DESEIN PRIVATE LIMITED Vs. ANSAL PROP AND IND

JUDGEMENT

(1.) [Ed. facts : Pff. Co. in Jan., 82 gave Rs 10 lakh to Deft. and booked 2 commercial flats which were to-be built by Deft. at 38, Nehru Place. By letter dt. 7.1.85, Deft. told pff. as latter had not paid instalments, his allotment was cancelled and same can be restored on payment of Rs 8.65 lakhs or Deft. could take back balance sum on or before 15.1.85. Pff. did not exercise the option offered and instead filed suit for recovery of Rs 10 lakh and interest 7 lakh alleging cause of action arose upon receipt of letter dt. 7.1.85 on 10.1.85. The defence was that pff. was to pay instalment on 1.2.82, 31.3.82 and 15.5.82 and as pff. did not pay these, his allotment was cancelled and 20% price of the flat was forfeited. Deft. claimed that suit was barred by time and it was entitled to forfeit Rs 10 lakh and pff. was not entitled to any interest. Deft. did not execute any agreement about the bargain. It only sent some letter, demanding instalments and threatening cancellation. Then Deft. by letter dt. 7.1.85 informed that it had paid Rs 2 crore 3 lakh to DDA on 1.1.85 and it would soon get land and then begin construction. Deft. had also made offer of 2 options noted above. Pff. could claim refund only after this. Cause of action arose from the date of offer in 1985. Issue no. 3 is about interest.] After detailing above, judgment is :

(2.) Issue no. 3. The plaintiff has claimed interest on Rs. 10 lakh from the date of payment till the date of filing of the suit. On going through the pleadings of the parties and the documents filed by them and after hearing the arguments of the parties it is very apparent that interest cannot be awarded from the date of payment of Rs. 10 lakh. Reason being that there was no agreement between the parties that the amount of Rs. 10 lakh paid by the plaintiff to the defendant would earn interest at a rate of 24% from the date of payment. Admittedly this payment was made for booking flats and no stipulation was there that in case of any breach by the deft. the pff. would be entitled to interest at 24% from the date of payment. The learned counsel for the pff. also concedes that the pff. is not entitled to interest on Rs. 10 lakh from the date of payment till 15.1.85. His contention is that Rs. 10 lakh became due to the plaintiff from the deft. on 15.1.85, the date on which the deft. by its own letter dated 7.1.85 undertook to refund Rs. 10 lakh to the pff. Therefore, now only this much is to be considered whether the pff. is entitled to interest with effect from 15.1.85.

(3.) When the learned counsel for the pff. was confronted with the plea that the deft. was to refund the balance amount without interest he came out with an argument that the deft. could have refunded Rs. 10 lakh to the pff. on 15.1.85 without interest but if the deft- did not do so it became liable to pay interest to the pff. on Rs. 10 lakh from 15.1.85 at 24% p.a. On this pica a question arose whether without any agreement for payment of interest the deft. was liable to pay interest. Provisions of the Interest Act were perused. [In paras 19 and 20, S. 3 & S. 2(c) of Interest Act are reproduced].