IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 30TH DAY OF MARCH, 2017 BEFORE THE HON’BLE MR.JUSTICE K. N. PHANEENDRA R.S.A NO. 2234/2016 (MON) BETWEEN 1. POST MASTER GENERAL, MAIN POST OFFICE, POLICE THIMMAIAH CIRCLE, BENGALURU – 560 001.
2. SUPERINTENDENT OF POST, MAIN POST OFFICE, HASSAN – 573 201.
3. POST MASTER POST OFFICE, DODDAMETIKURIKE, KANAKATTE HOBLI, ARASIKERE TALUK, HASSAN DIST – 573 201. ... APPELLANTS (BY SRI. B. PRAMOD, ADVOCATE) AND NARAYANA, S/O POOJARY, AGED ABOUT 41 YEARS, HARAIAKATTA MANNUVADDARAHALLI, ARASIKERE TALUK, HASSAN DIST - 573 201 ... RESPONDENT (RESPONDENT SERVED AND UNREPRESENTED.) THIS RSA IS FILED U/S 100 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 04.06.2016 PASSED IN RA NO.9/2012 ON THE FILE OF THE 5TH ADDL. DISTRICT AND SESSIONS COURT, AT HASSAN. ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED 17.12.2011 PASSED IN OS NO.77/2003 ON THE FILE OF SENIOR CIVIL JUDGE AND JMFC, AT ARSIKERE.
THIS RSA COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT This Court on 28.3.2017, after hearing the learned counsel for the appellants, framed the following substantial question of law:
Whether the first appellate Court has committed any serious legal error in decreeing as prayed by the plaintiff, particularly awarding of interest at the rate of 21% p.a., prior to the filing of the suit and also subsequent to filing of the suit till the date of realization of the claim, against Section 34 of CPC and Kisan Vikas Patra Rules 1988.
2. The respondent, in spite of service of notice remained absent before this Court.
3. The learned counsel for the appellants, in support of the above said substantial question of law submitted before the Court that no where in the judgment of the trial Court and the first appellate Court, it is mentioned that there is any contractual liability on the part of the appellants for payment of 21% of interest on the principal amount even if it is due to the respondent. The trial Court and the first appellate Court have not at all considered as to how the plaintiff is entitled for the interest at the rate of 21% as against the statutory principles u/s.34 of CPC. In the absence of contract to the contrary, the courts are governed under the statute and the courts have to apply their mind while imposing interest and while decreeing the suit for money. Therefore, he contended that the first appellate Court has committed serious legal error in awarding interest at the rate of 21%. Though the learned counsel for the appellants contended that the appellants have paid the entire amount due, to the respondent, but after going through the entire materials on record, this Court found that the appellate Court is right in considering that, though the appellants have taken up that contention, but not established the case.
In the above said circumstances, it is just and necessary for this Court to have brief factual aspects of the case and the findings given by the trial Court and the first appellate Court.
4. The plaintiff (respondent herein) Narayana son of Poojary has filed a suit against the appellants (defendants before the trial Court) stating that on 19.4.1994, the plaintiff has purchased three Kisan Vikas Patras through the third defendant having denominatin of Rs.5,000/-, Rs.10,000/- and Rs.10,000/- in Nos.573309, 067003 and 067004. It is the contention that he lost the original Vikas Patras which were due for maturity on 19.10.1999. Therefore, it appears that he made an application before the third defendant for obtaining duplicate copies of the said three Kisan Vikas Patras. It is the further case of the plaintiff that the defendants have refused to issue duplicate Vikas Patras and on the other hand, the third defendant told the plaintiff that he is not entitled to get any money. In the mean time, the plaintiff able to trace the original Kisan Vikas Patras and in fact he presented the same to the third defendant for payment. It is the case of the plaintiff that the defendants have not paid any amount even after the maturity of the said Vikas Patras to the plaintiff. Therefore, he sought for recovery of a sum of Rs.81,800/- along with interest at the rate of 21% p.a., The defendants after their appearance have submitted that the plaintiff has obtained the duplicate Vikas Patras on the ground of originals being lost by him. Thereafter on 6.11.1997, he surrendered the said duplicate pathras and encashed those duplicate Vikas Patras pertaining to him. It is specifically contended that an amount of Rs.20,000/- could be paid across the counter and if the value is more than Rs.20,000/- that may be through cheque or DD. Hence, the third defendant has paid the plaintiff across the counter the entire amount due to him on 6.11.1997 and in support of it, the plaintiff has filed a false suit basing the original Kisan Vikas Patras alleging that he has traced the Vikas Patras later. Therefore, the defendants prayed for dismissal of the suit.
5. On the basis of the above said rival contentions, the trial Court has framed the following:
1. Q¸Á£ï «PÁ¸ï ¥ÀvÀæzÀ ¨Á§ÄÛ 50,000/- gÀÆ¥Á¬ÄUÀ¼À£ÀÄß 1 jAzÀ 3 £Éà ¥ÀæwªÁ¢UÀ¼ÀÄ ªÁ¢ ¸ÁPÀµÀÖÄ ¨Áj PÉýzÁUÀÆå ¸ÀºÀ ¥ÁªÀw ªÀiÁqÀ°®è JAzÀÄ ªÁ¢ gÀÄdĪÁvÀÄ¥Àr¸ÀĪÀgÉÃ?
2. ªÁ¢AiÀÄ zÁªÉUÉ PÁ® ¥Àj«Äw EzÉAiÉÄÃ?
3. zÁªÉAiÀÄ°è PÉýgÀĪÀ ¥ÀjºÁgÀUÀ½UÉ ªÁ¢ CºÀðgÉÃ?
4. AiÀiÁªÀ rQæ E®èªÉà DzÉñÀ?
(1) Whether the plaintiff proves that the defendants in spite of repeated requests and demands by the plaintiff, have not paid the Kisan Vikas Patras amounting to Rs.50,000/-?
(2) Whether the suit is barred by limitation?
(3) Whether the plaintiff is entitled for the relief as claimed?
(4) What decree or order?
Addl. Issue No.1:
(1) Whether the defendant Nos.1 to 3 prove the discharge of the proceeds of Kisan Vikas Patras as pleaded in Para 3 of the written statement?
6. The trial Court has recorded the evidence of PW-1 and marked Exhibits P-1 to P-10. Defendants also examined five witnesses as DWs.1 to 5 and got marked Exhibits D-1 to D-13. The trial Court after bestowing its attention to the oral and documentary evidence, came to the conclusion that the plaintiff has not proved his case. On the other hand, the defendants have proved the discharge of the proceeds of Vikas Patras as pleaded in para 3 of the written statement and consequently, dismissed the suit.
7. The plaintiff being aggrieved, has preferred an appeal before the Addl. District and Sessions Judge, Hassan in RA No.9/2012. Vide judgment dated 4.6.2016, the first appellate Court has allowed the appeal and consequently decreed the suit in toto as prayed for by the plaintiff. The said order of the first appellate Court is being challenged before this Court.
8. Mainly, the first appellate Court has concentrated with regard to additional issue framed by the trial Court regarding discharge of the amount under the said Vikas Patras by the defendant. Therefore, in view of the above said factual aspect, there is no dispute by the defendant with regard to the issuance of three Kisan Vikas Patras in favour of the plaintiff to the tune of Rs.25,000/- in toto and that on maturity, the plaintiff was entitled for an amount of Rs.50,000/-. Therefore, it becomes the burden on the defendants to show whether on the basis of the duplicate Vikas Patras or on production of the original Vikas Patras, they have discharged the amount in favour of the plaintiff that becomes the crux of the point raised.
9. As could be seen from the pleadings of the defendant, it is the defendants case that they have paid the amount by way of cash on 6.11.1997, but the defendants have not produced any document showing the acknowledgement by the plaintiff. They have only shown the entries in their registers with regard to the payment of the said amount. No where in Exs.D3 to D13 produced by the defendants contain the acknowledgement or signature of the plaintiff for having received that amount by way of cash or in any manner. Merely because the defendants have recorded the payment of such amount in their records, at any stretch of imagination, it cannot be construed as an acknowledgement by the plaintiff. Therefore, considering the above said factual aspects and oral evidence of the parties, the first appellate Court has drawn the inference that the defendants have not established the discharge of the money on the basis of the said Kisan Vikas Patras. I also agree with the said opinion expressed by the first appellate Court because of the simple reason that the law requires a document with reference to the acknowledgement of any money. Further added to that, if any amount has to be paid more than Rs.500/-, normally it should be by way of cheque. Though there is no rule as such, but it is a commercial transaction policy maintained throughout the country is that, if the amount crosses Rs.500/-, the normal practice followed is by way of issuance of cheque or DD. In this particular case, if an amount of Rs.50,000/- is paid in favour of the plaintiff as on that date as noted above by way of cash, there must be some acknowledgement from the plaintiff. It is the defence of the defendants that they have taken the acknowledgement on the duplicate Vikas Patras surrendered by the plaintiff at the time of taking money, but those duplicate Vikas Patras which bears the signature of the plaintiff and the plaintiff had acknowledged the said amount are also not produced before the trial Court or the first appellate Court. Therefore, as rightly concluded by the trial Court, there is absolutely no evidence to establish the payment of the said amount of Rs.50,000/-, in favour of the plaintiff. Therefore, the argument of the learned counsel, in my opinion, with reference to the surrender of the said duplicate Vikas Patras and payment of the money and acknowledgement of the plaintiff taken by them is not supported by any materials. Hence, the said argument deserves to be rejected.
10. Coming to the second point with reference to the substantial question of law framed by this Court, it is true that the plaintiff is entitled for an amount of Rs.50,000/- as on the date of maturity of the said Vikas Patra i.e., as on 19.10.1999. But it is the case of the defendant that they have paid an amount of Rs.37,500/- on 6.11.1997 which has not been proved before the Court. Therefore, as on the date of the maturity of the Vikas Patras i.e., dated 19.10.1999, the plaintiff is entitled for an amount of Rs.50,000/- as per the terms of the agreement contained in Vikas Patras and thereafter if the amount is not paid, he is entitled for reasonable interest on the said amount.
11. Of course if there is any contractual obligation on the part of the defendant with regard to the payment of interest, the Court cannot interfere with the contract between the parties and the Court has to allow such rate of interest, as agreed upon by the parties till the date of filing of the suit, but subsequent to filing of the suit, it becomes the discretion of the Court to award interest. In this particular case, in the plaint, the plaintiff has claimed an amount of Rs.81,000/ - from the date of the suit. He calculated that he is entitled for the amount of Rs.50,000/- from 19.10.1999 and thereafter from 19.10.1999 till the date of filing of the suit, he is entitled for an amount of Rs.31,500/- towards interest at the rate of 21% and subsequently also he claimed interest at the rate of 21% from the date of the suit, till realization.
12. The trial Court having dismissed the suit, it has not considered these aspects with regard to the rate of interest. However, the appellate Court has not at all discussed as to how the plaintiff is entitled for interest from the date of maturity of Vikas Patra, particularly at the rate of 21%. The Vikas Patras produced before the trial Court and the copy produced before this Court shows that there is no contractual obligation between the parties with regard to the rate of interest. However, the learned counsel drawn my attention to Rule 13(A) of The Kisan Vikas Patra Rules, 1988. Rule 13(A) of the said Rules reads thus – “13(A) Post Maturity interest – Where repayment of the amount, inclusive of interest, under rule 12 has become due has not been made, interest shall be allowed on the amount due for a maximum period of two years from the date of maturity to the date of repayment of the amount subject to the following conditions, namely:-
(a) The interest shall be simple and shall be calculated at the rate applicable from time to time to savings accounts of the type of single of joint account.
(b) For the purpose of payment of interest, any part of the period which is less than one month shall be ignored.
(c) The interest shall be paid to the depositor in lump sum at the time of repayment of amount due.”
Subsequently, the Government of India in F No.113- 01/2011-SB Order No.311/2011 dated 13.12.2011k has issued a notification to Rule of 13(A) of the above said Rules with regard to the period of two years fixed for admissibility of post maturity interest. The said maximum limit of two years has been removed by virtue of the above said Notification issued by the Government. Therefore, it goes without saying from the above said rule that, the simple interest as the bank would pay as if the amount is deposited in the bank shall be considered by the Court from the date of maturity of the Vikas Patras and the amount which becomes actually due. The first appellate Court has not bestowed its attention even as to how the plaintiff is entitled for an interest at the rate of 21% nor it bestowed its attention to any of the rules as to how the Court can award rate of interest when the plaintiff has failed to prove that he is entitled for such rate of interest as prayed, by way of any contract.
13. In this background, Section 34 of CPC has also to be borne in mind. Section 34 of CPC particularly with reference to interest reads as follows:
34. Interest (1) Where and in so far as a decree is for the payment of money, the Court may, in the 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, 2[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:
1[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 nationalised banks in relation to commercial transactions.”
On plain reading of the above said provisions, it is clear that if the decree is for payment of money and interest, the Court can order interest at the rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit till 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 6% pa. as the Court deems reasonable to such principal amount. Therefore, when the contractual rate of interest is prescribed by the parties, the rate of interest awarded by the Court normally should not exceed the contractual rate of interest if there is any contract between the parties, if there is no contract between the parties, the Court can award reasonable interest by exercising discretion of the court.
14. In the above said rule cited by the learned counsel, the Kisan Vikas Patra Rules, 1988 does not prescribe any specific rate of interest. However, the CPC specifies the minimum rate of interest at the rate of 6% and gives discretion to the Court even to award interest more than 6%, but it should not exceed the rate of interest fixed by the parties. In view of the above said provisions, in my opinion, the first appellate Court has not at all looked into these provisions before awarding interest at the rate of 21%. Therefore, in my opinion, when the courts are guided by the Rules or statutes, they should adhere to the said statutory principles. Applying the above said principles as noted above, under Section 34 of CPC, this Court has to strike a balance as to the rate of interest. Admittedly, no documentary evidence has been produced to show that payment has been made in spite of the defendant taking up the contention that the amount has been paid in the year 1997 itself that shows that the defendants are reluctant to pay any amount to the plaintiff and if possible, they can evade payment to the plaintiff. Therefore, under the above said circumstances, awarding minimum rate of interest would cause great injustice to the plaintiff. Therefore, in my opinion, the normal rate of interest that the courts would pay has to be awarded if that amount is deposited in the Fixed Deposit. Hence, I am of the opinion that awarding of 10% interest on the above said amount from the date of maturity of the Vikas Patras would meet the ends of justice and it is the normal rate of interest that the banks would pay if the amount is deposited in the Fixed Deposit.
15.In the above said facts and circumstances, I answer the substantial question of law in the ‘Affirmative’ and hold that the appellate Court has committed a serious legal error in awarding interest at the rate of 21% from the date of maturity of the Vikas Patras. Hence, the following:
ORDER The Appeal is partly allowed. The judgment and decree passed by the first appellate Court is modified. However, the plaintiff is entitled for the decree in the following manner:
The plaintiff’s suit is decreed for a sum of Rs.50,000/- (Principal amount) and plaintiff is also entitled for interest at the rate of 10% from the date of maturity of those Vikas Patras i.e., from 19.10.1999 and this interest shall be paid till the date of realization of the suit amount. In view of the modification of the decree, the plaintiff is entitled for the cost throughout.
Sd/-
JUDGE PL*