Skip to content


S.R.V. Sivarama Prasad Bahadur, Rajah of Chillapalli Vs. Srinivasa Traders, a Joint Hindu Family Business Concern - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberAppeal No. 638 of 1954
Judge
Reported inAIR1959Mad220; (1959)1MLJ116
ActsContract Act, 1872 - Sections 73
AppellantS.R.V. Sivarama Prasad Bahadur, Rajah of Chillapalli
RespondentSrinivasa Traders, a Joint Hindu Family Business Concern
Appellant AdvocateR. Gopalaswami Iyengar, Adv.
Respondent AdvocateSrinivasagopalachari, Adv.
Cases Referred and Co. v. Murugesa Mudaliar
Excerpt:
- - the appellant failed to do so. srinivasagopalachari that this contention cannot hold good, as the appellant did not file a suit for damages, or even claim a set-off in this suit by paying the court-fee on rs. that position is clearly untenable, as urged by mr. it is well settled that money paid as advance by a purchaser to the vendor, in circumstances like this, cannot be retained as security, vide the ruling of a bench of this court in rattamma v......to retain the advance of rs. 12,500 and adjust it towards the damages. but he did not file a suit for damages, or even claim a set-off in this suit on that account. consequently there was no issue regarding that. there were only issues regarding jurisdiction and other matters. the learned subordinate judge granted a decree in favour of the plaintiffs for rs 12,500, with interest at 6 per cent per annum from 6-3-1952, the date of the plaint. hence this appeal. 2. we have perused the records, and heard the learned counsel on both sides. mr. r. gopalaswami aiyangar, for the appellant, and mr. srinivasagopalachari, for the plaintiffs-respondents, argued the case fully and fairly. mr. gopalaswami aiyangar urged that the lower court's decree was wrong, as the plaintiffs had committed.....
Judgment:

Panchapakesa Ayyar, J.

1. This appeal is by Sivarama Prasad Bahadur, the defendant in O. S. No. 84 of 1952 on the file of the Subordinate Judge of Coimbatore, against the decree and judgment in the suit. That was a suit filed by Srinivasa Traders, by family manager, P. S. Nara-yanan, for recovering the advance of Rs. 12,500, paid by them on 9-6-1951 to the appellant for the supply of 500 bags of free market Voyyur sugar at Rs. 177-8-0 per bag, plus sales-tax. Admittedly, the contract was never performed.

We need not here consider by whose fault it fell through. The appellant was asked finally by the plaintiffs, by a letter dated 14-9-1951, Ex. A. 5, to pay back the advance of Rs. 12,500 with interest, as the contract stood cancelled. The appellant failed to do so. Then the suit was filed. In his written statement, the appellant contended that the plaintiffs had committed breach of the contract, and that he was entitled to get damages of Rs. 13,500 from them, and was entitled to retain the advance of Rs. 12,500 and adjust it towards the damages.

But he did not file a suit for damages, or even claim a set-off in this suit on that account. Consequently there was no issue regarding that. There were only issues regarding jurisdiction and other matters. The learned Subordinate Judge granted a decree in favour of the plaintiffs for Rs 12,500, with interest at 6 per cent per annum from 6-3-1952, the date of the plaint. Hence this appeal.

2. We have perused the records, and heard the learned counsel on both sides. Mr. R. Gopalaswami Aiyangar, for the appellant, and Mr. Srinivasagopalachari, for the plaintiffs-respondents, argued the case fully and fairly. Mr. Gopalaswami Aiyangar urged that the lower Court's decree was wrong, as the plaintiffs had committed breach of contract and were liable to pay Rs. 13,500 to the appellant for damages as mentioned by him in his written statement.

We agree with Mr. Srinivasagopalachari that this contention cannot hold good, as the appellant did not file a suit for damages, or even claim a set-off in this suit by paying the Court-fee on Rs. 13,500 mentioned in the written statement, and get a decree. The next contention of Mr. Gopalaswami Aiyangar was that the lower Court's decree was wrong as the advance amount of Rs. 12,500 could be retained by the appellant as security for damages in a suit intended to be filed by him for damages.

That position is clearly untenable, as urged by Mr. Srinivasagopalachari. It is well settled that money paid as advance by a purchaser to the vendor, in circumstances like this, cannot be retained as security, vide the ruling of a Bench of this Court in Rattamma v. Krishnamurthi, 54 Mad LJ 40: AIR 1928 Mad 326, which ruling has been followed by another Bench of this Court recently in Sundararama lyer and Co. v. Murugesa Mudaliar, : AIR1957Mad228 . So, we reject this contention also.

3. The last contention of Mr. Gopalaswami Aiyangar was that, at any rate, interest should not have been awarded by the lower Court on the advance of Rs. 12,500, as there was no proof of a promise to pay interest, or of long detention of money with the implied understanding or liability to pay interest, and that interest could not be given till demand. We agree (bat interest was not payable till demand; but the demand was made, admittedly, on 14-9-1951.

The lower Court has given interest only from 6-3-1952, the date of the plaint aS the plaintiffs have not filed a memorandum of cross objections regarding the date from which interest was given they cannot claim interest now except from 6-3-1952, though, under the law, they would be entitled to claim interest from 14-9-1951. The six percent interest awarded by the lower Court was then attacked as too high in the circumstances.

It is, in our opinion, somewhat high, in the circumstance, and reduce it to three per cent. Mr. Gopalaswami Aiyangar said that instead of depositing the money into Court along with the plaint for damages, the appellant had only kept the money with himself. But it makes a world of difference. The money kept by the appellant could have been, and was very probable, used by him, and would have yielded some interest, at least three per cent per annum, considering that even the Government of India and the Post Office give four per cent interest on gilt-edged securities.

The money deposited in Court cannot be used by the party depositing them. That is a vital difference. Again, the Court would invest such large sums in Government securities and the net interest got would not be less than 3 per cent per annum. So, we have no hesitation in awarding interest at 3 per cent per annum from 6-3-1952.

4. In the view we have taken, it is unnecessary to go into the question as to who was responsible for the contract not going through.

5. In the end, we modify the judgment and decree of the lower Court by granting the plaintiff a decree for Rs. 12,500 with interest at 3 per cent per annum from the date of suit, 6-3-1952, till the dateof realisation, and by directing the defendant to paythe plaintiffs only proportionate costs on the sumso decreed. In other respects, the lower Court's judgment and decree are confirmed. In this appeal, wedirect all the parties to bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //