GORDHANDAS MADHAVJI Vs. VALAMJI KHETSI
LAWS(GJH)-1966-7-5
HIGH COURT OF GUJARAT
Decided on July 29,1966

GORDHANDAS MADHAVJI Appellant
VERSUS
VALAMJI KHETSI Respondents

JUDGEMENT

P.N.BHAGWATI, A.D.DESAI - (1.) THE defendants in this appeal complain against a decree passed by the Civil Judge Senior Division Jamnagar making the decretal amount payable by instalments of Rs. 5 0 per year and awarding interest on the decretal amount at the rate of nine per cent per annum from the date of the decree till payment. THE complaint of the defendants is that the instalments should have been for a smaller amount and that interest should not have been awarded at a rate exceeding six per cent per annum from the date of the decree to the date of payment. THE plaintiffs filed the present suit against the defendants to recover a sum of Rs. 34 627 ps. together with interest at the rate of nine per cent per annum being the amount due under a Khata executed by the defendants in favour of the plaintiffs. THE plaintiffs claim was resisted by the defendants on various technical grounds but they were all negatived by the learned trial Judge and there is no controversy about them in the present appeal. On the merits the defendants did not dispute the plaintiffs claim but their contention was that having regard to their financial condition they should be granted instalments for payment of the amount of the plaintiffs claim and the question as to whether the defendants should be granted any instalments and if so in what amount therefore formed the main subject matter of controversy between the parties in the suit Considerable evidence was led on behalf of the defendants to show that they were financially in a bad way and were not in a position to pay up the amount of the plaintiffs claim at a time and this evidence was seriously challenged on behalf of the plaintiffs. THE learned trial Judge on a consideration of the evidence came to the conclusion that the defendants financial position was far from satisfactory and having regard to all the facts and circumstances of the case the amount of the plaintiffs claim should be made payable by instalments of Rs. 5 0 per year. THE learned trial Judge accordingly passed a decree in favour of the plaintiffs for Rs. 34 627 ps. together with interest on Rs. 34 612 ps. at the rate of 9 per cent per annum from the date of suit till realisation and costs of the suit and directed that the decretal amount shall be payable by the defendants to the plaintiffs in yearly instalments of Rs. 5 0 commencing from 1st May 1965 each subsequent instalment being payable on the 1st May of each succeeding year and that in default of payment of any two successive instalments the plaintiffs shall be entitled to recover the whole of the decretal amount or the balance thereof then remaining due forthwith from the defendants. THE defendants were dissatisfied with the decree in so far as it made the decretal amount payable by instalments of Rs. 5 0 each for they wanted instalments of a smaller amount and they therefore preferred the present appeal in this Court. THE plaintiffs also preferred cross-objections since their contention was that no instalments at all should have been granted to the defendants.
(2.) THE first contention urged by Mr. Chhaya learned advocate appearing on behalf of the defendants was that whatever might be the instalments granted by the learned trial Judge he was clearly in error in awarding interest to the plaintiffs at the rate of nine per cent per annum from the date of the decree till payment. Mr. Chhaya urged that under sec. 34 of the Code of Civil Procedure there was a limitation imposed on the power of the Court to award interest from the date of the decree to the date of payment and that limitation was that interest should not in any event exceed six per cent per annum. This limitation contended Mr. Chhaya was violated by the learned trial Judge in awarding interest at the rate of nine per cent per annum from the date of the decree till realisation and that the decree should therefore in any event be modified by awarding interest at the rate of six per cent per annum instead of nine per cent per annum from the date of the decree upto the date of payment. Now there is no doubt that sec. 34 does impose a ceiling on the rate at which interest can be awarded by the Court from the date of the decree to the date of payment while making provision in the decree for such interest but the present case we think is not governed by sec. 34. Sec. 34 is a general provision dealing with the question of interest in a decree for the payment of money and it provides that where and in so far as the decree is for the payment of money the Court can in the decree order interest at such rate as the Court thinks reasonable on the principal sum adjudged from the date of the suit till the date of the decree and further interest on such principal sum from the date of the decree to the date of payment at such rate not exceeding six per cent per annum as the Court deems reasonable. Where therefore the Court passes a decree without anything more the rate at which the Court can award interest on the principal sum from the date of the decree to the date of the payment cannot exceed six per cent per annum. But where the Court passes a decree and postpones payment of the decretal amount or makes the decretal amount payable by instalments in exercise of its power under Order 20 Rule 11 the provision made in Order 20 Rule 11 would govern the question of interest and not the provision made in sec. 34. Order 20 Rule 11 sub-rule (1)-that is the sub-rule with which we are concerned in the present case-provides that where and in so far as the decree is for the payment of money the Court may for any sufficient reason at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments with or without interest notwithstanding anything contained in the contract under which the money is payable. This sub-rule confers power on the Court at the time of passing the decree to postpone payment of the amount decreed or to make it payable by instalments. But for this provision it would appear that the Court would have no such power and the judgment-creditor would be entitled to execute the decree immediately against the judgment-debtor. Where the judgment-creditor is entitled to execute the decree immediately against the judgment-debtor the judgment-creditor has the security of the decree which he can execute forthwith if he so chooses and therefore the Legislature provided for a reduced interest from the date of the decree to the date of payment in sec. 34 by imposing the ceiling of six per cent per annum. But where the Court postpones payment of the decretal amount or makes the decretal amount payable by instalments so that the judgment-creditor is not entitled to execute the decree forthwith against the judgment-debtor the reason for the limitation of the rate of interest would not apply and the Legislature therefore left the power of the Court in regard to interest unfettered under Order 20 Rule 11 by using the words with or without interest without any limitation as to the rate of interest. Order 20 Rule 11 is a self-contained provision dealing with the power of the Court to make an order postponing payment of the decretal amount or making it payable by instalments. Subrule (1) confers power on the Court to make such an order at the time of the passing of the decree if there is sufficient reason to do so. But the amount decreed would not include future interest from the date of the decree. What then is to happen in regard to such interest ? Subrule (1) makes provision in this behalf also and says that the Court may order that payment of the amount decreed shall be postponed or shall be made payable by instalments with or without interest. THE provision in regard to interest from the date of the decree in a case where payment of the decretal amount is postponed or the decretal amount is made payable by instalments is thus made in sub-rule (1) itself and that subrule confers discretionary power on the Court either to refuse interest altogether or to award interest without any limitation as to rate of interest. So also is the case in sub-rule (2). Sub-rule (2) confers power on the Court to make an order postponing payment of the decretal amount or making the decretal amount payable by instalments after the passing of the decree. Such an order can be made by the Court on the application of the judgment-debtor only if decree holder consents and in such a case the Court can lay down such terms as to payment of interest as it thinks fit. Here again we find that provision in regard to interest from the date of the order is made in sub-rule (2) itself and full and absolute discretion is conferred on the Court in the matter of award of interest. It will thus be seen that each of the two sub-rules of Order 20 Rule 11 enacts a self-contained provision conferring power on the Court to postpone payment of the decretal amount or to make it payable by instalments and providing for award of interest from the date of the decree or order as the case may be. THEre is therefore no scope or need to resort to sec. 34 so far as the award of interest from the date of the decree upto the date of payment is concerned and the limitation as to rate of interest specified in sec. 34 cannot be invoked where the Court is acting under Order 20 Rule 11 sub-rule (1) or (2). We must. therefore reject the contention of Mr. Chhaya that in view of sec. 34 the learned trial Judge was not entitled to award interest from the date of the decree upto the date of payment at the rate of nine per cent per annum. THE learned trial Judge had ample discretion under Order 20 Rule 11 sub-rule (1) to award interest at such rate as he thought fit and we do not see any reason why we should interfere with the exercise of the discretion by the learned trial Judge in awarding interest at the rate of nine per cent per annum. THE decretal amount was Rs. 34 627 ps. and the learned trial Judge granted yearly instalments in the sum of Rs. 5 0 each for payment of this decretal amount. According to these instalments the full payment of the decretal amount would take about seven to eight years and if the plaintiffs were to be kept out of their moneys for such a long period it is not at all unreasonable that they should be awarded interest at the rate of nine per cent per annum which is three per cent less than the maximum rate of interest permitted to be recovered even under the Bombay Money Lenders Act 1946 (THE rest of the judgment is not material for the reports.) Appeal dismissed.;


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