At, High Court of Delhi
By, THE HONOURABLE MR. JUSTICE R.C. LAHOTI
For the Appearing Parties: R.K. Kataria, R.P. Dave, Advocates.
R. C. LAHOTI, J.
(1) THIS is a suit filed by the plaintiff-Bank seeking recoveryof Rs. 1,94,766. 20p with costs and interest pendente lite and future calculated at therate of 14 per cent per annum with quarterly rests.
(2) THE defendant No. 1 is a partnership firm with defendants Nos. 2 to 4 as its partners. Approached by the defendants Nos. 2 to 4, the plaintiff bank allowed credit facilities to defendants on hypothecation of raw material, goods-finished and semi-finished and machinery. The credit facilities extended by the bank where by way of cash credit hypothecation limit. Other defendants had stood as sureties.
(3) IT is not necessary to make a detailed discussion of the defence raised and several documents brought on record because of major part of the controversy between the parties having been settled amicably during the course of these proceedings because of the defendants having taken a very reasonable stand and adopted a compromising attitude. On 16. 10. 90, the defendants stated before the court that they were prepared to pay the suit amount on the condition of the interest pendente lite being waived. It was further stated that a sum of Rs. 25,000had already been paid to the plaintiff-bank on 26. 8. 89, i. e. , during the pendency ofthis suit. What exactly transpired on 16. 10. 90, it would be better to read from the following extract of proceedings as recorded by the Court :
" Mr. Dave says that the defendants are prepared to pay the suit amount on the condition that interest pendente lite is waived. He further says that a sum of Rs. 25,000. 00 has already been paid to the plaintiff-bank on 26. 8. 1989. Mr. Dave further says that this payment shall be made within a period of three months. Mr. Nandwani says he has instructions not to accept this statement as the bank is not prepared to give up the claim of interest. Mr. Dave further says that question of pendente lite interest he will leave to the Court. In the circumstances, I will, therefore, direct that let the balance suit amount be paid within three months as prayed. After that, question of pendente lite interestwill be gone into with reference to the written statement and other document son record. To be listed on 11/02/1991 for further proceedings. "
(4) THE proceedings thereafter recorded by the Court go to show a genuine effort having been made by the defendants Nos. 1 to 4 at clearing their existing liability, several amounts were deposited with the bank. Though piecemeal, yet the suit amount has been deposited with the plaintiff-bank during the pendency of the suit. On 16. 10. 92, the plaintiff-bank filed a statement of account in the Court acknowledging the receipt of the suit amount on various dates. The Court formed an opinion that the only question which had remained to be decided was with regard to interest and costs of the suit. Accordingly, following two issues were framed:-
1. Whether the plaintiff is entitled to interest pendente lite, if so, from what date and at what rate ?2. Whether the plaintiff is entitled to costs of the suit ?issue No. 1.
(5) UNDER Section 34 of the CPC, award of interest pendente lite is in the discretion of the Court. Merely because the suit amount has been paid during the pendency of the suit, that would not by itself be enough to deny the plaintiff's claim for such interest. However, the facts of this case present a little different picture. From the plea taken in the written statement as also from the documents filed by the defendants Nos. 1 to 4 consisting of their letters to the plaintiff-bank (markedexhibit D-1 and D-2) and not denied by plaintiff indicate that the firm had fallen into financial difficulties as a part of enterpreneur activity. It could not honour the promises of repayments. It had wanted the repayments schedule to be recycled. The officials of the plaintiff-bank were inclined to accommodate the borrower firm presumably convinced of its bonafides but then no resolution could be arrived at. The borrower firm made some repayments coupled with a proposal for adjustments. The plaintiff-bank did some soft-paddling. Apprehending the liability falling overdue, the bank was forced to file the suit. The defendants offered no serious contest and agreed to clear the liability of suit amount by making payments. The bonafides of the defendants are writ large. At the same time, it cannot be lost sight of that the suit was filed on 6. 10. 1987 and the payments towards the suit amount commenced nearly three years thereafter, clearing the liability nearly five years after the date of the suit. In the peculiar facts and circumstances of the case,in the opinion of this Court, the ends of justice would be met not by denying the relief of interest in toto but by striking a middle course. As per the contract, the plaintiff-bank is entitled to interest at the rate claimed in the suit on quarterly rests. In the opinion of this Court, in the facts and circumstances of the case, it will be a sound exercise of discretion to allow the plaintiff-bank to simple interest calculated at the rate of nine per cent per annum from the date of the suit till the date of repayment.
(6) ITEM No. 2. The plaintiff-bank had to file the suit after serving a legal notice. Repayment was not made promptly on the filing of the suit but after a lapse of time as already
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noticed hereinabove. Costs also do not deserve to be disallowed, fully. (7) FOR the foregoing reasons, the suit filed by the. Plaintiff deserves to be decreed in part. The suit amount has been paid during the pendency of this suit. It is not necessary to pass any decree in respect thereof. It is directed that the plaintiff-bank shall be entitled to simple interest on the suit amount calculated at the rate of nine per cent per annum from the date of this suit till the dates of repayment made. The plaintiff shall also be entitled to half of the costs. Let a decree be drawn, accordingly.