R.S.A.No.3441 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No.3441 of 2009 Date of Decision : 25.09.2009 M/s Karamveer Building Material Supplier ...Appellant Versus M/s Babu Ram Harish Chander ...Respondent CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA Present: Mr. O.P.Sharma, Advocate, for the appellant. HEMANT GUPTA, J. (ORAL) The defendant is in second appeal aggrieved against the judgment and decree passed by the learned first Appellate Court, whereby decree for the recovery of Rs.1,25,960/- alongwith pendente lite interest at the rate of 12% per auum on the aforesaid amount and future interest at the rate of 6% per annum from the date of decree till its actual payment, was granted. After hearing the learned counsel for the appellant, I am of the opinion that the following substantial question of law arises for consideration by this Court : "Whether the appellant is liable to pay interest at the rate of 24% and 12% and 6% per annum to the respondent, when there is no agreement between the parties to make such payment of interest?" The facts, which are relevant for the present appeal are that the plaintiff alleges to have supplied building material to the defendant on credit basis against the various bills amounting to Rs.1,73,650/-. A sum R.S.A.No.3441 of 2009 2 of Rs.65,290/- was allegedly paid by the defendant from time to time and the total balance outstanding was Rs.1,08,360/-. The plaintiff claimed the aforesaid amount by way of the present suit alongwith interest at the rate of 24% per annum w.e.f. 1.1.2004 to 31.7.2004 and future interest at the rate of 24% per annum w.e.f. 1.8.2004 till its realization. Learned trial Court dismissed the suit, but the learned first Appellate Court found that Bills Exs.P-1 to P-18 show that the building material worth Rs.1,73,650/- was purchased by the defendant during the period from 3.5.2003 to 10.12.2003. Ledger account Ex.P-19 shows that a total sum of Rs.65,290/- has been paid by the defendant and the balance amount was Rs.1,08,360/-. Learned first Appellate Court has also taken into consideration the confirmation of accounts Ex.P-20, proved by PW-1. Such balance confirmation has been compared by PW-2, hand writing and finger print expert with the signatures of the defendant on the written statement and vakalatnama. As per the report Ex.PW2/6, it was found that the disputed signature and the signature on Ex.P-20 are of one and the same person. Learned first Appeallate Court noticed that word 'not' in the statement of PW-2 Kamal Kant Khandelwal seems to be a typographical omission as the report Ex.PW-2/6, which is produced by the said witness is to the effect that the disputed signature and the signatures on the written statement and the vakalatnama are of the same person. Learned first Appellate Court has even made is own comparison of disputed signature with the admitted signatures to return a finding that the signature of Ex.P-20 are of the same person, who has signed the written statement and the vakalatnama. In view of the above, I do not find any patent illegality or R.S.A.No.3441 of 2009 3 irregularity in the findings recorded by the learned first Appellate Court, holding that a sum of Rs.1,08,360/- is due and payable by the defendant. Learned first Appellate Court has granted interest of Rs.15,400/- at the rate of 24% w.e.f. 1.1.2004 to 31.7.2004 as also the costs of Rs.2200/- for serving legal notice Ex.P-24. Still further, the learned first Appellate Court has granted pendente lite interest and future interest on the amount of Rs.1,25,960/-, which is inclusive of Rs.15,400/- as the amount of interest and cost of Rs.2200/-. I find that the grant of interest of Rs.15,400 at the rate of 24% per annum and the amount of cost of Rs.2200/- is not fair, reasonable and not permissible under Section 34 of the CPC. The Civil Court can grant interest on the principal sum adjudged and not on the amount of interest as it will amount to granting of compound interest on the amount due in the absence of contract that interest amount shall stands merged with the principal amount. Still further, the grant of interest at the rate of 24% is harsh. There is no evidence that 24% rate of interest is the market rate of interest. Consequently, I am of the opinion that the decree regarding payment of interest requires to be modified. Therefore, the decree passed by the learned first Appellate Court is modified so as to grant a decree for recovery of Rs.1,08,360/-. The plaintiff shall be entitled to interest at the rate of 12% per annum for the period from 1.1.2004 to 31.7.2004 i.e. a sum of Rs.7700/-. The plaintiff shall also be entitled to pendente lite interest at the rate of 12% per annum on the amount of Rs.1,08,360/- and future interest at the rate of 6% from the date of decree till payment on the principal sum adjudged R.S.A.No.3441 of 2009 4 i.e. Rs.1,08,360/-. Still the decree is being modified in respect of the amount of interest alone, the serving of notice will probably cost the plaintiff more than the quantum of interest reduced. Therefore, the decree has been modified without notice to the plaintiff. With the said modifications, the appeal stands disposed of. 25.09.2009 (HEMANT GUPTA) Vimal JUDGE