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TMI Blog2007 (11) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... dant entered into an agreement to sell dated 17.9.90 whereunder defendant agreed to sell an alternative plot which was to be allotted to him by DDA for a sale consideration of Rs. 2 lakhs. That pursuant to the said agreement the plaintiff paid earnest money in sum of Rs. 1 lakhs to the defendant on 17.9.90. That the balance sale consideration was to be paid at the time when the possession of the plot was to be handed over to the plaintiff and execution of sale deed and other necessary documents. That the defendant failed to perform its part of obligations under the agreement. That it was a stipulation of the agreement that in case of breach by the defendant he i.e. the defendant would be liable to pay to the plaintiff double the amount of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of the agreement till the date of the decree. 9. Vide order dated 21.5.07 following substantial question of law was formulated by this Court: 1. Whether the plaintiff was entitled to get interest from 17th September, 1990 to 5th June 1998, that is, the date on which the suit was filed without praying the same in the demand notice or in the plaint? 10. At the hearing today learned Counsel conceded that the substantial question of law as framed is not happily worded. Counsel concedes that the substantial question of law should read as under: In absence of any contract between the parties providing for payment of pre-suit interest and in light of the fact that no claim for pre-suit interest was raised by the plaintiff in the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose. The relevant portions of the said provisions are quoted hereunder: 3. Power of court to allow interest.-(1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say,- (a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings; (b) if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing cases, allow interest from the date specified below to the date of institution of the proceedings at such rate as the court may consider reasonable, unless the court is satisfied that there are special reasons why interest should not be allowed, namely : (a) where money or other property has been deposited as security for the performance of an obligation imposed by law or contract, from the date of the deposit; (b) where the obligation to pay money or restore any property arises by virtue of a fiduciary relationship, from the date of the cause of action; (c) where money or other property is obtained or retained by fraud, from the date of the cause of action; (d) where the claim is for dower or maintenance, from the date of the cause of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is discretionary for the court to consider the question of grant of interest. 15. The provisions contained in the Interest Act, 1978 are almost similar to the provisions contained in the Interest Act, 1839. While considering the question of payability of interest for the period prior to the date of filing of the suit, the Privy Council in the decision reported as Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji and Ors. observed as under: ...The crucial question however is whether the Court has authority to allow interest for the period prior to the institution of the suit; and the solution of this question depends, not upon the Civil Procedure Code, but upon substantive law. Now, interest for the period prior to the date of the suit may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of a creditor to recover interest from his debtor on a loan advanced to the latter by the former. It only shows that if any person breaks his contract to pay to another person a sum of money on a specified date, and in consequence of that breach the latter is unable to pay his debts and is ruined, the former is not liable to make good to the latter anything except the principal sum which he promised to pay, together with interest up to the date of payment. He is not liable to pay damages of a remote character. The illustration does not confer upon a creditor a right to recover interest upon a debt which is due to him, when he is not entitled to such interest under any provision of the law. Nor can an illustration have the effect of modif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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