Case Note & Summary
The appellant, a partnership firm, filed a suit against the Faizpur Municipal Council for recovery of amounts due under a construction contract. The trial court decreed the suit but granted interest at 9% per annum instead of the claimed 18%. The plaintiff appealed only on the interest rate. The High Court examined the contract and found no agreement for 18% interest. It held that the trial court's discretion under Section 34 CPC to award 9% was reasonable and not liable to be interfered with. The appeal was dismissed.
Headnote
A) Civil Procedure - Interest - Section 34 Code of Civil Procedure, 1908 - Rate of Interest - Plaintiff claimed 18% interest on unpaid contract amount - Trial court granted 9% - On appeal, High Court held that there was no contractual stipulation for 18% interest and the rate of 9% was reasonable and just - Appeal dismissed in respect of interest rate (Paras 1-10).
Issue of Consideration
Whether the plaintiff is entitled to interest at the rate of 18% per annum on the amount due from the defendant instead of 9% per annum as granted by the trial court.
Final Decision
The appeal is dismissed. The trial court's decree granting interest at 9% per annum is upheld.
Law Points
- Interest rate
- Section 34 CPC
- Contractual interest
- Reasonable interest
- Municipal contract
Case Details
2011 LawText (BOM) (01) 11
First Appeal No. 510 of 1994
Shri Girish Rane for appellant, Shri S.M.Godsay for respondent
M/s D.S.Mujumdar & K.M.Jain (Partnership Firm)
Faizpur Municipal Council
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Nature of Litigation
Civil appeal against judgment and decree in Special Civil Suit No. 10 of 1991 regarding rate of interest on unpaid contract amount.
Remedy Sought
Plaintiff sought interest at 18% per annum on the amount due from defendant.
Filing Reason
Defendant failed to pay the full amount due under construction contract; plaintiff claimed interest at 18%.
Previous Decisions
Trial court decreed suit but granted interest at 9% per annum instead of 18%.
Issues
Whether the plaintiff is entitled to interest at 18% per annum on the amount due from the defendant?
Submissions/Arguments
Appellant argued that interest at 18% was agreed upon and should be granted.
Respondent contended that no such agreement existed and 9% was reasonable.
Ratio Decidendi
In the absence of a contractual stipulation for a higher rate of interest, the court's discretion under Section 34 CPC to award interest at a reasonable rate (9% per annum) is not liable to be interfered with.
Judgment Excerpts
The present appeal is directed against the judgment and decree dated 31.1.1994... granting interest only at the rate of 9 per cent per annum to the plaintiff instead of 18 per cent per annum.
Procedural History
The plaintiff filed Special Civil Suit No. 10 of 1991 in the court of Joint Civil Judge, Senior Division, Jalgaon. The suit was decreed on 31.1.1994 with interest at 9% per annum. The plaintiff appealed to the High Court against the interest rate.
Acts & Sections
- Code of Civil Procedure, 1908: Section 34
