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NC: 2023:KHC:37660 RFA No. 282 of 2011
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF OCTOBER, 2023 BEFORE THE HON'BLE MR JUSTICE C M JOSHI REGULAR FIRST APPEAL NO. 282 OF 2011 (SP) BETWEEN:
SMT. JAYALAKSHMAMMA, W/O. LATE G. MARIMUTTHU KONAR, AGED ABOUT 52 YEARS, SINCE DEAD BY SOLE LR APPELANT NO.2.
SRI M. RAMU KONAR, S/O LATE G.MARIMUTTHU KONAR, AGED ABOUT 29 YEARS, R/AT: SRI KRISHNA SAW MILL COMPOUND, PARANDAHALLI ROAD, ROBERTSON PET, KGF.
APPELLANT NO.2 IS RENAMED AS APPELLANT NO.1 VIDE COURT ORDER DATED 24.08.2021. …APPELLANT (BY SRI SHANKAR S BHAT & SRI DAYANAND.K HEGDE, ADVOCATES)
AND:
SRI S VINOD, S/O A. SOHANLAL BANTIA, AGED ABOUT 36 YEARS, R/A: TULASI NIVAS, ARIHANTH MARG, JAIN COLONY, ROBERTSON PET, KGF-563 101. …RESPONDENT (BY SRI P RAGHAVAN, ADVOCATE)
THIS RFA IS FILED UNDER ORDER XLI RULE 1 R/W SEC.96 OF CPC., AGAINST THE JUDGMENT AND DECREE
Digitally signed by T S NAGARATHNA Location: High Court of Karnataka
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DATED 23.10.2010 PASSED IN O.S.NO.134/2004 ON THE FILE OF THE PRL. SENIOR CIVIL JUDGE, K.G.F., PARTLY DECREEING THE SUIT FOR SPECIFIC PERFORMANCE.
THIS APPEAL COMING ON FOR FURTHER HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Being aggrieved by the judgment and decree dated 23.10.2010 passed in O.S.No.134/2004 by the learned Principal Senior Civil Judge, KGF, defendants No.1 and 2 have approached this Court in appeal.
The parties would be referred to as per their ranks before the trial Court for the sake of convenience.
The brief facts of the case are as below:
The plaintiff entered into an agreement of sale in respect of the suit schedule property, i.e. building and premises situated at Oorgaum village (Rural) Robertsonpet Hobli, Bangarpet Taluk within the limits of Gattakamadenahalli Panchayat bearing VP Khatha No.70 measuring East-West 40 feet and North-South 60 feet with the defendants No. 1 and 2 on 26.6.2002. The defendant No.1 is the mother of the defendant No.2. They
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had purchased the suit schedule property from one Annamma under registered sale deed dated 15.2.1999. Later the defendants offered to sell the schedule property to the plaintiff and plaintiff also agreed to purchase the same for a consideration of Rs.6,00,000/-. The plaintiff had paid a sum of Rs.1,00,000/- as advance in pursuance to the agreement reached and in pursuance of the same, the defendants executed an Agreement of Sale dated 26.6.2002. The same was registered before the Sub- Registrar, Bangarpet. Thereafter, the defendants insisted for additional sum of money out of the balance sale consideration amount to meet their personal and family commitments and therefore, the plaintiff paid sum of Rs.4,50,000/- and another Agreement of Sale was entered into between them. The specific performance of the contract was stipulated as two years from 5.7.2002. 4. The plaintiff contended that he is always ready and willing to pay the balance of sale consideration amount of Rs.50,000/- to the defendants and perform his part of contract and he had conveyed his readiness and
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willingness to the defendants and that the defendants have evaded the performance of agreement/contract under the one or the other pretext. It was contended that the husband of defendant No.1, i.e., G. Marimuthu Konar, husband of the defendant No.1 and father of the defendant No.2 was ill and on the said ground the defendants sought to postpone the fulfillment of the contract of agreement of sale. It was contended that the plaintiff came to know that the defendants are trying to alienate the suit schedule property to others and leave the jurisdiction of the Court and therefore, the plaintiff issued a legal notice to the defendants to perform their part of the contract on 26.7.2004.
Plaintiff also stated that the defendants have sold adjacent properties belonging to them and in this connection a paper publication was also made by the plaintiff. Hence, the plaintiff filed a suit for specific performance of agreement of sale. In the alternative, the plaintiff sought for refund of the advance amount of
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Rs.5,50,000/- along with interest at the rate of 18% p.a. from the date of agreement till the date of repayment.
On being summoned by the trial Court, the defendants have appeared through their counsel and filed their written statement contending that they are not at all aware of the plaintiff and his where about and the allegations made in the plaint that they have executed alleged agreement sale on 26.6.2002 and later on additional agreement dated 5.7.2002 are all concocted, got up and they were denied. The defendants contended that they had not all executed the agreement of sale as stated by plaintiff and there was no necessity for them to enter into any agreement of sale or to sell the suit schedule property. They also contended that, the alleged agreement attract stamp duty and sufficient stamp duty is not paid and the same has to be heard.
The defendant Nos.1 and 2 contended that they had purchased the suit schedule property from one Annamma for the valuable consideration and the revenue documents are standing in their name and they have been
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paying taxes to the Government regularly and they have not all received any consideration amount from the plaintiff and the suit document is concocted and fabricated for the purpose of filing this suit.
On the basis of the above pleadings, the following issues were framed by the trial Court: ISSUES "1. Whether the plaintiff proves that the defendants executed a registered agreement of sale dated 26.6.2002 in his favour, agreeing to sell the suit schedule property for a sum of Rs.6,00,000/- and received an advance sum of Rs.1,00,000/-?
Whether the plaintiff proves that on 5.7.2002, the defendants received another sum of Rs.4,50,000/-, agreeing to execute and register the sale deed within two years from 5-7-02, on receipt of balance consideration of Rs.50,000/- and executed a counter agreement of sale ?
Whether the plaintiff further proves that he was always ready and willing to perform his part of the contract?
Whether the defendants prove that the suit documents are fabricated and concocted?
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Whether they further prove that the suit documents are insufficiently stamped and as such inadmissible in evidence?
Whether the plaintiff is entitled for the relief of specific performance or in the alternative for refund of the advance sum of Rs.5,50,000/- with interest at Rs.1.50% p.m?
What order or decree?"
The plaintiff got himself examined as PW1 and two witnesses were examined on his behalf as PWs 2 and 3 and Exs.P1 to P11 were marked in evidence. On behalf of the defendants, they were examined as DWs.1 and 2 and no documents were marked from their side.
After hearing the arguments, the trial Court answered issue Nos. 1 to 3 in the affirmative, issue No.6, partly in the affirmative, issue No.4 in the negative, issue No.6 partly in the affirmative and proceeded to pass the impugned judgment, whereby, plaintiff's suit was partly decreed and the defendants were directed to refund the sum of Rs.5,50,000/- to the plaintiff along with interest at
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the rate of 18% p.a. from the date of the judgment till its payment and directed to pay the same within two months from the date of the said order and the claim for specific performance of the agreement was rejected.
Being aggrieved by the said judgment and decree, the defendants No. 1 and 2 have approached this Court in appeal.
The defendants/appellants have contended that several suspicious circumstances are surrounding the Exs.P1 and 2 which are the agreement and subsequent agreement of sale. It is contended that the dates of the stamp papers and the evidence given by PW1 with regard to purchase of stamp paper would show the suspicious circumstances and the trial Court has failed to take into consideration these aspects while adjudicating the matter. They contended that the respondent/plaintiff has failed to explain as to why two agreements came into existence when Ex.P1 was registered one. It is contended that there are over writings on Ex.P2 and these over writings are
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deciding factors about the genuineness of Exs.P1 and P2. It is contended that the consideration is paid to one Marimuttu and therefore, the alleged consideration is not at all paid to the appellants/defendants and there is a specific recital that within a period of two years, the sale deed must be executed and the legal notice has been sent after the lapse of two years and therefore, the claim is belated. It is contended that PWs.2 and 3 are the interested witnesses and PW2 is the attesting witness to Exs.P1 and P2 and the very evidence given by PW2 disproves the Exs.P1 and P2. It is contended that the plaintiff has not proved the availability of funds to pay the consideration amount and no documents are produced indicating the availability of the funds. It is also contended that the notice was issued to one Ramakka who is unknown to the transaction and therefore, the impugned judgment and award passed by the trial Court is incorrect and the same is liable to be set aside.
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On being issued with the notice, the plaintiff/respondent has appeared before this Court through his counsel. The appeal being admitted, the trial Court records have been secured.
During the pendency of this appeal, the appellant No.1 died and therefore, the appellant No.2 being the only legal heir was treated as her legal representative.
Arguments by the learned counsel for the appellant/defendant and learned counsel appearing for the respondent were heard.
The learned counsel appearing for the appellant/defendant submits that the impugned judgment of the trial Court is illegal and it over looks the evidence on record. He points out that all the three pages of the agreements are of the different dates and therefore, the agreement could have been disbelieved by the trial Court. He reiterated the grounds stated in the appeal memo and contended that the trial Court has also erred in holding that the appellant has to refund the sum of Rs.5,50,000/-
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along with interest. He submits that the trial Court should have come to the conclusion that there was no such agreement as contended by the plaintiff and the trial Court erred in holding that the defendants are liable to refund the amount. Thus, he submits that the proof in respect of the agreement of sale was not properly appreciated by the trial Court and it erred in holding that the agreement of sale is proved by the plaintiff. Secondly, he submits that the refund of a sum of Rs.5,50,000/- along with interest at 18% p.a., is also not justifiable and in the absence of any clause in the agreement to refund the amount with interest at 18%, the said finding is illegal. He also assail the rate of interest awarded by the trail Court.
After having heard the arguments by both the sides, the points that arise for consideration of this Court are:
1.Whether the trail Court is justified in holding that the plaintiff had proved the agreements of sale at Exs.P1 and P2 and also in
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holding that the plaintiff has shown his readiness and willingness to perform his part of contract?
Whether the trial Court is justified in ordering refund of the advance consideration amount of Rs.5,50,000/- along with interest at 18% p.a. from the date of first agreement?
Whether the impugned judgment is arbitrary, capricious and perverse and as such, need an intervention by this Court?
The first aspect to be considered by this Court is in respect of the proof of the agreements of sale at Exs.P1 and P2.
In order to prove the agreements of sale the plaintiff examined himself as PW1 and two witnesses were examined on his behalf as PWs.2 and 3. Ex.P1 shows that it is a registered agreement of sale and the endorsement of the Sub-Registrar shows that the plaintiff, the
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defendants and the attesting witnesses have also appeared before the Sub-Registrar and their photographs have also been affixed to the agreement. As per Ex.P1, the defendants had received Rs.1,00,000/- as advance and the remaining sum of Rs.5,00,000/- has to be paid within two years from the date of the agreement. It is relevant to note that Ex.P1 is typed on three sheets of the Stamp paper which were purchased from the Stamp Vendor- T. Rajamani of Robertson Pet on 21-6-2002. As contended by the learned counsel appearing for the appellant, there is nothing on record to show that these three stamp papers were purchased on different dates. All these were purchased on the same day and the endorsement of the Stamp Vendor on the first leaf of Ex.P1 shows that three sheets were issued for the fulfillment of the stamp duty of Rs.200/-.
Ex.P2 is the agreement of sale (counter) and this document refers to the registered agreement of sale i.e. Ex.P1. It is stated in page No.2 that the sale consideration
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is Rs.6,00,000/- and a sum of Rs.1,00,000/-was paid on the previous date of agreement i.e. on 14-6-2002. Now another sum of Rs.4,50,000/- was paid to the vendors. It is true that, in Clause No.2 on page No.2 of the agreement, the amount written in words that 'Rupees Four Lakhs Fifty only'. In figures, it was written as 'Rs.4,50,000/-'. It is also pertinent to note that except this, nowhere the payment of Rs.4,50,000/- has been mentioned. The evidence as to whether the additional payment on 5-7-2002 was Rs.4,00,050/- or Rs.4,50,000/- is required to be proved on the oral evidence of the witnesses. It is also pertinent to note that this document consists of three leaves and they were purchased on 21-6-2002 from the same Stamp Vendor i.e. T. Rajamani. I am unable to appreciate the contention of the learned counsel for the appellant/defendant that the stamp papers were obtained on different dates and on this ground, the Sale Agreement is surrounded by suspicion. On oral testimony, PW1 has stated in his affidavit evidence about the agreement of sale and got the documents marked in
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his examination-in-chief. It is elicited in the cross- examination that, he is a businessman, he has sufficient income, he also has bank account and he is an income tax assessee. It is elicited that a sum of Rs.5,50,000/- was paid by him to the defendant No.1 and her husband on 26-6-2002 and on 5-7-2002. It is also elicited that defendant No.2 was also present at that time. On a careful perusal of the evidence of PW1, there is nothing which shows that there are any suspicious circumstances. The further cross-examination of PW1 dated 22-6-2009 show that certain discrepancies were pointed out to him and he has admitted the same. He admits that the name of the previous owner of the property is not mentioned in Exs.P1 and P2. However, on perusal of Exs.P1 and 2 show that the defendants were shown to be the owners of the property and there is no dispute about the same. The Ex.P1 categorically mentioned that defendants have purchased the property from one Annamma under the registered sale deed dated 15-2-1999. Therefore, these
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suggestions and elicitation of PW1 in the cross- examination have no much importance.
PWs 2 and 3 are the witnesses present at the time of execution of Exs.P1 and P2. PW2 happens to be the attesting witness. PW2-Vinayamurthy, who is an attesting witness to the agreement and he states that he was present at the time of the agreement. He says that he could not tell the time of the writing of the agreement in the office of Srinivasa. It is elicited that both the agreements were registered. It is evident that the he was deposing before the Court after several years of agreement and therefore, these discrepancies are not of much significance in the matter.
PW3-Shyamraju, happens to be the Advocate and he states that at the instance of plaintiff and defendants, he has drafted the agreement and the same was read over and then the defendant Nos. 1 and 2 have signed. The husband of defendant No.1 Marimuthu, has also signed the agreement as witness and he has identified
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his signature on the agreement of sale. It is pertinent to note that Ex.P1 is dated 26-6-2002. But in Ex.P2, it is written as '24-6-2002' and this discrepancy is admitted by him. He also admits that the over writings in Ex.P2 regarding the additional amount paid i.e. Rs.4,50,000/-. However, it is to be noted that it is also a print out and the initials are not obtained at the time of over writings. However, his cross-examination categorically discloses that a sum of Rs.4,50,000/- has been paid to the husband of defendant No.1 at the time of execution of Ex.P2.
On careful perusal of evidence of PWs 1 to 3 and documents produced by the plaintiff/respondent, it is evident that defendants had entered into an agreement of sale with the plaintiff. Ex.P3 happens to be the original sale deed executed by Smt. Annamma in favour of defendant Nos. 1 and 2. The custody of this document is also of importance. Evidently, the plaintiff contends that at the time of agreement itself the defendants have given the original sale deed to the plaintiff. Therefore, the plaintiff
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has produced original sale deed at Ex.P3. There is no explanation given by the defendants in respect of he custody of Ex.P3.
Ex.P4 happens to be the notice issued by the plaintiff to the defendants and it has been addressed to one Rakamma wife of Marimuthu Konar. It is evident that, apart from defendant No.1, one Rakamma was also the wife of Marimuthu Konar and therefore, a notice was addressed to her also. However, it is evident that defendant Nos. 1 and 2 were the absolute owners of suit property and issuance of notice to one another person is not of much importance. This notice also mentions the description of other properties held by one Marimuthu.
Exs.P6 to P9 are the agreements and sale deeds executed by Marimuthu in favour of different persons.
Per contra, the defendants have got examined themselves as DWs 1 and 2. Except the oral denial, there is nothing else on the record to show that they had no
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family necessity which warranted them to enter into an agreement of sale with plaintiff. Except the oral testimony of these defendants, nothing is available on record to show that the defendants had sufficient income and there was no need for them to sell the suit schedule property. DW2 states in his cross-examination that since 2004 he is residing at Kolar and after the death of his father, one Raghu and Venkatesh are managing the family and other properties and they had caused the trouble to DW2 and therefore, he left the property and went to Kolar. He states that all other properties were in the name his father and there are other disputes between the defendant No.1 and the first wife of Marimuthu, i.e., Rakamma. These elicitations in cross-examination disclose that the defendants were not interested in managing and holding the suit schedule property at Robertson Pet. Thus, it is evident from the above facts and circumstances that, the defendants had entered into an agreement of sale and initially a sum of Rs.1,00,000/- was paid to the defendants and later they had received a sum of Rs.4,50,000/-. The
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trial Court on the basis of the oral and other documents available on record came to the conclusion that there is an agreement of sale. There is no infirmity in the conclusions reached by the trial Court in respect of Ex.P1 and P2.
The second question is, whether the plaintiff is ready and willing to perform his part of contract? Obviously, there was no delay in issuing the notice as well as in filing the suit. The plaintiff has stated that he is a businessman and he is having adequate money and therefore, he was ready and willing to pay the balance consideration amount of Rs.50,000/- to the defendants. It is obvious that, more than 90% of the sale consideration amount was paid to the defendants under Exs.P1 and P2. Only a sum of Rs.50,000/- was to be paid by the plaintiff to the defendants. It is pertinent to note that the plaintiff had issued legal notice to the defendants on 26-7-2004 i.e., immediately after the expiry of two years as stipulated under the agreement of sale. Issuance of notice within a month after the expiry of the period stipulated,
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can not be termed to be a delay. There is nothing on record to show that the plaintiff could not have the capacity to pay the balance amount. Therefore, the trial Court has rightly come to the conclusion that the plaintiff had proved his readiness and willingness.
The trial Court has held the issue in respect of the proof of the agreement as well as the readiness and willingness in favour of the plaintiff. Having held that the plaintiff had proved the agreement of sale as well as the readiness and willingness to perform his part of contract, the trial Court exercising its discretion rejected the claim for specific performance of contract and ordered for refund of the advance amount. The reasons assigned by the trial Court in ordering for refund of the advance amount is that, the husband of the defendant No.1 having purchased various properties and after his death the defendants being the successors of his properties, but those properties have been sold to various persons. The trial Court notes that the plaintiff has not produced any
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document to show that the present defendants are owing any other property other than the suit schedule property and there is no scrap of paper to show that the properties shown in Exs.P6 to P9 were succeeded by the defendants. Therefore, the trial Court comes to the conclusion that there will be more hardship for the defendants if the relief of specific performance is granted. This observations is based on the Exs.P6 to P9. It is relevant to note that the defendants had contended that they would be put to hardship and difficulty if the specific performance is ordered as they are not having any other property. Though there is scanty cross- examination of DW2 on this aspect, it is evident that there were other litigations and the suit schedule property being the absolute property of defendants No. 1 and 2, the observation by the trial Court appears to be justifiable.
The question of discretion to be exercised by the Court is aptly stated in the decision of the Shenbagam
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and others v. K.K. Rathinavel1. In this decision, the Apex Court cronicles various other decisions which touch upon the judicial discretion of the trial Court in the case of specific performance of the agreement. In para 33, it relies on the decision in the case of Satya Jain Vs. Nis Ahmed Rushdie (2013) 8 SCC 131, wherein, it was observed as below: "40. The discretion to direct specific performance of an agreement and that too after clapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance."
In conclusion, the Apex Court has ordered for refund of the amount of Rs.35,000/- along with interest at 6% p.a.
1 AIR 2022 SC 1275
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It is worth to note that the exercise of the discretion available under Section 20 of the Specific Reliefs Act has been exercised by the trial Court by giving sufficient reasons. There is no circumstance which is pointed out by the learned counsel for the appellant to show that such exercise of discretion by the trial Court is unwarranted and the reasons for such exercise was not explained by the trial Court. The trial Court sufficiently explains the reason why it is rejecting the claim for the specific performance of the agreement. Hence, when the trial Court has exercised its discretion, it would not be proper on the part of the First Appellate Court to unsettle such discretion exercised, which is supported by valid reasons. Under these circumstances, this Court do not find any reasons to interfere with the discretion exercised by the trial Court.
In umpteen number of decisions, the scope of the Appellate Court to interfere in the judgment of the trial Court has been stated. Simply because another view is
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possible, the view taken by the trial Court cannot be unsettled to substitute the views of the First Appellate Court. On facts, the trial Court has come to the conclusion that the hardship that would be faced by the defendants would be more and therefore, it has refused the discretion. Hence, no interference is required in respect of the findings of the trial Court.
The last question that was pointed out by the learned counsel for the appellant/defendant is regarding the rate of interest. The trial Court has not assigned any reasons to award the interest at the rate of 18% p.a. It is to be noted that the agreement do not mention any rate of interest that would be payable in case of breach of the agreement. The learned counsel appearing for the appellant contend that in view of the decision in the case of Shenbagam and others Vs. K.K. Rathinavel referred supra, the rate of interest should be Rs.6%.p.a.
Per Contra, learned counsel appearing for plaintiff/ respondent contend that the plaintiff has paid
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substantial amount of sale consideration to the defendants and after lapse of time, the defendants are liable to pay the interest to the plaintiff. The claim was made by the plaintiff in the plaint and the trial Court has found favour with the plaintiff to grant such rate of interest.
It is pertinent to note that the interest cannot be a punitive interest. The agreement between the plaintiff and the defendants was contract for sale of an immoveable property and the plaintiff had proved the agreement and that he had paid a sum of Rs.5,50,000/- to the defendants. The defendants for various reasons could not execute the sale deed. Exercising the discretion in favour of the defendants, the refund of the amount has been awarded by the trial Court. The defendants have received the sum of Rs.5,50,000/- and have not refunded the said amount. If the said amount was invested by the plaintiffs elsewhere, definitely, he would have earned certain returns. Such returns had to be awarded to the plaintiff by way of damages. At the same time, such
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damages should not be exorbitant and imaginary. The interest of justice and equity calls for imposition of the interest at the rates that would have been paid by any bank on such deposit. Evidently, a sum of Rs.5,50,000/- was paid in the year 2002. The rate of interest during the year 2002 and the rate of interest at the time of the judgment of the trial Court should have been considered by the trial Court. Obviously, no reasons are forthcoming in the impugned judgment regarding the interest. Taking the judicial note of the fact that the rate of interest that would be paid by the bank on the fixed deposit was higher in the year 2002 and there was gradual decline in such rate of interest till the present date, a balance has to be struck while awarding the interest. The interest should neither be exorbitant nor minimal. Taking note of these aspects, this Court holds that, it would be just, proper and equitable to award interest at the rate of 14% p.a. Obviously, the substantial sum of Rs.4,50,000/- was paid on 5-7-2002. The defendants are liable to pay interest from the said date i.e. 5.7.2002. Therefore, only to the
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extent of the rate of interest, there is a need for intervention by this Court. Hence, point Nos. 1 and 2 are answered in the affirmative and point No.3 is answered partly in the affirmative and hence, the following:
ORDER
The appeal is allowed.
The appellant is directed to refund the sum of Rs.5,50,000/- along with the interest at the rate of 14% p.a. from 5.7.2002 till payment.
The rest of the judgment passed by the trial Court is hereby confirmed. No orders as to costs.
Sd/- JUDGE
tsn*List No.: 1 Sl No.: 2