MUHAMMED Vs. E P BROTHERS

JUDGEMENT

(1.) The only question to be considered in this appeal is as to whether the defendant / appellant is liable to pay interest on the amounts received by him on account of the failure to supply soft wood to the plaintiff as agreed by him in Ext. A1 agreement. The defendant received an amount of Rs. 25,000/- in two installments. Rs. 15,000/- was received on 22-4-1986 and Rs. 10,000/- was received on 31 - 5-1985. Ext. A1 is the agreement. The defendant also executed a mortgage to secure the advance amount paid by the plaintiffs. Admittedly, the defendant did not supply the soft wood as agreed to. The plaintiffs filed the suit in 1989 and claimed interest on the amount due at 12% from the date of payment till realisation. The Trial Court has passed a decree for Rs. 33,826/- and future interest at the rate of 12% per annum on the principal of Rs. 25,000/-against the defendant personally and by sale of the plaint schedule properties.

(2.) In this appeal, it is contended that the direction for payment of interest is unsustainable. According to the appellant, there was no evidence to show that the plaintiffs have sustained any damage by reason of the breach of contract and therefore no direction for payment of interest should have been made in the judgment. It is also contended that there was no agreement to pay interest on failure of compliance with the terms of the contract.

(3.) The points for consideration in this appeal are (1) whether the plaintiffs are entitled to claim any interest, and (2) if so, at what rate.