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TMI Blog1999 (8) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... riting to deposit the said amount with the plaintiff bank which was not done. A letter of demand dated 27.2.1985 and then legal notice dated 22/24.7.1985 were saved on the defendant claiming a sum of Rs. 99,479.97 due in his current account. This having not been paid, plaintiff has filed this suit with interest @ 18% per annum for the period 3.6.1983 to 31.3.1985 and thereafter @ 17.5% per annum till the filing of the suit being the prevalent rates of interest charged by the bank. Accordingly the plaintiff has filed the present suit. 3. The defendant filed the written statement primarily contesting his liability to pay interest. It is not disputed that the defendant had issued a cheque of Rs. 1.00 lakh on 4.6.1983 in this account and having purchased a bank draft of Rs. 1.00 lakh in favor of M/s. Bombay Oil Industries Pvt. Ltd. He has taken the plea that the amount was withdrawn by the defendant honestly and bona fide, acting on the representation of the staff of the plaintiff bank that the amount was due in his account and that the plaintiff bank is estopped from claiming any amount from the defendant. However, he, by way of compromise, was prepared to pay Rs.1.00 lakh in easy ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not paid this amount, he is liable to pay the same with interest at the rate applicable to overdraft facilities granted by the bank to its customers which according to him initially was 18% per annum and subsequently 17.5% per annum as deposed by PW-1. He has relied on certain authorities. He has also contended that the interest is also payable under Interest Act as notice of demand claiming interest was served on the defendant; even otherwise, the defendant had used the money of the plaintiff, so the defendant is liable to compensate the plaintiff for the loss of interest suffered by it. Learned counsel for the defendant has contended that the defendant is not liable to pay interest as the amount was withdrawn by the defendant after ascertaining from the bank that he had credit balance to withdraw this amount, he had acted bona fide and the defendant is not liable to pay any interest under law. He has not supported his contention by any case law. 8. I have considered these contentions. As noticed above, it is not disputed by the defendant that the account of the defendant had been wrongly credited in excess by Rs. 1.00 lakh by mistake on the part of the plaintiff bank and the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule of law or usage having the force of law. Other rule of law will include the power of the Court to award interest on equitable grounds. Section 72 of the Contract Act enacts an equitable principle that where a person has received money from another which he was not entitled to, must refund it to the former. This provision is obviously intended to prevent an unjust enrichment. In other words, the person who has been deprived of his money which legitimately belonged to him, should be re- stored the same. The remedy provided under Section 72 is an action in restitution and is based on equity. 12. In N.V. Joseph Vs . Union of India, AIR 1957 Ker 3 , a Division Bench of the Kerala High Court has held that ordinarily interest cannot be claimed merely because money has been detained as a result of the defendant's acts or misconduct. But if it is possible to invoke a rule of equity by establishing the existence of a state of circumstances which attracts the equitable jurisdiction, there can be no doubt that interest can be allowed . In that case, the defendant had received the remittances of salary after the termination of his post for over one year which was being paid by mistake a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri K.L. Sachdeva, who was the Branch Manager of the plaintiff bank at the relevant time, has deposed that the rate of interest under overdraft facility was 18% per annum when the amount was overdrawn and subsequently from 1.4.1985 it was reduced to 17.5% per annum till the date of filing of the suit and the interest was payable quarterly. He has also deposed that the rates of interest were prescribed by the Reserve Bank of India. Obviously, Reserve Bank of India prescribes rates of interest on various categories of loans under Banking Regulations Act, 1949 and these are binding on the specified banks. There is neither cross-examination of PW-1 on this aspect nor there is any evidence led in rebuttal by the defendant. This testimony of this witness remains unchallenged. 16. The plaintiff is thus entitled to interest @ 18% per annum from 4.6.1983 when the amount was overdrawn till 31.3.1985 and from 1.4.1985 till 24.10.1985 when the suit was filed at the rate of 17.5% per annum with quarterly rests. In the plaint, the plaintiff has claimed interest on the outstanding amount of Rs. 99,479.97 amounting to Rs. 51,839.64. That this amount of interest would accrue at the aforesaid rates i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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