ORISSA HIGH COURT : CUTTACK F.A. No. 76 OF 1999 From a judgment dated 18.8.1998 and decree dated 31.8.19981 passed by Shri B.K. Dash, learned Ist. Additional Civil Judge (Senior Division), Cuttack in Money Suit No. 382 of 1974. ------------- The State of Orissa & others …… Appellants -Versus- Balaram Das …… Respondent. For Appellants : Mr. Goutam Mishra, Addl. Standing Counsel. For respondent: M/s. P.K. Mohapatra, K.K.Mishra-2 & S. Ray. ----------------------- Decided on 02.07.2010 -------------------------- P R E S E N T : THE HONOURABLE SHRI JUSTICE M. M. DAS ------------------------------------------------------------------------------------------ M.M. Das, J. This appeal has been filed against the judgment and decree dated 18.8.1998 and 31.8.1998 respectively. The State and its authorities, who were defendants in Money Suit No. 384 of 1974, are the appellants. The plaintiff-respondent filed the suit for recovery of a sum of Rs. 4, 20,478.74 paise. It was the case of the plaintiff-respondent that as desired by the appellant no.4- Executive Engineer, Public Health Circle, Cuttack, he submitted quotation for the contract work with regard to sheet piling work of Cuttack Sewerage scheme. He also submitted quotation for labour charges on 10.8.1962 and 1.11.1962 respectively. Thereafter, there were various correspondences between the plaintiff- respondent and the appellant no.4. By letter dated 2.3.1963, the appellant no. 4 intimated the plaintiff-respondent to start the contract work immediately and the plaintiff-respondent started execution of the said work after executing an agreement in K-2 Form. The work executed by the plaintiff-respondent was inspected and measured, which were reflected in the Measurement Books. The further case of the plaintiff-respondent is that as the rate was not finalized, agreement in F-2 Form could not be executed for the said work and he was only paid a sum of Rs. 56, 951.91 paise. Several discussions took place thereafter with regard to finalization of the amount to be paid to the plaintiff- respondent. As nothing was done, a representation was made by the plaintiff-respondent to the Government on 16.7.1970 upon which a report was called for. Ultimately, as the Government did not agree for any extra payment and the account of the plaintiff- respondent was not settled, he filed the suit. 2. In the written statement, the defendants- appellants denied the allegations made in the plaint and while pleading that the suit is not maintainable, claimed for dismissal of the suit. After trial of the suit, the learned trial court dismissed the suit by judgment dated 15.1.1977. The plaintiff-respondent 2 preferred F.A. No. 339 of 1977 before this Court. This Court disposed of the said appeal on 12.5.1993 remitting the matter back to the court below with the following observation:- “Plaintiff is to make out his case as to the work done by him for which he is to be paid. There is no clear assertion of the same in the plaint. He has tried to make out his case from lines here and there from the correspondences between the officers of the State Government. Since onus lies on the plaintiff, normally we would have dismissed the suit, as a clear case has not been made out. However, being satisfied that plaintiff has worked for the defendants and is making a grievance that he has not been paid his legitimate dues for the work done, which cannot be said to be unreasonable, we are inclined to give a chance to the plaintiff to make out a specific case and prove the same……..” The plaintiff-respondent was thereafter given an opportunity to amend the plaint and the defendants to file their additional written statement. However, opportunity was given to file documents and to adduce further evidence. The learned court below framed five issues and ultimately in the impugned judgment decreed the suit in part with cost against the defendants declaring that the plaintiff-respondent is entitled to recover a sum of Rs. 1,91,128/- with pendente lite and future interest at the rate of 11% per annum from the date of filing of the suit till the date of realization. The defendants were directed to pay the said amount within a period of three months upon holding that they are jointly and severally liable for the same. 3 3. Though several contentions were raised on behalf of the appellants, but as this Court, during the course of hearing negatived the same, learned counsel for the appellants raised a question with regard to payment of 11% pendente lite and future interest from the date of filing of the suit as has been directed in the judgment and decree. It was contended by Mr. G Mishra, learned counsel for the State that the suit having been originally dismissed and this Court in the First Appeal preferred by the plaintiff-respondent having remitted the matter back by order dated 12.5.1993, pendente lite interest, if any, should have been directed to be paid from 12.5.1993 and not from the date of institution of the suit. 4. Learned counsel for the plaintiff-respondent vehemently contended that pendente lite interest being the interest payable during the pendency of a suit as per section 34 of the Code of Civil Procedure, the same is payable from the date of the suit till the date of the decree. Therefore, he contended that the learned trial court has not committed any error in directing payment of pendente lite interest from the date of institution of the suit and such portion of the decree is not liable to be interfered with in this appeal. Section 34 of the Code of Civil Procedure is as follows: “34. Interest. – (1) Where and in so far as a decree is for the payment of money, the Court may, in the 4 decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent. per annum, as the court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit: Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions. Explanation I. – In this sub-section, “nationalised bank” means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). Explanation II.- For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability. (2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.” 5. It is well settled that payment of interest on the principal sum adjudged, whether pendente lite or future is admittedly on the discretion of the court. It is also a settled position of law that if interest has not been awarded by the trial court, the appellate court should not interfere with the same provided good reasons are assigned for awarding of such 5 interest. In a five Judges Bench decision, the Supreme Court in the case of Central Bank of India v. Ravindra and others, AIR 2001 SC 3095, while dealing with award of interest under section 34 of the Code of Civil Procedure in a suit filed by the Bank for recovery of the loan dues categorically laid down that section 34 C.P.C. is a general in its application and whether it would apply or not and if it would apply then to what extent, would obviously depend on the facts situation of each case. It further held that award of interest pendente lite and post decree is discretionary with the Court as it is essentially governed by section 34 C.P.C. dehors the contract between the parties. In a given case, if the court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the court may exercise its discretion in awarding interest pendente lite and post decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner. 6. Applying the principles laid down in the above case, it would be appropriate to hold that the discretion of the Court under section 34 of the C.P.C. is also available with regard to the period for which pendente lite interest can be awarded. In 6 the facts situation of the present case, where the trial court has not assigned any specific reason as to why pendente lite interest should be awarded from the date of institution of the suit, as this Court finds that the suit was originally dismissed and earlier in the First Appeal, this Court remitted the matter back to the court below for affording an opportunity to the plaintiff to prove its case, it would be fair and judicious in directing payment of pendente lite interest from the date of the order passed by this Court in the First Appeal remitting the matter back to the trial court i.e., 12.5.1977, till passing of the decree. As already held above, this Court is not inclined to interfere with the principal amount adjudged, i.e., Rs. 1,91, 128/-. Admittedly, the liability in relation to the sum adjudged has arisen out of a commercial transaction. Therefore, the proviso to section 34 (1) is applicable to the facts of the present case and the contention of Mr. Mishra, learned counsel for the appellants that the learned court below could not have awarded interest exceeding 6% cannot be accepted. This Court finds that the rate of interest as awarded, i.e., 11% per annum is just and equitable. 7. In view of the above, the appeal is partly allowed by modifying the judgment and decree of the court below to the extent that the appellants-defendants would be liable to pay Rs. 7 1,91,128/- along with pendente lite interest @ 11% per annum from 12.5.1977 till the date of the impugned decree. This Court is not inclined to interfere with regard to the award of future interest from the date of decree till realization. 8. During pendency of this appeal, by order dated 7.7.2000 passed in Misc. Case No. 395 of 2000, this Court modified its earlier interim order dated 16.6.2000 to the extent that the order of stay shall continue subject to the appellants depositing the entire decretal amount before this Court. Pursuant to the said order, the appellants deposited a cheque dated 17.7.2000 amounting to Rs. 7, 05, 786/- in favour of the Registrar (Judicial) of this Court. By order dated 24.7.2000 the Registry was directed to keep the sid amount in a fixed deposit in a scheduled bank for 45 days initially. The said amount while in deposit before this Court, on an application being filed by the plaintiff – respondent, being Misc. Case No. 19 of 2004, this Court by order dated 8.10.2004 allowed the prayer of the plaintiff – respondent for release of part of the said amount, i.e., Rs. 1.5 lakh, on proper identification. Again, by order dated 10.4.2008 passed in Misc. Case No. 61 of 2008 filed by the plaintiff – respondent, a direction was issued to release a further sum of Rs. 2.00 lakhs in favour of the plaintiff – respondent. Office note dated 6.5.2008 shows that at present, 8 an amount of Rs. 8,30,352/- which was available with the Registry has been invested/renewed in State Bank of India, Main Branch, Cuttack and the next date of renewal was 5.5.2009, the maturity value being Rs. 9, 05, 427/-. 9. Hence, it appears that the said amount is in deposit before this Court, which must have increased along with the accrued interest thereon as on date. The decree being under execution in Execution Case No. 8 of 1999 pending before the learned Civil Judge (Sr. Division), Cuttack which has remained stayed pursuant to this Court’s order, the Registrar (Judicial) is directed to transmit the entire amount available with him, to the executing court, who, on calculating the decretal amount, to be paid to the plaintiff decree-holder as per the decree, as modified in this appeal as well as taking into consideration the amount already withdrawn by the decree – holder during the pendency of this appeal, shall make payment of the balance amount to which the decree holder is entitled to in full and final satisfaction of the decree. Any amount, if still remains as balance, shall be refunded to the appellants- judgment debtors. The interest accrued on the deposit made by the Registry of this Court shall be paid/refunded to the parties proportionately. 10. In the result, the appeal is allowed in part. 9 …………………… M.M. Das, J. Orissa High Court, Cuttack. July 2nd, 2010/Biswal. 10