Supreme Court of India
SECRETARY/GENERAL MANAGER CHENNAI CENTRAL COOPERATIVE BANK LTD. & ANR.versusS. KAMALAVENI SUNDARAM
- Citation
- 2011 INSC 9
- Decided
- 4 January 2011
- Disposal
- Case Partly allowed
- Bench
- AFTAB ALAM
Holding
Section 34 CPC authorises interest only from the date of filing of the suit to the decree and thereafter, and does not permit pre‑suit interest; therefore interest for Jan 20 2000‑July 20 2005 cannot be awarded.
Summary
The landlady sued the tenant for arrears of rent and claimed 18% interest. The plaint was returned for defects on 20‑Jan‑2000 and was not re‑presented until 20‑July‑2005, a delay of five years and six months. The trial court awarded 6% interest for the periods 9‑Sept‑1998 to 21‑Jan‑2000 and from 21‑July‑2005 to payment. The High Court altered this, directing the tenant to pay 12% interest from the filing date of the suit (9‑Sept‑1998) up to the decree date and 6% thereafter. The Supreme Court examined whether Section 34 of the CPC permits such pre‑suit interest and held that it does not; interest is awardable pendente lite only after the suit is filed and based on the facts, not as a matter of course. Consequently, the direction to award 12% interest for the dormant period (20‑Jan‑2000 to 20‑July‑2005) was set aside, and the appeal was partly allowed.
Issues considered
- Does Section 34 of the Code of Civil Procedure, 1908 empower a court to award pre‑suit interest for the period between the return of a plaint and its re‑presentation?
- Can interest be awarded pendente lite at a rate higher than the contractual or statutory rate solely on equitable considerations?
- Was the High Court justified in directing the tenant to pay 12% interest for the period Jan 20 2000 to July 20 2005?
Legislation cited
Subjects
interestSection 34 CPCpre‑suit interestpendente lite interestrent recoveryevictionequitable considerations
Judgment
[2011] 1 S.C.R. 66
A SECRETARY/GENERAL MANAGER CHENNAI CENTRAL
COOPERATIVE BANK LTD. & ANR.
-r-
v.
S. KAMALAVENI SUNDARAM
(Civil Appeal No. 14 of 2011)
B
JANUARY 4, 2011
[AFTAB ALAM AND R.M. LODHA, JJ.)
Code of Civil Procedure, 1908:
C.
s. 34 - Interest - Plaint re-presented five years and six
months after its return - Interest on principal amount - HELD:
Interest is awardable pendente lite taking into consideration
the facts and circumstances of the case and not as a matter ·
D of course - Section 34 does not empower the court to award :
pre-suit interest which would ordinarily depend on the contract .
between the parties - Direction of the High Courl to pay >-
interest for the period from return of the plaint to its re-
presentation set aside - Rent Control and Eviction.
E The respondent landlady, after the eviction of
appellant-2, the tenant, filed a suit on 9.9.1998 for
recovery of arrears of rent and for 18% interest thereon.
The plaint was returned on 20.1.2000 because of certain
-r
defects. It was re-presented after a gap of about 5 years
F and 6 months on 20.7.2005. The suit was decreed on
24.3.2008, with 6% interest from 9.9.1998 to 21.1.2000 and
from 21.7.2005 to the date of payment. On appeal by the
landlady, the High Court allowed 12% interest from the
date of filing of the suit till the date of decree and 6%
G interest thereafter till realisation of principal amount of
rent. -,.C.
Partly allowing the appeal filed by the tenant, the
Court
H 66
SEC./GEN. MANAGER CHENNAI CENTRAL COOP. BANK 67
-
LTD. v. S. KAMALAVENI SUNDARAM
HELD: Interest is awardable pendente lite taking into A
, consideration the facts and circumstances of the case
and not as a matter of course. Section 34 CPC empowers
the court to award interest for the period from the date
of the suit to the date of the decree and from the date of
the decree to the date of payment where the decree is for 8
payment of money. It does not empower the court to
, award pre-suit interest, which would ordinarily depend
on the contract (express or implied) between the parties
!lr some statutory provisions or the mercantile usage. In
the instant case, the plaint after its return on 20.1.2000, c
was not re-presented immediately nor within reasonable
time. As a matter of fact, the matter remained dormant in
the hands of the landlady and the plaint was re-presented
after five years and six months on July 20,2005.
Obviously, the landlady cannot derive any advantage of
D
·her inaction or lack of diligence in re-presenting the plaint.
- --<..._
The direction of the High Court to the tenant to pay
interest@ 12% per annum on the due rent for the period
January 20, 2000 to July 20, 2005 is set aside. [para 10-
12] [70-G-H; 71-A-D]
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14
of 2011.
From the Judgment & Order dated 11.3.2010 of the High
i
Court of Judicature at Madras in A.S. No. 990 of 2008. F
" K.V. Viswanathan, Mary Mitzy, G.S. Chauhan, Shiv
Prakash Pandey for the Appellants.
S. Aravindh, V. Balachandran for the Respondent.
G
)or The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Leave granted.
2. The short question for consideration in this appeal, by
special leave, is whether the Single Judge of the Madras High H
68 SUPREME COURT REPORTS [2011] 1 S.C.R.
IA Court was justified in directing the 2nd appellant to pay interest
@ 12% per annum on the arrears of rent from September 9,
1998 to the date of decree dated March 24, 2008.
3. Brief facts leading to the present controversy are these.
The respondent-S. Kamalaveni Sundaram (hereinafter
B
referred to as 'the landlady') let out ground floor of her property
situate at MRC Nagar, South Beach Avenue, Chennai to the
2nd appellant (hereinafter referred to as 'the tenant') in the ~-
month of February, 1990 on a monthly rent of Rs. 5600/- payable
according to the English calendar month. The tenancy was for
c non-residential purposes viz., for running the banking business.
The landlady filed the suit for fixation of fair rent against the
tenant in 1996. The Small Causes Court, Chennai vide its order
dated March 27, 1998 fixed the fair rent at Rs. 32,356/- per
month with effect from October 28, 1996. In September 1998,
D the tenant vacated the leased premises. However, the tenant
was in arrears of rent at the time of vacation of premises. The
landlady sent a notice through her lawyer and called upon the
tenant to pay a sum of Rs. 5,71,832/- towards difference in rent
upto May, 1998 and also rent for the months June, July and
E August, 1998 after giving adjustment of sum of Rs. 33,600/-
paid by the tenant in advance. The tenant failed and neglected
to comply with the notice sent by the landlady.
--,.-
4. The landlady then filed a suit in the month of December,
F 1998 against the tenant for recovery of Rs. 6,83,346/- in the
City Civil Court, Chennai. The landlady also claimed Interest
@ 18% per annum on Rs. 5,71,832/- (the principal amount of
rent) due against the tenant.
5. The plaint filed by the landlady suffered from certain
G defects and the same was returned to her on January 20, 2000 --.(_
for the rectification of defects. The landlady, however, re-
presented the plaint after a gap of more than five years, to be
precise on July 20, 2005. Initially an ex-parte decree was
passed against the tenant in the suit but later on the tenant was
H
·- - .. ~- -~-- ..
SEC./GEN. MANAGER CHENNAI CENTRAL COOP. BANK 69
LTD. v. S. KAMALAVENI SUNDARAM [R.M. LODHA, J.]
permitted to contest the suit after the ex-parte decree was set . A
aside.
6. After contest, the Ill Additional Judge, City Civil Court,
Chennai passed a decree on March 24, 2008 in favour of the
landlady and directed the tenant to pay to her:the arrears of rent B
amounting to Rs. 5,71,832/- with interest at the rate of 6% per
annum from Septe_mber 9, 1998 to January 21, 2000 and from
July 21, 2005 to the date of payment. The tenant was given three
months' time to pay the amount from the date of the decree.
7. The landlady challenged the judgment and decree dated C
March 24, 2008 before the High Court of Judicature at Madras.
The Single Judge of the High Court after hearing the parties
allowed the appeal preferred by the landlady in part and
directed the tenant to pay interest@ 12% per annum from the
. -....
date of the filing of the suit, i.e., from September 9, 1998 until D
March 24, 2008 and @ 6% per annum from March 25, 2008.
till the date of realization of the principal amount of rent.
8. On July 26, 2010, while issuing notice in the petition for
special leave to appeal, the following order was passed by us: E
"Counsel for thP petitioners submits that there was no
justification for the High Court to grant interest for the
period January 20, 2000 to July 20, 2005, when the plaint
had been returned to the plaintiff for removal of certain
defects. F
Issue notice.
The execution of the decree as per the High Court
Judgment shall remain stayed, provided the petitioners G
deposit a sum of Rs. 7.5 lakhs before the Court below,
within four weeks from today."
9. The landlady-sole respondent-has filed counter
affidavit and justified the order of the High Court principally on
....... H
70 SUPREME COURT REPORTS [2011] 1 S.C.R.
A the ground that on the admitted facts and circumstances oJ the
case, the High Court has struck the balance on equity as
between the parties by granting lesser interest than what was
claimed by her while granting interest for the entire period of
pendency of the suit.
10. We heard the learned senior counsel for the tenant and
the learned counsel for the landlady. Having regard to the facts
and circumstances of the case, we are unable to sustain the
order of the High Court to the extent the interest has been
awarded to the landlady for the period from January 20, 2000
C to July 20, 2005. As noticed above, the plaint was returned by
the City Civil Court, Chennai to the landlady on January 20,
2000 for re-presenting the same after rectification of the
defects. However, for the reasons best known to the landlady,
the plaint was not re-presented immediately nor within
D reasonable time. As a matter of fact, the matter remained
dormant in the hands of the landlady and the plaint was re-
presented after five year$ and six months on July 20, 2005.
Obviously, the landlady cannot derive advantage of her inaction
or lack of diligence in re-presenting the plaint. Had the landlady
E re-presented the plaint within reasonable time, the matter would
have been decided long back. As the facts reveal, the plaint
was re-presented on July 20, 2005 and the suit was decreed
by the trial court on March 24, 2008. In the circumstances,
therefore, the award of interest for the period January 20, 2000
F to July 20, 2005 does not seem to be justified. We are not
persuaded by the submission that by not filing the plaint
immediately after it was returned or for delay in re-presenting
the plaint, the landlady did not gain anything and although she
was entitled to interest @ 18% per annum on the arrears of rent,
G the High Court only awarded interest@ 12% and thereby struck
a balance on equity. Whether the landlady gained anything or
not by delay in re~presenting the plaint is not material but what
is material is that interest is awardable pendente lite taking into
consideration the facts and circumstances of the case and not
H as a matter of course.
7
SEC./GEN. MANAGER CHENNAI CENTRAL COOP. BANK 1
LTD. v. S. KAMALAVENI SUNDARAM [R.M. LODHA. J.]
11. Section 34 of the Code of Civil Procedure, 1908 A
(CPC) empowers the court to award interest for the period from
the date of the suit to the date of the decree and from the date
of the decree to the date of payment where the decree is for
payment of money. Section 34 of the CPC does not empower
the .court to award pre-suit interest. The pre-suit interest would B
ordinarily depend on the contract (express or implied) between
the parties or some statutory provisions or the mercantile usage.
Be that as it may, we do not find that on equitable
considerations the landlady is entitled to interest for the period
January 20, 2000 to July 20, 2005. ·· c
12. As a result of the foregoing discussion, the appeal is
allowed in part and the direction given by the High Court to the
tenant to pay interest @ 12% per annum on the due rent for
the period January 20, 2000 to July 20, 2005 is set aside.
Except the above modification, the decree of the High Court D
stands. The parties shal) bear their own costs.
R.P. Appeal partly allowed.
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