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The Amalgamated Electricity Co. Ltd., Ajmer Vs. the Municipal Council, Ajmer and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Ex. First Appeal No. 25 of 1968
Judge
Reported inAIR1968Raj327
ActsCode of Civil Procedure (CPC) , 1908 - Sections 34 and 144 - Order 41, Rule 6; Rajasthan Municipalities Act, 1959 - Sections 94
AppellantThe Amalgamated Electricity Co. Ltd., Ajmer
RespondentThe Municipal Council, Ajmer and anr.
Appellant Advocate S.K. Jindal, Adv.
Respondent Advocate D.P. Gupta, Adv. for Respondent No. 1
DispositionAppeal partly allowed
Cases ReferredGauridutt v. Madho Prasad
Excerpt:
- - it is thus clear that the appellant had not appropriated the decretal money realised by it to any other use but kept it safe in the bank with the result that there was no difficulty in the process of restitution. it is well established that if an obstacle is placed in the way of decree-holder in the matter of withdrawing the decretal amount, the decree-holder becomes liable for payment of interest on restitution only from the date when the obstacle is removed from his way. in such a case the benefit, if any, secured by the other party would be referable not merely to the decree, but to the subsequent order as well......within a narrow compass.3. the appellant. amalgamated elec-tricity company limited, obtained a money decree from the court of senior civil judge, ajmer for rs. 44,461/11/9 against the respondent. the municipal council ajmer on 19-9-1956. the appellant was also awarded costs of original suit rs. 1997 and pendente lite and future interest at the rate of 3 1/2% p. a. the appellant thereafter levied execution hut the respondent filed an appeal before this court and obtained ex parte stay of execution on 15-2-1967. later on, after hearing both the parties the ex parts stay order dated 15-2-1967 was set aside by a subsequent order dated 19-3-1967 of this court and it was directed that the decretal amount shall not be paid to the decree-holder i.e. the appellant in this case, unless.....
Judgment:

Lodha, J.

1. This appeal is directed against the judgment of the Senior Civil Judge, Ajmer. dated 5th November 1966 and involves the determination of a question relating to award of interest while directing restitution under Section 144, Civil Procedure Code

2. The facts giving rise to this appeal-may be stated within a narrow compass.

3. The appellant. Amalgamated Elec-tricity Company Limited, obtained a money decree from the Court of Senior Civil Judge, Ajmer for Rs. 44,461/11/9 against the respondent. the Municipal Council Ajmer on 19-9-1956. The appellant was also awarded costs of original suit Rs. 1997 and pendente lite and future interest at the rate of 3 1/2% P. A. The appellant thereafter levied execution hut the respondent filed an appeal before this court and obtained ex parte stay of execution on 15-2-1967. Later on, after hearing both the parties the ex parts stay order dated 15-2-1967 was set aside by a subsequent order dated 19-3-1967 of this Court and it was directed that the decretal amount shall not be paid to the decree-holder i.e. the appellant in this case, unless security is furnished to the satisfaction of the Executing Court for repayment in case the decree passed by the trial court is set aside. In compliance of the order of this Court dated 19-3-19(sic) the judgment-debtor-respondent deposited the decretal amount in the executing court on 20-3-1957. The appellant furnished bank guarantee for restitution of the amount and thereafter withdrew it on 24-11-59.

Subsequent.lv the decree passed in favour of the appellant was however set aside by this Court on 22-9-1964 and the suit filed by the appellant was dismissed with costs Consequently on 7th May, 1965 the respondent-judgment-debtor applied for restitution of the amount which it had paid te the appellant in execution of the decree passed by the trial court. The appellant deposited the amount in the Court on 17th December. 65 which was withdrawn by the respondent on 5-11-1966.

Two questions cropped up in connection with the restitution proceedings:

(1) What rate of interest should be allowed to the respondent on the decretal amount refunded to it?

(2) For what period the respondent is entitled to get such interest on the money restituted''

3-A. None of the parties led any evidence on either of these points and the Executing Court held that the respondent-judgment-debtor is entitled to get interest at the rate of 6% per annum on the sum of Rs 55.501/9/9 from 24-11-1959 i. e. the date when the amount was actually withdrawn by the appellant upto 17th December, 1965 when the amount was redeposited by the appellant by way of restitution.

4. Aggrieved bv this order of the executing Court the appellant has filed this appeal and the only ground urged by it is that the rate of interest awarded is excessive. The respondent has also filed cross-objection and the ground urged by the respondent in support of its cross-objection is that it should have been allowed interest for the period commencing from 23-8-57 when the amount was actually deposited by it in the Court in execution of the decree upto 5th Novem-ber, 1966 when the amount was actually withdrawn by the respondent from the Court in the course of restitution proceedings.

5. We shall first take up the appeal Learned counsel for the appellant has submitted that the appellant had invested money after withdrawing it from the Court in a bank and earned interest at the rate of 3 1/2% p. a. only upto 21-5-1961 and at 4% per annum from 22-5-61 upto 23-9-1965 and in these circumstances the respondent should not have been allowed interest at more than 4% per annum. It has also been submitted that while passing the decree in favour of the appellant the trial court had awarded pendente lite and future interest at the rate of 3 1/2% P. A. only and the same rate should havt been allowed at the time of restitution of the amount on the reversal of the decree of the trial Court.

On the other hand the learned counsel for the respondent has submitted that it was in the discretion of the Executing Court to have allowed interest on the restituted amount at the court-rate which was 6% per annum and the discretion exercised by the Executing Court should not be interfered in appeal. He has also contended that if it had not been compelled to pay this amount during the course of execution it would have made a profitable investment and would have earned interest at a much higher rate and at least at the rate of 6% per annum which has been awarded by the Executing Court. We have examined the respective contentions of the parties. It is correct that it was within the discretion of the Executing Court to have allowed interest at such rate as was permissible within the statutory limits. The only ground which has prevailed with the Executing Court for award of interest at the rate of 6% ia that merely because the appellant company had put the money in the fixed deposit account with the Central Bank of India and did not get interest more than 3 1/2% upto 21-5-61 and 4% thereafter was no consideration for reducing the maximum rate of interest i. e. 6% which the Court could have awarded. It is also correct that the mere fact that the decree-holder earned smaller interest on the amount realised by it during the course of execution is not the sole criterion for awarding interest at the time of restitution. But that apart, there are certain considerations in this case which do not seem to have attracted the attention of the Executing Court. It is noteworthy that the respondent-Municipal Council is a statutory body and there are certain limitations on its powers oi investment of its funds. It is not permissible to a Municipal Council to make any hazardous investment. It can invest its surplus funds onlv in public securities and in this connection reference may be made to Section 94 of the Ra.jasthsn Municipalities Act, 1959. It is, therefore, obvious that the respondent in this case could not have earned a very high rate of interest. In the second place it may be recollected that an obstacle had been put in the way of the appellant in the matter of realisation of the decretal amount and this Court while vacating the stay order in connection with the appeal filed by the respondent from the original decree, had directed on 19-3-1957 that the decretal amount shall not be paid to the appellant unleas security was furnished for repayment of the same in case of reversal of the trial court's decree. In compliance of this order the appellant had furnished a bank guarantee. It is common knowledge that no guarantee is furnished by a bank worth the name unless equivalent money to the guarantee amount is put in the bank. In case of bank guarantee it is always very convenient to realise the money and that is why in the course of restitution the money was realised back from the appel-lant without any substantial loss of time. It is thus clear that the appellant had not appropriated the decretal money realised by it to any other use but kept it safe in the bank with the result that there was no difficulty in the process of restitution. Then again it has to be borne in mind that at the time of decreeing the appellant's suit the trial court had allowed pendente lite and future interest only at the rate of 3 1/2% and even though it is not obligatory on the part of the Court to allow the same rate of interest at the time of restitution but that factor may be taken into consideration along with others for determining the rate of interest to be awarded at the time of restitution. Learned counsel for the appellant has invited our attention to Hanuman Prashad v. National Bank of India Ltd., AIR 1926 Lah 488 where at the time of determining the rate of interest at the time of restitution the rate of interest awarded to the decree-holder at the time of decreeing his suit was taken into consideration and the same rate was awarded for restitution also.

6. Taking all these facts into consideration we are of the view that it would have been a sound exercise of discretion to award interest at the rate of 4% per annum on the amount restituted. Learned counsel for the respondent is no doubt right in his contention that it was in the discretion of the lower court to have determined the rate of interest for purposes of restitution but it cannot be gain-said that the discretion has to be exercised on sound judicial principles. In this case we are of the opinion that the lower court did. not take into consideration the circumstances which we have pointed out above at the time of determining the rate of interest to be awarded to the respondent.

7. Taking all the circumstances of the case into consideration we think that it would be proper to award interest at the rate of 4% per annum to the respondent on the sum restituted. Accordingly we modify the judgment of the lower Court and direct that the respondent shall be entitled to get Interest at the rate of 4% per annum on the amount restituted to it.

8. Coming to the cross-objections learned counsel for the respondent has urged that his client had to deposit the money on 23-8-1957 and if this amount was withdrawn by the appellant as late as 24-11-1959, for no fault of his client, then his client should have been awarded interest from 23-8-1957. Similarly it is contended that the respondent had withdrawn the amount on 5-11-1966 even though it had been redeposited by the appellant on 17-12-1965. Thus the contention of the respondent is that the Municipal Council is entitled to get interest not only from the period 24-11-1959 to 17-12-65 but also from 23-8-1957 to 23-11-1959 and from 17th December, 1965 to 5th November, 1966. In our opinion, the contention raised by the respondent in the cross-objection is devoid of substance. It is well established that if an obstacle is placed in the way of decree-holder in the matter of withdrawing the decretal amount, the decree-holder becomes liable for payment of interest on restitution only from the date when the obstacle is removed from his way. In the present case an obstacle had been placed in the way of the decree-holder by the order of this Court dated 19-3-1967 whereby it was directed not to withdraw the amount from the Court unless it gave security for restitution. Thus so long as the security was not given there existed an impediment in the way of the decree-holdei for realisation of the decretal amount, and for the period the obstacle was there, the decree-holder is not liable to pay interest. In this connection reference may be made to Pappu v. Ramnatha, AIR 1963 Mad 45 (FB) a Full Bench decision of the Madras High Court wherein it was observed as follows :--

'But different considerations will arise if there is an impediment placed by an order of Court to the execution of the decree according to its terms. In such a case the benefit, if any, secured by the other party would be referable not merely to the decree, but to the subsequent order as well.'

In such class of cases, it was observed by the Madras High Court that,

'He (decree-holder) will be bound to pay interest on such amount from the date when the obstacle is removed.'

The same view was taken by the Patna High Court in Gauridutt v. Madho Prasad, AIR 1943 Pat 427 and also by the Andhra Pradesh High Court in State v Govinda Raja Rice Mill Contractors. AIR 1965 Andh Pra 398. There can be no hard and fast rule that interest should be al-lowed from the date of the deposit but what the Court should do is to pass a just order having regard to all the circum-stances of the case. It would be in con-formity with justice if the decree-holders were directed to pay interest from the date there was no longer any obstacle in withdrawing the money. No contrary decision has been brought to our notice. Such a rule, in our opinion, does justice to both the parties. Interest will not be payable on the amount deposited so long as the obstacle to its withdrawal subsists. Applying this rule to the present case there is no escape from the conclusion that the obstacle placed in the way of the appellant was withdrawn only when the security was accepted by the Executing Court and the decree-holder withdraw the amount. Thus the lower court, in our opinion, did not commit any error in allowing interest to the respondent only from 24-11-59 and not for any period anterior to it. As regards the period 17-12-1965 to 5-11-1966 it is clear from the facts narrated above that the amount had bten redeposited by the appellant on 17-12-1965 for payment to the respondent by way of restitution. The respondent did not make any application for withdrawing the amount. It is no doubt true that an application was filed on behalf of the appellant on 17-12-1965 that the Municipal Council be directed to furnish security before the amount is withdrawn by it but it appears that this application too was not pressed seriously and Court did not pass any order on this application. In these circumstances the lower court rightly came to the conclusion that no obstacle was put by the appellant in the way of the Municipal Council in withdrawing the amount which had been re~ depcsited by the appellant on 17-12-1965. Thus there is no force in this cross-objection and it deserves to be dismissed.

9. The net result is that we allow theappeal in part and modify the judgmentof the Executing Court and direct that therespondent shall be entitled to get interest at the rate of 4% per annum on thesum restituted instead of 6% per annumfor the period commencing from 24-11-1959 to 17-12-1965. The cross objectionfails and is hereby dismissed. In thecircumstances, we leave the parties tobear their own costs, of the appeal as wellas of the cross-objection.


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