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Gokhula and ors. Vs. N. Ramaswami Naicker - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Case NumberAppeal No. 586 of 1963
Judge
Reported inAIR1970Mad417; (1970)2MLJ104
ActsInterest Act, 1839 - Sections 1
AppellantGokhula and ors.
RespondentN. Ramaswami Naicker
Appellant AdvocateN.P. Govindachari, Adv.
Respondent AdvocateT.P. Gopalakrishnan and ;R. Kanakasabai, Advs.
DispositionAppeal dismissed
Cases ReferredSankaranaraina v. Kunhi Raman Nair
Excerpt:
interest act (xxxiii of 1839), section 1 - rent payable by tenant to landlord - interest on rent not payable in absence of agreement express or implied or custom or usage ; there could be no claim for interest on rent payable by a tenant to his landlord, in the absence of agreement express or implied, or custom or usage for the payment of such interest. this is not a case where interest is payable by law or court should consider it fit to allow interest as contemplated in section 1 of the interest act (xxxii of 1839). ; case-law discussed. - - .....3rd and 4th william iv, ch. 42, section 28, concerning the allowance of interest in certain cases. the claimant in that case was a mahomedan minor and she filed the suit for the recovery of her share of her father's assets from her co-heirs who had utilised the same to their own advantage. it was held that she was entitled, in addition to her share, to simple interest at the ordinary rate of six per cent per annum on the amount of her share of the assets from the date of her father's death. it should be noted that the defendants in that case were in fiduciary relationship with the plaintiff and the suit was for partition and separate possession of the minor plaintiff's share. in 1942-1 mad lj 250, at pp. 261 & 267 = (air 1942 mad 429 at pp. 434 & 437) the suit was to recover.....
Judgment:
1. This appeal relates to the interest disallowed by the learned Subordinate Judge Dindigul in O. S. 43 of 1961 on the file of the Subordinate Court for the period prior to the date of demand for interest made by notice Ex. A.2 dated 26-10-1960. Defendant Ramaswami Naicker executed a registered lease deed, original of Ex. A-1, dated 22-3-1954, in favour of Thirumulu Subbu Chettiar for a period of five years. The lessor Thirumulu Subbu Chettiar filed O. S. 37 of 1955 for first year's rent and another suit O. S. No. 47 of 1957 for the succeeding two years' rent.

He filed the present suit, O. S. No. 43 of 1961, for recovery of rent for the last two years of the lease and the period upto 28-11-1959 when the defendant surrendered possession of the leasehold lands. There is no dispute about the actual amount payable by the defendant to the lessor Thirumulu Subbu Chettiar and in fact the amount was fixed by a joint memo dated 24-10-1962 filed by the parties in the lower Court. The defendant did not also dispute his liability to pay interest from the date of demand made for the first time by notice Ex. A-2 dated 26-10-1960. The plaintiff Thirmulu Sabbu Chettiar died subsequent to the filing of the suit and his legal representatives are plaintiffs 2 to 14, who are the appellants in this appeal.

2. The learned Advocate for the appellants admitted in his opening argument that there was no agreement, express or implied, to pay interest and that there was no usage or custom under which the defendant is bound to pay interest on arrears of rent. He lays his claim for interest under Section 1 of the Interest Act 1839 which runs as follows:--

"It is, therefore, hereby enacted that, upon all debts or sums certain payable at a certain time or otherwise, the Court before which such debts or sums may be recovered may, if it shall think fit, allow Interest to the creditor at a rate not exceeding the current rate of Interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time, or if payable otherwise, then from the time when demand of payment shall have been made In writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term of payment; provided that Interest shall be payable In all cases in which it is now payable by law."

3. In B. N. Rly. Co. Ltd. v. Ruttanji Ramji, 1938-1 Mad LJ G40 at pp. 644 and 645 = (AIR 1938 PC 67 at p. 70) the Privy Council has considered the principles of law regarding the award of interest with reference to the provisions of the Interest Act. The following passage in the judgment is relevant:--

"The crucial question, however, is whether the Court has authority to allow interest for the period prior to the institution of the suit, and the solution of this question depends, not upon the Civil P. C., but upon substantive law. Now, Interest for the period prior to the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to recover Interest, as for instance, under Section 80 of the Negoliable Instruments Act 1881 the Court may award interest at the rate of six per cent per annum, when no rate of interest is specified in the promissory note or bill of exchange. There is in the present case neither usage nor any contract express or implied to justify the award of interest Nor is interest payable by virtue of any provision of the law governing the case. Under the Interest Act 32 of 1839, the Court may allow interest to the plaintiff, if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument But it is conceded that the amount claimed in this case was not a sum certain. The Interest Act, however, contains a proviso that 'interest shall be payable in all cases in which it is now payable by law.' This proviso applies to cases in which the Court of Equity exercises jurisdiction to allow interest. As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co. Ltd. v. Hart, 1929 AC 631. 640 = (AIR 1929 PC 185 at p. 188) in order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as, for example, the non-performance of a contract of which equity can give specific performance. The present case does not, however, attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso."

In Vithal Dass v. Rupchand, the Supreme Court has

relied upon the above Privy Council decision and held that it is well established that interest may be awarded for the period prior to the date of the institution of the suit, if there is an agreement for the payment of interest or if interest is payable by the usage of trade having the force of law, or under the provisions of any substantive law as for instance Section 80 of the Negotiable Instruments Act or Section 23 of the Trusts Act. It is pointed out that, under the Interest Act, 1839, the Court may allow interest to the plaintiff, if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument. The Supreme Court referred to the fact that Section 1 of the Act contains a provision that interest shall be payable in all cases in which it is now payable by law and pointed out that the provision only applies to cases in which the Court of Equity exercises jurisdiction to allow interest. The claim in that case was against a partner in possession of the properties who had collected rents, to account for the income, and the said claim was negatived,

4. Mr. M. Sitharama Aiyar appearing for the appellant relied on the decisions in Mohamed Abdul Gaffur Rowther v. Hamida Beevi Ammal, 36 Mad LJ 456 = (AIR 1919 Mad 164) and Rayalamma v. Butchiramayya, 1942-1 Mad LJ 250 = (AIR 1942 Mad 429) in support of his contention that the Court has discretion to award interest on the arrears of rent claimed in the suit under the provisions of the Interest Act. In 36 Mad LJ 456 = (AIR 1919 Mad 164) it was held that the Interest Act is not exhaustive of all claims to interest and it is open to the Courts in India to award interest, in a proper case, independently of the provisions of the Act It is observed in the decision that, without going into details, it may be mentioned that the object of 3 and 4 William IV, Chapter 42, Section 28, which was extended to India by Act 32 of 1839, was to repeal the Usury Laws relating to interest It is clear from the preamble to the Interest Act that it is expedient to extend the provisions of the statute 3rd and 4th William IV, Ch. 42, Section 28, concerning the allowance of interest in certain cases. The claimant in that case was a Mahomedan minor and she filed the suit for the recovery of her share of her father's assets from her co-heirs who had utilised the same to their own advantage. It was held that she was entitled, in addition to her share, to simple interest at the ordinary rate of six per cent per annum on the amount of her share of the assets from the date of her father's death. It should be noted that the defendants in that case were in fiduciary relationship with the plaintiff and the suit was for partition and separate possession of the minor plaintiff's share. In 1942-1 Mad LJ 250, at pp. 261 & 267 = (AIR 1942 Mad 429 at pp. 434 & 437) the suit was to recover owelty payable under the partition deed and it was held that interest could be awarded under the proviso to Section 1 of the Interest Act, as a case where the Court of Equity would grant it interest. In that case, the learned advocate for the respondents contended that, in order to attract the equitable jurisdiction of the Courts, the legal relationship between the parties must necessarily be such as mentioned in Halsbury's Laws of England, first Edn, Vol. XXI, para 74 at pages 40 and 41 and inasmuch as the jural relationship between the parties to the present suit did not fall under one of the heads mentioned therein, the equitable jurisdiction could not have been exercised by the Courts and interest could not be. therefore, said to be 'payable by law.' It was, however, held, that, having regard to the fact that the defendants had been realising the income of the plaintiff's share in the joint property under the deed of partition even from the 1st July 1929 without discharging the debt that they were liable to pay under the terms of the partition deed, it may not be incorrect to award Interest under the proviso to Section 1 of the Interest Act even If the analogy of a vendor and purchaser may not be Strictly applicable to the case. In fact, Venkataramana Rao J. referred to the contention of the respondents' advocate, Mr. Govindarajachari, based upon the passage in Halsbury's Laws of England, at page 40, already referred to, that the Case of partition is mentioned as one of the cases where a Court of Equity would grant interest, that the cases mentioned therein are only illustrative and not exhaustive, and that the passage clearly Indicates that where the relationship of a vendor and purchaser exists between the parties the Court of Equity would award interest. Under Section 55 of the Transfer of Property Act, such a claim for interest by a vendor against his vendee has been statutorily recognised But it is Clear from the decisions relied on by the learned advocate for the appellant that In all those cases there was legal liability to pay interest and in such cases there would be no difficulty in invoking the provisions of the Interest Act.

5. Mr. Sitharama Aiyar referred to the decision in Nanchappa v. Vetersseri Tarward Karnavan, AIR 1927 Mad 47, where Phillips J. awarded interest in a claim made by a landlord against a tenant. The decision in that case is that it is impossible to say that equitable principle should be applied only in cases of contract, and that a question of equity must apply to all cases. No one can dispute this principle. But the learned Judge has proceeded to state as follows:

"In the present case there is no doubt that the plaintiffs have been kept out of their money for a very unreasonable period and on equitable principles they are entitled to some compensation. Therefore, I allow interest at six per cent until the date of payment into court".

He had not even referred in the context to the jural relationship between the parties. It should be noted that the suit was by the landlord against the tenant. In fact, we shall refer to the later decisions of this court where such a claim for interest by landlord against tenant in the absence of agreement, express or implied or usage has been negatived. The learned advocate for the appellant also relied on the decision in Bhagauti Shukul v. Chandrika Prasad, AIR 1933 All 147, which was cited before the lower court. But it is the decision of a single Judge of Allahabad High Court and there is no discussion of any principle. No doubt, the suit in that case was by a lessor for recovery of the unpaid balance of the premium in respect of a lease and Interest by way of damages. The only discussion about the claim for interest is in the last paragraph of the judgment and it is as follows:--

"Lastly exception is taken to the lower court having allowed interest in the absence of any agreement that interest would be paid on the sum due. Interest by way of damages for failure to pay as agreed could be allowed and has been rightly decreed."

There are number of decisions of this court where such claim for interest on arrears of rent has been disallowed, in the absence of any agreement, express or implied, or custom or usage for payment of such interest. The decision of Venkatasubba Rao J. in Sankaralingam v. Kuppuswami, AIR 1935 Mad 305 (2), and that of Varadachariar J. in Sankaranaraina v. Kunhi Raman Nair, AIR1935 Mad 794 are clear authorities for the position that there could be no claim for interest on rent payable by a tenant to his landlord, in the absence of an agreement, express or implied, or custom or usage for the payment of such interest. In fact, the learned Advocate for the respondents stated that, even in prior suits, such claim for interest was made by the first plaintiff in this suit and the same was negatived by the trial court and this court. A.S. 190 of 1961 on the file of this court was against the decree and judgment in O.S. 47 of 1957 on the file of the lower court The only question argued in that appeal related to the interest disallowed by the trial court as in this case. Veeraswami J. (as he then was) dismissed the appeal with the observation that the court below was right in disallowing interest. This is not a case where interest is payable by law or court should consider it fit to allow interest as contemplated in Section 1 of the Interest Act.

6. The decree and judgment of the Sub Court, Dindigul, are correct and they are confirmed. The appeal is totally devoid of merits and it is dismissed with costs.


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