Case Note & Summary
The appellant-plaintiff filed a suit in O.S.No.143/2000 for recovery of Rs.77,658.75 with interest at 18% per annum and costs, arising from a tobacco transaction where the defendant issued a cheque that was dishonoured. The plaintiff also initiated proceedings under Section 138 of the Negotiable Instruments Act. The trial court decreed the suit on 27 July 2007, holding the plaintiff entitled to recover the principal amount with interest at 6% per annum from the date of the tobacco transaction (5 April 1998) till realization. The defendant-respondent appealed in R.A.No.56/2007 before the VI Additional District Judge, Belgaum, who on 29 August 2009 confirmed the recovery of the principal amount but waived the interest. Aggrieved by the denial of interest, the plaintiff filed this Regular Second Appeal under Section 100 of the Code of Civil Procedure, 1908. The High Court framed a substantial question of law: whether the first appellate court was justified in refusing interest to the appellant from the date of suit till payment. After hearing both sides, the High Court held that the first appellate court was not justified in waiving interest entirely. The court noted that the plaintiff had supplied tobacco and the defendant issued a cheque which was dishonoured. The trial court had granted interest at 6% per annum from the date of transaction. The High Court allowed the appeal in part, setting aside the portion of the first appellate court's judgment that waived interest, and restored the trial court's decree granting interest at 6% per annum from the date of suit till realization. The appeal was disposed of accordingly.
Headnote
A) Civil Procedure - Regular Second Appeal - Substantial Question of Law - Section 100 CPC - The appeal was filed against the judgment of the first appellate court which confirmed the recovery of principal amount but waived interest. The High Court framed a substantial question of law regarding the justification of refusing interest. Held that the first appellate court was not justified in refusing interest from the date of suit till payment (Paras 3-5). B) Interest - Recovery Suit - Discretion of Appellate Court - The plaintiff sought recovery of Rs.77,658.75 with interest at 18% per annum. The trial court decreed the suit with interest at 6% per annum from the date of transaction. The first appellate court confirmed the principal but waived interest. Held that the appellate court erred in waiving interest entirely; the plaintiff is entitled to interest at 6% per annum from the date of suit till realization (Paras 2-5).
Issue of Consideration
Whether the first appellate Court was justified in refusing interest to the appellant on the claim made in the suit from the date of the suit till its payment?
Final Decision
The appeal is allowed in part. The judgment and decree of the first appellate court in R.A.No.56/2007 dated 29 August 2009, insofar as it relates to waiver of interest, is set aside. The trial court's decree granting interest at 6% per annum from the date of suit till realization is restored. No order as to costs.
Law Points
- Interest on principal amount
- discretion of appellate court to waive interest
- Section 100 CPC
- substantial question of law
- Negotiable Instruments Act
- 1881 Section 138
