STATE OF GOA Vs. K HASSAINER

JUDGEMENT

(1.) THE question involved in this First Appeal is whether the trial Court could award interest at a rate above 6% per annum on a transaction, during the pendency of the suit as well as from the date of decree till the actual payment.

(2.) THE appellants awarded different contracts to the respondent for laying of pipelines and maintenance of water supply systems at Vasco da Gama. These contracts were awarded between September, 1982 to September, 1983 to the respondent. It appears that the respondent completed three of the works within the stipulated time, out of the five contracts. Bills were submitted by the respondent which remained unpaid. The respondent, therefore, filed a suit on 4th December, 1998, against the appellants for recovery of an amount of Rs. 37,965/-, which was later on amended to Rs. 33,857. 75 p. and for interest thereon of Rs. l,08,687/- along with further interest at the rate of 18% per annum, from the date of decree till realization. It appears that no written statement was filed by the appellants and the suit was fixed for ex parte orders on 9th June, 1999. The appellants filed an application on 22nd September, 1999, for setting aside the order fixing the matter for ex parte orders as also an application for condonation of delay. Both these applications were dismissed by the trial Court on 9th April, 2002. A revision was filed against this Order by the appellants which was withdrawn in view of the amendment to Section 115 of the Code of Civil Procedure. The appellants then filed their written submissions along with the statement of accounts in the trial Court. The trial Court on the basis of the record before it decreed the suit and awarded the respondents Rs. 33,857. 75 p. alongwith interest at the rate of 12% per annum, upto the date of filing of the suit. Further interest was awarded at the rate of 10% per annum till the actual payment.

(3.) THE appellants have made a grievance that the trial Court was not justified in rejecting the application made by them for setting aside the order fixing the matter for ex parte decree. According to the appellants, the circumstances due to which such an order was passed ought to have been considered by the trial Court before rejecting their application. It was submitted that the appellants should not be penalized for negligence of their advocate. It was also submitted that the appellants ought to have been permitted to file their written statement to defend the suit. It is urged that the trial Court was not justified in awarding interest at the rate of 12% per annum on an amount of Rs. 33,857. 75 p. when the appellants had already paid an amount of Rs. 22,074/- on 10th April, 2002. It is further submitted that the transaction between the appellants and the respondent being one which was not commercial in nature, the trial Court could not have awarded more than 6% interest under Section 34 of the Civil Procedure Code.