Whether plaintiff is entitled to get interest on decretal amount in suit for malicious prosecution?

 Under Section 34 of the Code the Court has a discretion to order interest when "a decree is for the payment of money". The learned Counsel for the plaintiff relied upon the judgment of the Division Bench of the Madras High Court in Ramalingam Chettiyar (supra) to urge that the expression "money" should not be understood in a limited sense of an unascertained sum. It was held by the Division Bench in that case that a decree for payment of damages was also a decree "for the payment of money" as contemplated by Section 34 of the Code. This judgment has been subsequently followed by the Division Bench of the Kerala High Court in K.S.E. Board (supra). Following the view as taken by the Division Bench of the Madras High Court, it is held that a decree for payment of money would also include a decree for grant of damages. On that count the plaintiff is entitled to claim interest on the said decree from the date of filing of the suit. It is by now well settled that the grant of interest pendente lite is a matter within discretion of the Court and its grant is not limited only to commercial transactions. Reference in that regard can be made to the decision in Vikram Somaji Dhabale (supra). There has to be a justifiable reason therefore to deny a successful plaintiff the grant of pendente lite interest. In the facts of the present case, there does not appear to be any reason whatsoever to deny the plaintiff that relief. Though it was urged on behalf of the defendant Nos. 1 and 2 that they could not be blamed for the delay in deciding the proceedings, the same cannot be a reason to deprive the successful plaintiff the fruits of interest pendente lite. The appellate Court without assigning any reason did not grant interest pendente lite. Substantial question of law No. 3 is answered by holding that the plaintiff is entitled to interest on the decreetal amount from the date of filing of the suit.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Second Appeal No. 63 of 2018 and Cross Objection/Appeal No. 22 of 2018 in Second Appeal No. 63 of 2018

Decided On: 29.06.2018

 Rajendra  Vs. Ashish and Ors.

Hon'ble Judges/Coram:

A.S. Chandurkar, J.

Citation: 2019(4) MHLJ 451

Print Page

How to calculate interest if decretal amount deposited in court is kept in FDR?

When the matters were pending before the High Court, there was a direction vide order dated 04.02.2003 to deposit the Principal amount before the High Court. The amount was deposited on 03.03.2003. Subsequently, by order dated 22.05.2003, the High Court, on the request made by the respondent, directed the Court deposit to be made as a Fixed Deposit in a nationalist bank.

Placing reliance on the decision of Himachal Pradesh Housing and Urban Development Authority and Anr. Vs. Ranjit Singh Rana reported in (2012) 4 SCC 505, it is contended by the learned counsel appearing for the appellants that once the amount is deposited in Court, there is no liberty to pay interest in terms of the award.

Paragraph 15 of the Judgment reads as under :-

"The word 'payment' may have different meaning in different context but in the context of Section 37(1)(b); it means extinguishment of liability arising under the award. It signifies satisfaction of the award. The deposit of the award amount into the Court is nothing but a payment to the credit of the decree-holder.

In this view, once the award amount was deposited by the appellants before the High Court on May 24, 2001, the liability of post-award interest from May 24, 2001 ceased. The High Court, thus, was not right in directing the appellants to pay the interest @18% p.a. beyond May 24, 2001." In the present case, we find that the amount was to be deposited in a Fixed Deposit at the request made by the respondent and it is not seen that the respondent has made any request before the High Court for withdrawal of the amount deposited as per the directions by the High Court. However, it is submitted that the appellants have not deposited the full amount in terms of the award.

In the above facts and circumstances of the case, we are of the view that the appellants shall be entitled to interest as per award from the date of award till the principal amount was deposited in the High Court on 03.03.2003. From the said date of 03.03.2003 till it was withdrawn, the respondent shall be entitled only to the interest accrued on the principal amount in terms of the Fixed Deposit made as per the direction by the High Court.

Union of India & ANR Vs. M.P Trading & Investment RAC. Corp. Ltd.

[Civil Appeal Nos.8077-8079 of 2015 @ Special Leave Petition (C) No. 36013-36015 of 2013]

Citation:2016(4) ALLMR 490 SC

Print Page

Whether contempt proceeding or breach of injunction proceeding can be initiated against garnishee who fails to pay decretal amount?

 At all events, if a garnishee, or a defendant, who is directed to pay any sum of money, does not pay the amount, the remedy is to levy execution and not in an action for contempt or disobedience/breach under order 39 Rule 2A. This is evident from Rule 46B of Order 21 read with Rule 11A of Order 38 of the Code. Contempt jurisdiction, either under the Contempt of Court Act, 1971, or under Order 39 Rule 2A of the Code, is not intended to be used for enforcement of money decrees or directions/orders for payment of money. The process and concept of execution is different from process and concept of action for disobedience/contempt.

Supreme Court of India

Food Corporation Of India vs Sukh Prasad on 24 March, 2009

Bench: R.V. Raveendran, Markandey Katju

Reportable

CIVIL APPEAL NO.380 OF 2007

Citation:AIR 2009 SC 2330

Print Page

Whether company and its employees can made liable to pay decretal amount jointly and severally?

Plaint as filed seeks joint and several relief against defendant no.1 Company and defendant no.2 Shri Sinha. Shri Sinha is stated to be its General Manager. When purchase orders are placed by company and contract is with Company, it is clear that there cannot be any other contract or independent contract with Shri Sinha, General Manager. On the strength of the contract, the relief in summary suit could have been asked for only against defendant no.1 Company. Even if Shri Sinha is treated as General Manager, then also relief will have to be against the Company only. However, prayer clause in plaint expressly seeks a joint and several decree against both the defendants. If the decree is envisaged against only Company, it cannot be viewed as joint and several.

Bombay High Court

Mr. S.K. Agrawal vs Mrs. Varsha A. Maheshwari on 5 January, 2011

Bench: B. P. Dharmadhikari

Citation;2011 (2) MHLJ 462 Bom

Print Page

In execution proceeding, court can only sell part of property of JD which is sufficient to satisfy decretal amount

The provision contains some significant words. They are "necessary to satisfy the decree". Use of the said expression clearly indicates the legislative intent that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation. (See Takkaseela Pedda Subba Reddi v Pujari Padmavathamma (AIR 1977 SC 1789). In all execution proceedings, Court has to first decide whether it is necessary to bring the entire property to sale or such portion thereof as may seem necessary to satisfy the decree. If the property is large and the decree to be satisfied is small the Court must bring only such portion of the property the proceeds of which would be sufficient to satisfy the claim of the decree holder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without violating any provision of law only such portion of the property should be sold. This is not just a discretion but an obligation imposed on the Court. The sale held without examining this aspect and not in conformity with this mandatory requirement would be illegal and without jurisdiction.1

Supreme Court of India

Takaseela Pedda Subba Reddy vs Pujari Padmavathamma & Ors on 28 April, 1977

Equivalent citations: 1977 AIR 1789, 1977 SCR (3) 692

BENCH:

FAZALALI, SYED MURTAZA

BHAGWATI, P.N.

Print Page

General rule of appropriation towards a decretal amount

 From what has been stated in the said decision, the following principles emerge:

a) The general rule of appropriation towards a decretal amount was that such an amount was to be adjusted strictly in accordance with the directions contained in the decree and in the absence of such directions adjustments be made firstly towards payment of interest and cost and thereafter towards payment of the principal amount subject, of course, to any agreement between the parties.

b) The legislative intent in enacting sub-rules 4 and 5 is clear to the pointer that interest should cease to run on the deposit made by the judgment debtor and notice given or on the amount being tendered outside the Court in the manner provided in Order XXI Rule 1 sub-clause (b).

c) If the payment made by the judgment debtor falls short of the decreed amount, the decree holder will be entitled to apply the general rule of appropriation by appropriating the amount deposited towards the interest, then towards cost and finally towards the principal amount due under the decree.

d) Thereafter, no further interest would run on the sum appropriated towards the principal. In other words if a part of the principal amount has been paid along with interest due thereon as on the date of issuance of notice of deposit interest on that part of the principal sum will cease to run thereafter. e) In cases where there is a shortfall in deposit of the principal amount, the decree holder would be entitled to adjust interest and cost first and the balance towards the principal and beyond that the decree holder cannot seek to reopen the entire transaction and proceed to recalculate the interest on the whole of the principal amount and seek for re-appropriation.

Supreme Court of India

Bharat Heavy Electricals Ltd. vs R.S.Avtar Singh & Co. on 5 October, 2012

Author: …..……….…………………………...J.

Bench: B.S. Chauhan, Fakkir Mohamed Kalifulla

Print Page