1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE First Appeal No.96 of 1987 Neelima Enterprises Appellant Vs. Central Bank of India Respondent Mr.P.L.Naik with Mr.Nakhawa for appellant. Mr.P.S.Dani with Mr.H.N.Vakil for respondent. CORAM: B.H.MARLAPALLE & D.B.BHOSALE,JJ. July 11, 2008 ORAL JUDGMENT (PER B.H.MARLAPALLE,J.): 1. This Appeal filed by the defendants is directed against the money decree passed by the learned Jt.Civil Judge, Senior Division, Pune in Special Civil Suit No.53 of 1982 on 4/8/1986. The suit was filed for recovery of an amount of Rs.14,60,188.99 with interest at the rate of 19.50 per cent per annum with effect from 1st February 1982 and in default, sale of the mortgaged property and hypothecated property. In the mean while a prayer was also made for the appointment of receiver and for injunction. After considering the evidence adduced by the plaintiff - Bank (the present respondent) and the defendants as well as their respective averments, the suit came to be decreed as under: 2 "1. The Plaintiff’s claim for Rs.14,60,188.99 is decreed with full costs of the suit against all the Defendants who are jointly and severally liable to pay the same, as partners of the Defendant No.1 and also in their individual capacity. 2. The decretal amount shall carry future interest at the rate of 19.50 per cent per annum from the date 1st February 1982, till the realisation of the same. 3. The amount of Rs.2,000 deposited by the Defendants in their Term Loan Account No.1, the amount of Rs.4,000 deposited by them in their Term Loan Account No.3 and the amount of Rs.2,15,000 deposited by them in their overdraft account, total Rs.2,21,000 is liable to be adjusted in the decretal amount. 4. The Defendants are granted six months time to pay the actual amount due against them after adjusting the repayments made by them during pendency of this suit." 3 2. The Appeal was admitted on 4/2/1987 and the decree was stayed on the condition that the defendants shall pay to the plaintiff an amount of Rs.7000/- every week beginning with 9th February 1987 and this amount was directed to the credit of the principal amount without prejudice to the contention of the Bank. In case of default in paying any three consecutive instalments, the entire decretal amount was to become payable. There is no dispute that the defendants started paying an amount of Rs.7000/- every week and they continued to do so till March 1997. 3. On 25/6/2001 this Court issued the following directions for the reasons stated in the said order: "The respondents are directed to recalculate the amount in the light of the observations made above and submit the same to this Court within four weeks. 1. The respondents to correct the arithmetical mistake in the claim. The claim to be taken as Rs.14,26,726.99. 4 2. The respondents not to charge penal interest. 3. The respondents not to charge any interest on the expenses or incidental charges or legal charges or insurance premium paid. However, it is made clear that the respondents are entitled to recover those charges or incidental expenses incurred by them. 4. The respondents to recalculate the dues or balance on the basis of quarterly rests and not on monthly rests. 5. The respondents to adjust the payments made during the pendency of the suit and the appeal on the dates on which they were made and calculation of the balance to be made accordingly. . The respondents are granted 15% interest per annum from the date of the suit i.e. from 1st February 1982 till realisation. . If the appellants have made any 5 excess payment, the respondents to refund the same with 15% interest per annum from date of last such payment. . The respondents to complete this exercise of calculation within four weeks from today and make a report accordingly to enable us to pass a final decree." 4. On 11/3/2002 the following modifications were made in the order dated 25/6/2001: "It is clarified that from the date of the suit i.e. 1st February 1982 till the date of the decree passed by the trial Court i.e. 4th August 1986 interest to be charged with quarterly rests. However, after the decree till realisation 15 % simple interest to be charged." 5. On 18/6/2004 Review Petition No.8 of 2002 was allowed in terms of para 7 of the said order which reads as under: "In these circumstances, we are of the view 6 that the directions issued by the Court will have to be recalled to the extent to which interest has been directed to be paid at quarterly rests from the date of the suit until the judgment and order of the Trial Court. Save and except for the recalling of the direction in regard to the computation of interest at quarterly rests during the aforesaid period, the rest of the directions are, however, maintained." 6. On 7/2/2006 while hearing this Appeal a further order was passed for appointment of Chartered Accountants and as agreed between the plaintiff and the defendants, Mr.Paras S. Bafna of M/s.P.S.Bafna & Co., Chartered Accountants, Sadashiv Peth, Pune was appointed as the Chartered Accountant to submit a report regarding the liability of the parties in view of the directions passed by this Court on 25/6/2001 and 18/6/2004. The Chartered Account was directed to complete the computation and submit the report in a sealed envelope to the office of this Court. Accordingly vide their letter dated 10/1/2007, M/s.P.S. Bafna & Co., Chartered Accountants submitted the report of calculation of interest in terms of the 7 orders passed by this Court and as referred to hereinabove. The report has been prepared on the following basis: (a) Penal interest not charged. (b) Interest on expenses or incidental charges or legal charges or insurance premium not charged. (c) Interest is calculated as under: (i) From date of disbursement: As per rates in upto 31.01.1982 force as were available from the records produced for our workings (Refer Annexure 1) (ii) From 01/02/1982 onwards 15% simple upto 31/12/2006 interest. . The report concluded that the defendants had paid excess principal amount in the sum of 8 Rs.13,15,106.41. The simple interest at 15 per cent per annum on the said amount upto 31/12/2006 came to Rs.24,99,938.95 thus making a total of Rs.38,15,045.36. 7. There can be no dispute that as per the order passed by this Court on 25/6/2001 the excess amount, if any, received by the Bank pursuant to the interim order passed on 4/2/1987 was directed to be refunded to the defendants with 15 per cent interest per annum from the date of last such payment. The relevant direction in the order dated 25/6/2001 reads as under: ". If the appellants have made any excess payment, the respondents to refund the same with 15% interest per annum from date of last such payment. 8. Mr.Naik, the learned counsel for the defendants stated that the last payment of deposit pursuant to the interim order passed by this Court on 4/2/1987 was made in March 1997 and, therefore, on the excess amount of Rs.13,15,106.41, the interest was payable from April 1987 to 31/12/2006. 9 9. After having gone through the report submitted by the Chartered Accountants, Mr.Dani, the learned counsel for the plaintiff - Bank disputed the said report only on one point viz. the rate of interest payable from the date of disbursement till 31/1/1982. As per Mr.Dani, the interest for the said period was to be paid on the basis of monthly rests and not quarterly rests and on that count Mr.Dani contended that report was required to be corrected / reviewed. We do not see any merit in these arguments. The review order dated 18/6/2004 clearly stated that the order of quarterly rests from the date of suit until the judgment and order of the trial Court was recalled and, therefore, as has been rightly stated by the Chartered Accountants, for the period from 1/2/1982 onwards simple interest at the rate of 15 per cent has been charged and calculated. So far as the period from date of disbursement till 31/1/1982 is concerned, the submissions of Mr.Dani are not supported from record. In the order dated 25/6/2001 this Court observed in para 5, "...Admittedly, the documents which are executed between the parties provide for quarterly rests. It has been pointed out by 10 the learned counsel for the respondents that there is one document in respect of Term Loan No.1 i.e. Promissory Note dated 16th September 1975 which provided for monthly rest. But he concedes that on the same date another document in respect of the said Term Loan No.1 was executed i.e. Deed of Hypothecation. It provided for quarterly rest. There are many documents which are executed thereafter between the parties which provide for quarterly rest. Obviously the partied intended to provide for quarterly rest in respect of all the loans and not for monthly rest." 10. The order dated 25/6/2001 and the subsequent order dated 18/6/2004 passed by this Court has received finality as of now and, therefore, having regards to the said orders, we do not find any error in the report submitted by the Chartered Accountants and as directed by this Court in the order dated 25/6/2001, the defendants are entitled for refund of the excess amount at 15% per annum simple interest. 11 11. In the premises, this appeal is partly allowed in terms of the order dated 25/6/2001 read with the subsequent order dated 18/6/2004 and the plaintiff - Bank is directed to refund to the defendants an amount of Rs.38,15,045.36 (Rupees thirty eight lakhs fifteen thousand forty five & pase thirty-six only) within a period of eight weeks from today. The impugned decree stands modified accordingly and the Registry to issue fresh decree. We also make it clear that from 1/1/2007 till the date of refund the defendants will be entitled for simple interest at the rate of 12 per cent per annum. Costs in the cause. 12. The charge created by the trial Court on the property of the defendants viz. Final Plot Nos.29-A and 2163-B, Sadashiv Peth, Pune shall stand released forthwith. 13. Mr.Dani, the learned counsel for the plaintiff - Bank submitted an oral application to stay the operation of this order for six weeks. However, we do not find it necessary to concede to the request of Mr.Dani as we have already granted eight weeks time for the Bank to pay the amount of Rs.38,15,045.36 12 (Rupees thirty eight lakhs fifteen thousand forty five & paise thirty-six only). (D.B.BHOSALE,J.) (B.H.MARLAPALLE,J.)