 Kores (India) Limited Vs. The State of Manipur and Ors.

Facts

1. Department of Minor Irrigation, Government of Manipur, the petitioner

company supplied Rig machines to it for a total amount of Rs. 27,55,002.55
out of which a sum of Rs. 22,70,089.55 had been paid with the result that a
balance of Rs. 4,84,913.
2. Petitioner company was compelled to file the instant writ petition to release
an amount of Rs. 4,84,913/- only to the petitioner with interest at the rate of
Rs. 18%
3. During the pendency of the present writ petition, the principal amount
was paid by the State Government.
4. The fact that the said amount was actually paid later on by the
respondents during the pendency of the writ petition, may be, after a
long time shows that the respondents admitted the liability. Considering
the facts as aforesaid, this court is of the view that the petitioner
company is entitled to interest on the said amount for the simple reason
that the petitioner company has been denied the right, for so long, to use
the amount.
5. It has been submitted by the learned counsel appearing for the petitioner
company that the interest has been claimed in the petition itself and
moreover, the principal amount having been paid during the pendency
thereof, there is no need of filing a separate petition claiming interest and
this court can pass an appropriate order for payment of interest by way of
restitution.
6. This court is of the view that the ends of justice will be met if the
respondents are directed to pay the same interest i.e 9% ( based on
other cases) on the said amount.
  Ram Bilash Singh Vs. Respondent: The State of Bihar and Ors.

1. The petitioner has moved the Court for direction in the nature of mandamus
commanding the respondent authorities for making immediate payment of
all retiral dues of the petitioner which has been withheld illegally, difference
of arrears of pension and part of gratuity, which have not been paid to the
petitioner with admissible interest and only pension amount has been
paid
2. “para 15- ….Moreover, the Court would clarify, that in matters relating to
payment of retiral benefits, award of interest on delayed payment would
form an integral part of the relief, even if no separate relief is
claimed/pleaded for the same, as only after the Court takes a view with
regard to the role of the parties concerning any inordinate delay in payment,
obviously, only thereafter would the necessary consequences in law flow,
including a decision on the issue of payment of interest.”
3. We have to award interest at the rate of 9% per annum both on the amount
of pension due and the gratuity amount which are to be paid by the
respondent.
4. in the considered opinion of the Court, the petitioner is also entitled to award
of interest. Factoring in the precedents discussed hereinabove, the Court is
inclined to award simple interest @ 9% per annum to the petitioner from the
date of entitlement till the date of payment with regard to all dues, excluding
any payment(s) which have been made after taking care of the statutory
interest part.
 Mr Anil Singhal vs M/S Alliance Infrastructure (Karnataka High
Court)

1. The Petitioners No.1 to 5 had entered into agreements to sell as well as

construction agreements with M/s Amoga Projects represented by COP No.
79 of 2010 its GPA holder M/s Alliance Springs Constructions Pvt. Ltd. for
purchase of plot and construction of villas. In this regard there were certain
payments made by the petitioners to the respondent.
2. The petitioners exercised their right to resale/buy back of plots and
presented the respective cheques which came to be dishonored with an
endorsement COP No. 79 of 2010 "funds insufficient", though certain
payments were made thereon by the respondent, it is contended that it was
towards principal amount and further amounts due to be paid to the
petitioners amounts to Rs.3,76,27,753/-.
3. The petitioners claiming that the respondent have to make payment of the
aforesaid amount along with interest of 24% got issued a legal notice
under Section 434 of the Companies Act.
4. During the pendency of the above matter, the respondent and/or group
company made payment of amounts to the petitioners. Hence the
petitioners filed an amendment application seeking to include the details
of the amounts paid, date of receipt and the interest accrued thereon.
The said amendment has been allowed and the relevant amendment has
been carried out.
5. Though the principal amount has been paid, the interest amount on the
principal has not been paid, which has been quantified, by way of
amendment in para 16B of this petition, in respect of each of the
petitioners and therefore COP No. 79 of 2010 it is required that the
respondent make payments of the interest amount. 12.4. The interest
amounts are also a debt due and liable to be paid by the respondent and
as such the petitioners can continue with the above petition despite the
principal amount having been paid.
 State Bank of Bikaner and Jaipur and Ors. v. Abdul Wahid and Ors.

1. Amount claimed in plaint deposited during pendency of suit--Single

Judge did not allow the pendente lite and future interest in view of the
decision of Central Bank of India v. Aman Travels and Ors.--Hence
Second Appeal.

2. Para 4… “ Merely because the amount claimed in the plaint was paid
during the pendency of the suit did not absolve the defendants of their
liability to pay inter- est till the entire dues of the Banks were cleared.
The loan transactions were in the nature of commercial transactions and
the parties were bound to honour the agreed terms regarding payment of
interest.”

5. We have given careful consideration to the issue involved. A plaintiff who

approaches the Court includes in the plaint the amount due up to the date of
the institution of the suit and pays Court-fee accordingly. The plaint
normally contains a prayer for award of pendente lite and future interest till
the date of payment of the decretal amount because on the date of the
institution of the suit no plaintiff is in a position to know as to when
ultimately the decree is going to be passed in the suit and for how much
amount. Pendente lite and future interest is, therefore, left to the Court. The
trial of a suit may take its own time and the liability of the defendant to pay
interest for the period when the amount remains unpaid does not cease. In
normal course, interest and costs follow the event i.e., the party who
succeeds must get interest for the period for which the suit remained
pending i.e., up to the date of decree and future interest up to the date of
payment as well as costs of the litigation. The course adopted by the learned
single Judge in Central Bank of India v. Aman Travels and Ors. (supra)
results in injustice because the defendant gets the benefit of avoiding
payment of interest for the period for which the suit remained pending. For
the period for which the suit remains pending the plaintiff cannot be blamed
or made to suffer. Likewise, the defendant cannot be allowed to take unfair
advantage of protracting trial of a suit.
6. So far as the legal procedure in cases . where the defendant chooses to
pay the suit amount during the pendency of the suit is concerned, the same is
contained in Order XXIV of the Code of Civil Procedurer. This provision
was unfortunately not brought to the notice of the learned single Judge
deciding the case of Central Bank of India v. Aman Travels and Ors.
(supra). As per the provisions of Order XXIV when the defendant chooses to
deposit in Court a sum of money towards satisfaction of the claim in suit,
notice of such deposit has to be given to the plaintiff. Interest will cease to
run to the extent of amount deposited only on notice of deposit being served
on the plaintiff. Rule 4 of Order XXIV further contains a pro vision that if
the plaintiff feels that his entire claim in suit is still not satisfied he may
prosecute the suit for the balance amount at his own risk and cost. In view of
the provisions of Order XXIV, C.P.C. the proper course for the Court in
cases where the defendant deposits the amount for the claim in suit is to pass
a decree for a particular amount and then record satisfaction of the decree
to the extent the amount is deposited in the Court. A civil suit has to
culminate in a decree, whether it is a decree of dismissal of suit or it is a
decree in favour of the plaintiff allowing his claim in suit. On deposit of the
amount claimed in the suit by the defendant during the pendency of the suit
the trial Court ought to have passed a decree. Thereafter, the Court had to
record satisfaction of the decree to the extent of payment or deposit of the
amount in the Court by the defendant. Since there has to be a decree,
Section 34, C.P.C. would be attracted. The Court could advert to the
question of grant of interest pendente lite and future as per Section 34 of the
Code of Civil Procedure. The Court had the power to consider the question
of grant of interest as per the provisions of Section 34, C.P.C., The question
of payment of interest has not been considered by the respective trial Courts
at all, in view of the decision in Central Bank of India v. Aman Travels and
Ors. (supra). All the cases are liable to be remanded back to the concerned
trial Courts for adjudicating the question of interest as per the facts of
individual cases. The cases be listed before the concerned Courts for this
purpose expeditiously.”
  P.S. Sethuraman Vs P. Elavazhagan

1. Revision petition filed to stop all the proceedings as the parties have
entered into compromise by the way of payment of default amount.
2. In case if the trial is already over and the accused is convicted and
during the pendency of the appeal preferred by the accused, if the
accused makes the payment of cheque on his own, the conviction cannot
be set aside on the ground of the cheque amount paid, unless the
complainant agrees and comes forward for compounding the offence.
3. If the trial Court comes to the conclusion that the accused is guilty, then
it is open to the learned Judicial Magistrate to take into consideration
about the payment made by the accused and also take into consideration
the other factors and to show leniency while sentencing the accused.

 D. Purushotama Reddy and Ors. Vs. K. Sateesh

A suit for recovery of money due from a borrower indisputably is maintainable at

the instance of the creditor. It is furthermore beyond any doubt or dispute that for
the same cause of action a complaint petition under terms of Section 138 of the Act
would also be maintainable.
 State Bank of India Vs.Rajasthan Iron and Steel Manufacturing Works
and Ors.

1. Deprivation of pendente lite and future interest on the ground that the
Defendants have deposited the entire amount of suit claim of Rs.
30,89,109.30 is being challenged by the Applicant-Bank in this Appeal.
2. The Partnership firm through their Partners Defendant Nos. 2 to 4 were
granted different loan facilities by the Applicant-Bank during the period
from 16.10.1979 to 29.5.1980. The other Defendants are the Guarantors and
the Legal Representatives of one of the Guarantors who is now dead. It was
challenged by the Applicant-Bank that the Defendants in spite of
confirmation letters from time to time and in spite of demands failed to pay
the dues which were calculated at Rs. 30,89,109.30 inclusive of interest,
3. OBSERVATION :

11. The facts in S.B. Civil First Appeal 48/88 disposed of on 9.8.1988 by
Rajasthan High Court (appearing in the Appeal Paper Book) were that the
Bank had filed Suit No. 173/86 for the recovery of Rs. 42,106.66 against the
respondents. The respondents during the pendency of the said suit made
various payments to the plaintiff Bank. The entire amount claimed in the suit
was thus paid. With the result that no money decree was passed against the
respondents. It was held by the Rajasthan High Court that when there was
no decree passed by the Trial Court for the payment of money, the
provisions of Section 34 of Code of Civil Procedure were not attracted.
Consequently, the pendente lite and future interest was not awarded to the
Bank. The decision in my opinion does not lay down any proposition of law.
The peculiar facts in the said case prompted the High Court in Appeal to
disallow pendente lite and future interest.

12. Moreover, the decision of Rajasthan High Court was much earlier to
the special enactment of Recovery of Debts Due to Banks and Financial
Institutions Act, 1993. Scope and object of the Act are quite different.
Principles of natural justice necessitate in appropriate cases awarding of
future interest.
13. Coming now to applicability of Section 34 or Order XXXIV of CPC, Mr.
Parth Sarthy, the learned Advocate on behalf of the defendants could not
urge that Section 34 of CPC or the principles underlying it are not
applicable to the suits filed by Banks and Financial Institutions for recovery
under the Act. That apart it is abundantly clear that the provisions of the Act
have the overriding effect vis-a-vis. other Acts. In other words if any
provision of Rule in our Act is inconsistent with any other law then the
provisions of this Act would prevail. Such an overriding effect is enacted in
Section 34 of the Act. The intention of this provision is to provide the
Tribunal as well as the Appellate Tribunal with adequate power in order to
achieve the objective laid down in the Preamble of the Act. Provisions of
Section 34 of CPC cannot be said to be inconsistent with the Act. In that
case, they are very well applicable to the Banks when they prefer an
application under Section 19 of the Act for recovery of 'debt'.

14. The expression "decree for payment of money" in Section 34 of CPC is

not used in any technical or restrictive sense. It means every decree by
which payment of money is directed. The expression is not to be understood
as a technical expression with some reservation. Even if the entire suit claim
is paid or deposited, the suit is not liable to be dismissed. On the contrary it
is liable to be decreed and the amount paid is liable to be adjusted towards
the decree. The principle of Section 34 of CPC is clearly explained though
with reference to the powers of the Arbitrator and under the Arbitration Act
in the case of Secretary, Irrigation Department of India v. G.C. Roy,
reported and cited by Mr. Bhambhalani in MANU/SC/0142/1992 : AIR 1992
(SC) 732 (Para 43) to the effect. "A person deprived of the use of money to
which he is legitimately entitled has a right to be compensated for the
deprivation, call it by any name. It may be called interest, compensation or
damages. This basic consideration is as valid for the period the dispute is
pending before the Arbitrator as it is for the period to the Arbitrator
entering upon the reference. This is the principle of Section 34 of CPC and
there is no reason or principle to hold otherwise in the case of arbitration."

15. In view of the above sound proposition of law propounded by the

Supreme Court and also under the principles of natural justice the
 defendants cannot take advantage of the unreported ruling of the Rajasthan
High Court. Even otherwise as observed above the facts of the case relied
upon were quite different than the facts with which we are concerned. If the
interpretation is accepted then the provision of Section 34 as well as of Rule
11 of Order XXXIV of Code of Civil Procedure and all the provisions of
Interest Act can very well be circumvented or made redundant. Borrowers
can protract the proceedings for years together and then on one fine
morning deposit the amount and say that they are not liable to pay pendente
lite as well as future interest. The entire banking system will collapse if the
borrowers are encouraged to make the provisions and the agreements
nugatory.

4. Defendant Nos. 1 to 7 either jointly and/or severally shall pay Rs.

30,89,109.39 with future interest at the simple rate of 13 per cent per annum
from the date of suit i.e. from 26.10.85 till realisation of the amount.
However, the liability of defendant Nos. 5 to 7 is restricted to Rs.
28,99,884.38 with future interest thereon at the same rate of 13 per cent per
annum from the date of suit till realisation of the amount.
 State Bank of India Vs. P.K. Sethi and Ors.
1. This is a suit for recovery of Rs. 1,73,508.87 by the plaintiff from the
defendants.
2. Counsel for the plaintiff, under instructions from the plaintiff ,-Bank, states
that during the pendency of the suit the defendants have paid the aforesaid
amount of Rs. 1,73,508.87 claimed in the suit to the plaintiff-Bank and only
the question regarding pendente lite interest is to be considered now in this
suit.
3. PETITIONER ASKED FOR INTEREST AT THE RATE OF 12.5%
4. OBSERVATION: I am of the opinion that since the defendants have paid
the amount claimed in the suit during the pendency of the suit and having
regard to overall circumstances of the case, it will be just and appropriate if
the defendants are asked to pay simple interest of the suit amount at the rate
of 6% p.a. from the date of institution of the suit till they made the entire
payment of the suit among to the plaintiff-BanK.