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TMI Blog2017 (4) TMI 1649X X X X Extracts X X X X X X X X Extracts X X X X ..... of loan; (ii) that the plaintiff, instead of giving loan of Rs. 5 crores, gave a loan of Rs. 3.75 crores on the same terms with which he was lured; (iii) that the said amount of Rs. 3.75 crores was paid by two cheques for Rs. 25 lakhs each and by further payment of Rs. 3.25 crores in instalments duly acknowledged and accepted by the defendants; (iv) that all payments were taken in the name of the defendant No. 4 company; (v) that the defendants however did not issue shares of the defendant No. 4 company in favour of the plaintiff and also did not pay monthly interest as was promised; (vi) that the defendants also did not re-pay the loan; (vii) that besides the principal sum of Rs. 3.75 crores, the defendants, till the date of institution of the suit are also liable to pay a sum of Rs. 1,57,50,000/- towards interest @ 18% from 1st November, 2013 on the said amount of Rs. 3.75 crores; pendente lite and future interest @ 18% is also claimed. 2. The suit came up for admission before this Court on 31st May, 2016, when the defendants No. 1 to 3 were not found to be necessary and proper parties to the suit and their names were struck off from the array of defendants and summons issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was by way of a friendly loan. Q. Have you repaid that money? A. There was no talk of repayment. At the time when the monies were paid by the plaintiff Gopesh Mehta, we were told that we could refund the same at any time as and when the company Swift Initiative Pvt. Ltd. starts making profit. Q. Is this money shown in the balance sheet of the company Swift Initiative Pvt. Ltd. as due to plaintiff Gopesh Mehta? A. Yes. It is shown as due to the plaintiff Gopesh Mehta in the balance sheet of the company Swift Initiative Pvt. Ltd. for the financial year 2013-14. Q. Is this money shown in the balance sheets of the subsequent years of the company Swift Initiative Pvt. Ltd.? A. Although, I have filed balance sheets for the financial years 2014-15 and 2015-16 but I have to verify whether it is shown as due to plaintiff Gopesh Mehta or not. Q. In your books of accounts, has any other money been shown as due to plaintiff Gopesh Mehta? A. Not at all. Q. Were there any other banking transactions between the plaintiff Gopesh Mehta on the one hand and any of the defendants on the other hand? A. No. Q. What interest was agreed to be paid? A. No interest was agreed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant; (c) that the power of the Court to allow pre-suit interest is contained in Section 3 of the Interest Act, 1978, which is as under: "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 the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings: Provided that where the amount of the debt or damages has been repaid before the institution of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Singh v. Mangloo Ram Bansal (2008) 146 DLT 50 holding that in the absence of a written instrument under which the debt is payable at a certain time and an averment of any agreement with the defendant regarding payment of interest or of any usage having the force of law regarding payment of interest, the claim for pre-suit interest can be sustained only if it is proved that a written notice of demand to that effect has been issued; since in that case admittedly no written notice was issued claiming interest, no amount towards pre-suit interest was awarded." 12. Per contra, the counsel for the plaintiff has argued that the defendant has not given any explanation for non-refund of Rs. 50 lakhs admittedly due to the plaintiff. Reliance was placed on Aditya Mass Communications (P) Ltd. v. A.P.S.R.T.C. AIR 2003 SC 3411 where it was held that the quantum of interest which a Court may allow in a given case is governed by the facts of the case and not by any precedent law unless, of course, limited by a statute and that if a Court comes to the conclusion on a given set of facts that a party has been wrongly denied the use of its own money, it is the duty of the Court to see that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise payable by virtue of any enactment or other rule of law or usage having force of law; other rule of law would include the power of the court to award interest on equitable grounds. 19. Yet earlier, in Union of India v. National Overseas and Grindlays Bank Ltd. also this Court held interest is recoverable both at law and in equity on money obtained by fraud or conversion and retained by a defendant and that the Interest Act is not exhaustive of all claims as to interest and it is open to the courts to award interest in cases not coming strictly within the purview of the said Act, on principles of equity, justice and good conscience. 20. Both the aforesaid judgments also, applying which, in my opinion the plaintiff is entitled to pre-suit interest owing to attempt by defendant to deprive the plaintiff of his dues by taking a false plea before the court, remained to be noticed in Zile Singh supra. Though Zile Singh relies on the judgment of Division Bench of Madras High Court in Batliboi & Co. Ltd. supra but the Madras High Court also, as far back as in Sena Muhammad Abdul Gaffur Rowthar v. Hamida Beevi Ammal AIR 1919 Mad. 164 held that Interest Act is not comprehensive of a ..... 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