1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 22 OF 2009 WITH CIVIL APPLICATION NO. 19 OF 2009 Mr. Hasmukh Prajapati ........Appellant/Applicant. versus Union of India ........ Respondents. Mr. A.M. Saroagi adv. for the Applicants Mr. Chetan Agrawal adv. for the respondents CORAM: A. P. DESHPANDE, J. DATED : 7th JANUARY, 2009. P.C.: 1. Heard both the sides. By consent of parties taken up for final disposal. 2. Mr. Saraogi the learned counsel appearing for the appellant restricts the challenge in this appeal only to that part of the order passed by the trial Judge which granted interest at the rate of 9% per annum to the respondent Union of India. No other challenge is pressed in service. The rest of the decree is accepted. Few facts that are relevant to adjudicate the issue about grant of interest are narrated herein below. 3. The appellant carries on business of transportation of goods by rail. Union of India is controlling the network of western 2 railway. Pursuant to a tender, the appellant was granted a lease for a period of three years, vide an agreement dated 5-5-2004 which expired on 5-5-2007. Before the expiry of the said period, the appellant filed a suit and claimed that he has a right to operate the lease for a further period of two years from the date of expiry of the lease, in view of the guidelines issued by the government (policy decision) dated 20-3-2006. The guidelines laid down that the lease can be extended only once by two more years at a lease rate of 25% more than the lump sum lease freight rate. Ex-parte interim relief was granted to the appellant and under the interim order, the appellant did continue to operate the lease. Belatedly after about 17-18 months,the respondent filed reply to the Notice of Motion and also filed a Notice of Motion for vacating the stay. The court being conscious of the fact, that there has been delay on the part of the defendants in moving the matter, it chose to grant relief to the plaintiff and directed continuation of the interim order till 5-5-2009. In substance the suit has been decreed. While doing so, the trial court has directed payment of lease rate of 25% more than the lump sum lease freight rate from the date of expiry of the agreement viz. 5-5-2007 onwards which is one of the conditions in the policy formulated by the government, and rather this was the case of the Plaintiff as voiced in the plaint. In the above set of facts, the present appellant submits that the trial court had no jurisdiction to award interest at the rate of 9% per annum on the 3 lease rate of 25% more than the lump sum. The submission is that in a suit instituted by the plaintiff, the court could not have passed a decree against the plaintiff to the extent it relates to the payment of interest. Thus the issue which arises for consideration is whether the trial court was justified in awarding interest at the rate of 9% per annum against the plaintiff in the suit instituted by him. In the facts of the present case, the award of interest seems to be without authority of law. The parties had never agreed for payment of interest on the delayed payment. On the contrary, there was no agreement to continue the lease for a further period of two years between the parties. In this view of the matter, that part of the order passed by the trial court, which goes to award interest at the rate of 9% per annum deserves to be quashed and set aside. 4. In the result, partly allowing the appeal, the direction to pay interest at the rate of 9% per annum is quashed and set aside. The rest of the decree shall continue to hold the field as it is so consented by the learned counsel appearing for the appellant, on instructions from his client, who is present in the court. Decree stands modified to the extent it awards interest. Decree be drawn up accordingly. 5. The appellant shall pay lease rate of 25% more than the lump sum lease freight rate w.e.f. 5-5-2007 onwards till 5-5-2009 within a period of six weeks from today. 6. In view of the disposal of the appeal the civil 4 application does not survive and the same is also disposed of. (A. P. DESHPANDE, J.)