Gurdev Singh, J. (Oral)

1. The plaintiffs/respondents - Punjab State Civil Supplies Corporation Limited, filed suit against the defendants/appellants, Basant Food Products and its Sole Proprietor Malkiat Singh, for the recovery of Rs. 1,10,070/- as principal amount and Rs. 86192/- as interest thereon calculated @19.75% per annum w.e.f. 03.05.1997 to 02.05.2000, with quarterly rests, along with future interest at the same rate on the total amount of Rs. 1,96,262/- till the realization of that amount. This amount was claimed by the plaintiffs on account of non-supply of the flour by the defendants for the wheat which was given to him for milling. Against the total wheat of 150 Mt., 100 Mt. was so released in their favour and they milled only 80.5 Mt. wheat keeping the other wheat 19.5 Mt., the price of which was calculated @Rs. 526/- per cwt. and after adding the transportation charges of Rs. 7500/- the above said principal amount is recoverable from them. The suit of the plaintiffs was contested by the defendants, who admitted, in their written statement, that wheat was to be released in their favour for the purposes of milling and they were to give the flour to the plaintiffs. However, they pleaded that 805 cwts. of flour was returned to the plaintiffs and there was '120 cwts. of choker'. During milling, wastage of dust etc. of the weight of 3 cwts. was found and 5 cwts. of wheat was supplied less. A sum of Rs. 71,500/- is due from the plaintiffs on account of the milling charges, besides Rs. 4000/- as freight charges.

2. On the pleadings of the parties, the following issues were framed :-

1. Whether plaintiffs are entitled for recovery of Rs. 1,10,070/- alongwith interest or not? If yes, then interest on what amount at what rate and upto which period? OPP

2. Whether no amount is payable by defendants to the plaintiffs, rather the defendants are entitled to milling charges of Rs. 71,500/- freight charges of Rs. 4000/- and Rs. 27,370/- regarding polythene bags? OPD

3. Relief.

3. Only plaintiffs produced their evidence in support of these issues whereas no evidence was produced by the defendants. After going through that evidence and hearing counsel for both the sides, the learned trial Court decided issues No. 1 and 2 in favour of the plaintiffs and resultantly decreed their suit, vide judgment and decree dated 01.09.2005.

4. Against that judgment and decree, the defendants preferred an appeal but the same was dismissed by the learned District Judge, Patiala, vide judgment and decree dated 01.09.2008.

The present appeal has been preferred by the defendants against that judgment and decree.

5. Vide order dated 2.02.2009, notice of motion was issued to the plaintiffs, which was limited to the prayer of the defendants that the interest so calculated by the Lower Courts was exorbitant and that there was neither any agreement nor the law permits to grant the interest at that rate. The principal amount, as stated by the counsel for the defendants, has already been deposited.

6. I have heard counsel for both the sides.

7. It has been submitted by counsel for the defendants that there was no agreement between the parties to pay the interest at the said rate and even as per the banking rate, this rate of interest so claimed by the plaintiffs is on the higher side. In the absence of any such agreement, the interest could not have been allowed at this rate by the Lower Courts. It has also been submitted by the counsel for the defendants that the interest is to be calculated only on the balance amount after deducting the milling charges, due to the defendants, from the principal amount.

8. The second contention of the counsel for the defendants cannot be considered in view of the fact that notice of motion was issued only regarding the interest.

9. On the other hand, it has been contended by counsel for the plaintiffs that the plaintiff - Corporation borrows the amounts from nationalized banks at high rates and as such it is entitled to recover the interest at that rate.

10. I am not in agreement with the contention raised by counsel for the plaintiffs. The interest can be claimed either by virtue of the agreement entered between the parties or under some statute. Admittedly, there was no such agreement between the parties. The interest cannot be allowed under the Interest Act, 1978 as it is not the contention of the plaintiffs that any notice was served upon the defendants calling upon them to pay the interest on the principal amount. However, the plaintiffs are entitled to recover the interest by virtue of Section 61 of the Sale of Goods Act, 1930. As per that section, the seller has a right to recover the interest on the money paid where the consideration for the payment of it has failed. In the absence of a contract to the contrary, the Court may award interest at such rate as it may think fit on the amount of the price to the seller for the amount of price from the date of the tender of the goods or from the date on which the price was payable. The relation of the parties can be said to be that of the seller and purchaser. When plaintiffs

were entitled to recover the flour of the wheat which was to be milled and kept by the defendants, certainly they are entitled to the interest on the price of that wheat. 11. It may be said that the interest @19.5% per annum is apparently on the higher side. Keeping in view the nature of the transaction between the parties and the banking rate of interest prevailing on the date when the suit was filed, that rate of interest is reduced to 15% per annum without any such quarterly rests. The appeal is disposed of in the above terms. Appeal disposed of.