalments. The first in two instalments. The first in two instalments. The first instalment instalment instalment was deposited before 14th October, 1981 was deposited before 14th October, 1981 was deposited before 14th October, 1981 inin in the sum of Rs.1,99,295.20 and the second the sum of Rs.1,99,295.20 and the second the sum of Rs.1,99,295.20 and the second instalment instalment instalment before 18th November,1981 in the sum of before 18th November,1981 in the sum of before 18th November,1981 in the sum of Rs.1,00,000/-. Rs.1,00,000/-. Rs.1,00,000/-. The plaintiffs were further The plaintiffs were further The plaintiffs were further permitted permitted permitted to withdraw the entire amount deposited to withdraw the entire amount deposited to withdraw the entire amount deposited by by by way of first instalment in the sum of way of first instalment in the sum of way of first instalment in the sum of Rs.1,99,259.20. Rs.1,99,259.20. Rs.1,99,259.20. However, out of the second However, out of the second However, out of the second instalment instalment instalment deposited by the defendants, the deposited by the defendants, the deposited by the defendants, the plaintiffs plaintiffs plaintiffs were allowed to withdraw only a sum of were allowed to withdraw only a sum of were allowed to withdraw only a sum of Rs.5868.00. Rs.5868.00. Rs.5868.00. In other words, by order dated 12th In other words, by order dated 12th In other words, by order dated 12th October, October, October, 1981, this court permitted the plaintiffs 1981, this court permitted the plaintiffs 1981, this court permitted the plaintiffs toto to withdraw total sum of Rs.2,05,127.20 only. withdraw total sum of Rs.2,05,127.20 only. withdraw total sum of Rs.2,05,127.20 only. Remainder Remainder Remainder amount was ordered to be transferred to amount was ordered to be transferred to amount was ordered to be transferred to the the the proposed suit account of the suit to be proposed suit account of the suit to be proposed suit account of the suit to be instituted instituted instituted by the plaintiffs for recovery of by the plaintiffs for recovery of by the plaintiffs for recovery of balance balance balance principal amount of Rs.2,33,003.97. principal amount of Rs.2,33,003.97. principal amount of Rs.2,33,003.97. 2.2.2. In this background the present suit has been In this background the present suit has been In this background the present suit has been filed filed filed by the plaintiffs is for the recovery of the by the plaintiffs is for the recovery of the by the plaintiffs is for the recovery of the principal principal principal amount of Rs.2,30,780.77. In the amount of Rs.2,30,780.77. In the amount of Rs.2,30,780.77. In the particulars particulars particulars of claim, the plaintiffs have claimed of claim, the plaintiffs have claimed of claim, the plaintiffs have claimed interest interest interest at at at the rate of 18 % p.a. on the principal the rate of 18 % p.a. on the principal the rate of 18 % p.a. on the principal amount amount amount which has been shown as Rs.74,308.93. On which has been shown as Rs.74,308.93. On which has been shown as Rs.74,308.93. On that that that basis, by way of final reliefs, it is prayed basis, by way of final reliefs, it is prayed basis, by way of final reliefs, it is prayed by by by the plaintiffs that a judgment and decree the plaintiffs that a judgment and decree the plaintiffs that a judgment and decree against against against the the the defendants in the sum of Rs.3,05,089.70 defendants in the sum of Rs.3,05,089.70 defendants in the sum of Rs.3,05,089.70 be be be granted with further interest on the principal granted with further interest on the principal granted with further interest on the principal amount amount amount of Rs.2,30,780.77 at the rate of 18 % p.a. of Rs.2,30,780.77 at the rate of 18 % p.a. of Rs.2,30,780.77 at the rate of 18 % p.a. 3 3.3.3. It is not in dispute that no written statement It is not in dispute that no written statement It is not in dispute that no written statement has has has been filed by the defendants in the present been filed by the defendants in the present been filed by the defendants in the present suit. suit. suit. The plaintiffs have produced an affidavit in The plaintiffs have produced an affidavit in The plaintiffs have produced an affidavit in lieu lieu lieu of the examination in chief and also the of the examination in chief and also the of the examination in chief and also the relevant relevant relevant documents to support their claim for documents to support their claim for documents to support their claim for recovery recovery recovery of the principal amount of Rs,2,30,780.77. of the principal amount of Rs,2,30,780.77. of the principal amount of Rs,2,30,780.77. 4.4.4. Counsel for the defendants in all fairness Counsel for the defendants in all fairness Counsel for the defendants in all fairness submits submits submits that in so far as the claim of the that in so far as the claim of the that in so far as the claim of the plaintiffs plaintiffs plaintiffs for the recovery of principal amount of for the recovery of principal amount of for the recovery of principal amount of Rs.2,30,780.77 Rs.2,30,780.77 Rs.2,30,780.77 is concerned, that cannot be is concerned, that cannot be is concerned, that cannot be contested contested contested and the plaintiffs will be entitled for and the plaintiffs will be entitled for and the plaintiffs will be entitled for the the the said relief. However, the contest is only in said relief. However, the contest is only in said relief. However, the contest is only in relation relation relation to to to the grant of interest at the rate of 18 the grant of interest at the rate of 18 the grant of interest at the rate of 18 % p.a. p.a. p.a. as claimed by the plaintiffs. According to as claimed by the plaintiffs. According to as claimed by the plaintiffs. According to the the the defendants, in law, the plaintiffs are not defendants, in law, the plaintiffs are not defendants, in law, the plaintiffs are not entitled entitled entitled for that relief. It is submitted on for that relief. It is submitted on for that relief. It is submitted on behalf behalf behalf of the defendants that as the suit is of the defendants that as the suit is of the defendants that as the suit is founded founded founded on the hundis issued between the parties on the hundis issued between the parties on the hundis issued between the parties and and and that that that the document makes no reference or specify the document makes no reference or specify the document makes no reference or specify any any any rate of interest for the delayed payment, in rate of interest for the delayed payment, in rate of interest for the delayed payment, in such such such a case, the plaintiffs would become entitled a case, the plaintiffs would become entitled a case, the plaintiffs would become entitled for for for interest only in terms of section 80 of the interest only in terms of section 80 of the interest only in terms of section 80 of the Negotiable Negotiable Negotiable Instrument Act, 1881. It is submitted Instrument Act, 1881. It is submitted Instrument Act, 1881. It is submitted that that that in the present case, the unamended provisions in the present case, the unamended provisions in the present case, the unamended provisions of of of section 80 of that Act will come into play section 80 of that Act will come into play section 80 of that Act will come into play interms interms interms whereof the plaintiffs will be entitled to whereof the plaintiffs will be entitled to whereof the plaintiffs will be entitled to claim claim claim maximum 6 % p.a. by way of interest on the maximum 6 % p.a. by way of interest on the maximum 6 % p.a. by way of interest on the principal principal principal amount till the institution of the suit. amount till the institution of the suit. amount till the institution of the suit. 4 ItItIt is submitted that even with regard to the is submitted that even with regard to the is submitted that even with regard to the interest interest interest to be awarded during pendency of the suit to be awarded during pendency of the suit to be awarded during pendency of the suit and and and after the date of judgment and decree, the after the date of judgment and decree, the after the date of judgment and decree, the Court Court Court will be obliged to invoke the provisions of will be obliged to invoke the provisions of will be obliged to invoke the provisions of section section section 34 34 34 of C.P.C. Even that provision specifies of C.P.C. Even that provision specifies of C.P.C. Even that provision specifies maximum maximum maximum rate of interest at 6 % p.a. Counsel for rate of interest at 6 % p.a. Counsel for rate of interest at 6 % p.a. Counsel for the the the defendants therefore defendants therefore defendants therefore, submits that assuming submits that assuming submits that assuming that that that the principal amount became due and payable the principal amount became due and payable the principal amount became due and payable with with with effect and from 29th June, 1980, the effect and from 29th June, 1980, the effect and from 29th June, 1980, the plaintiffs plaintiffs plaintiffs would be entitled to interest on that would be entitled to interest on that would be entitled to interest on that amount amount amount from that date at the rate of 6 % p.a. from that date at the rate of 6 % p.a. from that date at the rate of 6 % p.a. only. only. only. 5.5.5. Counsel for the plaintiffs on the other hand Counsel for the plaintiffs on the other hand Counsel for the plaintiffs on the other hand would would would submit that the plaintiffs would be entitled submit that the plaintiffs would be entitled submit that the plaintiffs would be entitled toto to 18 18 18 % interest p.a. on the principal amount. In % interest p.a. on the principal amount. In % interest p.a. on the principal amount. In view view view of of of the statutory provision, the statutory provision, the statutory provision, it is not possible t is not possible t is not possible toto to countenance this submission. I find substance countenance this submission. I find substance countenance this submission. I find substance inin in the arguments of the defendants that the the arguments of the defendants that the the arguments of the defendants that the plaintiffs plaintiffs plaintiffs will succeed in regard to claim for will succeed in regard to claim for will succeed in regard to claim for interest interest interest on the principal amount only at the rate on the principal amount only at the rate on the principal amount only at the rate specified specified specified by the unamended section 80 of the by the unamended section 80 of the by the unamended section 80 of the Negotiable Negotiable Negotiable Instrument Act, which is 6 % p.a. only. Instrument Act, which is 6 % p.a. only. Instrument Act, which is 6 % p.a. only. This This This is so because the hundis which are pressed is so because the hundis which are pressed is so because the hundis which are pressed into into into service do not specify the rate of interest service do not specify the rate of interest service do not specify the rate of interest payable payable payable for the delayed payment. In such a case, for the delayed payment. In such a case, for the delayed payment. In such a case, by by by virtue of section 80 as applicable at the virtue of section 80 as applicable at the virtue of section 80 as applicable at the relevant relevant relevant time, the plaintiffs would be entitled for time, the plaintiffs would be entitled for time, the plaintiffs would be entitled for interest interest interest only at 6 % p.a. from 29th June, 1980 only at 6 % p.a. from 29th June, 1980 only at 6 % p.a. from 29th June, 1980 onwards onwards onwards till institution of the suit i.e. 9th till institution of the suit i.e. 9th till institution of the suit i.e. 9th 5 February, February, February, 1982. From 9th February, 1981 till the 1982. From 9th February, 1981 till the 1982. From 9th February, 1981 till the judgment judgment judgment and decree which is the time spent for and decree which is the time spent for and decree which is the time spent for pendency pendency pendency of the proceedings in this Court, the of the proceedings in this Court, the of the proceedings in this Court, the plaintiffs plaintiffs plaintiffs will be entitled for the interest again will be entitled for the interest again will be entitled for the interest again atatat the rate of 6 % p.a. in terms of section 34 of the rate of 6 % p.a. in terms of section 34 of the rate of 6 % p.a. in terms of section 34 of C.P.C. C.P.C. C.P.C. The plaintiffs would also be entitled for The plaintiffs would also be entitled for The plaintiffs would also be entitled for interest interest interest at the rate of 6 % interest p.a. from the at the rate of 6 % interest p.a. from the at the rate of 6 % interest p.a. from the date date date of judgment and decree till realisation of the of judgment and decree till realisation of the of judgment and decree till realisation of the amount amount amount in terms of section 34 of C.P.C. in terms of section 34 of C.P.C. in terms of section 34 of C.P.C. 6.6.6. The next question that needs to be addressed is The next question that needs to be addressed is The next question that needs to be addressed is whether whether whether the defendants will have to pay interest the defendants will have to pay interest the defendants will have to pay interest component component component disregarding the amount which is already disregarding the amount which is already disregarding the amount which is already deposited deposited deposited in this Court by the defendants in in this Court by the defendants in in this Court by the defendants in Company Company Company petition which was then transferred to the petition which was then transferred to the petition which was then transferred to the suit suit suit account and later on invested pursuant to the account and later on invested pursuant to the account and later on invested pursuant to the directions directions directions of the Court. In my opinion, the of the Court. In my opinion, the of the Court. In my opinion, the defendants defendants defendants are entitled to claim adjustment from are entitled to claim adjustment from are entitled to claim adjustment from the the the said said said amount. If the decretal amount payable by amount. If the decretal amount payable by amount. If the decretal amount payable by the the the defendants exceeds the maturity amount of the defendants exceeds the maturity amount of the defendants exceeds the maturity amount of the investment investment investment made in terms of the order of the Court made in terms of the order of the Court made in terms of the order of the Court (i.e (i.e (i.e original sum of Rs.94,132/- which stood original sum of Rs.94,132/- which stood original sum of Rs.94,132/- which stood transferred transferred transferred to the suit a/c along with accrued to the suit a/c along with accrued to the suit a/c along with accrued interest interest interest thereon)in that event, the defendants thereon)in that event, the defendants thereon)in that event, the defendants would would would be liable to pay the differential amount. be liable to pay the differential amount. be liable to pay the differential amount. However, However, However, if the decretal amount is less than the if the decretal amount is less than the if the decretal amount is less than the maturity maturity maturity amount amount amount of the said deposit and the accrued of the said deposit and the accrued of the said deposit and the accrued interest interest interest thereon; in that case, the plaintiffs thereon; in that case, the plaintiffs thereon; in that case, the plaintiffs will will will be free to forthwith withdraw the decretal be free to forthwith withdraw the decretal be free to forthwith withdraw the decretal amount amount amount so as to satisfy the decree passed by this so as to satisfy the decree passed by this so as to satisfy the decree passed by this 6 Court Court Court and the surplus amount will have to be made and the surplus amount will have to be made and the surplus amount will have to be made over over over to the defendant. to the defendant. to the defendant. 7.7.7. Accordingly, suit is partly decreed on the Accordingly, suit is partly decreed on the Accordingly, suit is partly decreed on the following following following terms : terms : terms : The The The defendants do pay principal sum of defendants do pay principal sum of defendants do pay principal sum of Rs.2,30,780.77 Rs.2,30,780.77 Rs.2,30,780.77 to the plaintiffs along with to the plaintiffs along with to the plaintiffs along with interest interest interest at the rate of 6 % p.a. on and at the rate of 6 % p.a. on and at the rate of 6 % p.a. on and from from from 29th June, 1980 till realisation 29th June, 1980 till realisation 29th June, 1980 till realisation thereof. thereof. thereof. The The The plaintiffs plaintiffs plaintiffs are entitled to costs of are entitled to costs of are entitled to costs of the the the suit suit suit quantified at Rs.25,000/-. quantified at Rs.25,000/-. quantified at Rs.25,000/-. (A.M.Khanwilkar, (A.M.Khanwilkar, (A.M.Khanwilkar, J) J) J)