ORDER
P.S. Narayana, J.
1. The plaintiff in O.S. No. 213 of 1983 on the file of the Subordinate Judge, Kakinada had preferred the present appeal questioning the judgment and decree of the Trial Court, so far it relates to grant of interest.
2. The appellant-plaintiff instituted the suit against the respondent-defendants for realisation of the total amount of Rs. 1,27,354.70 ps together with subsequent interest and cost. For the purpose of deciding the said short question all the factual details which are not in dispute between the parties may not be narrated. However, in short, the case of the appellant-plaintiff is that the plaintiff had entered a contract with M/s. Hindustan Levers Ltd., Bombay, to supply 20/100 M.T. of rice bran oil on 10.6.1982at the rate of Rs. 6,900 per M.T. that as per the said contract the plaintiff sent a consignment of the rice bran oil to the said Hindustan Lever Company Ltd., Bombay, from Samalkot Railway Station, and it was by way of a rail way wagon. Several particulars and details of the same had been narrated in the plaint and ultimately it was pleaded that the respondent-defendants are bound to reimburse the appellant-plaintiff for the loss and damage suffered by the plaintiff, on various accounts and hence for recovery of the value of short delivered rice bran oil of the quantity and the excess freight collected, etc. the suit was instituted. Not doubt, the 1st defendant had filed a written statement narrating several details and the 2nd defendant filed a memo adopting the said written statement and the 3rd defendant had not filed any written statement.
3. On the strength of the respective pleadings of the parties, the following issues and additional issues were settled:
(a) Whether the plaintiff has no locus-standi to file the suit?
(b) Whether the suit is liable to be dismissed for want of a notice under Section 78 (1-B) of the Indian Railway Act?
(c) Whether there was any negligence on the part of the defendants. If so, whether the plaintiff is entitled to damages?
(d) To what relief?
Additional issue framed on 6.12.1985:
(a) Whether the plaintiff is entitled to claim prior interest under the interest Act or otherwise?
Additional issue framed on 25.8.1988:
(b) What is the rate at which the plaintiff is entitled to interest, and, if so, for what period?
4. The Trial Court recorded the evidence of PWs 1 to 6 and Exs. A1 to A96 were marked. On behalf of the defendants, none were examined and no documents were marked.
5. The Trial Court, on appreciation of oral and documentary evidence decreed the suit against the respondent-defendants for an amount of Rs. 1,27,354.70 and also awarded simple interest only on Rs. 1,13,980/- @ 11 % per annum from 16.6.83, the immediate date next to the date of plaint till realisation thereof and for costs of the suit. Aggrieved by the rate of interest and also the date of granting of the interest, the appellant-plaintiff had preferred the present appeal.
6. Mr. Ravi Kumar, learned Counsel representing the appellant-plaintiff had submitted that the Trial Court having observed that the plaintiff is entitled to interest from the date of cause of action should have granted interest either from 30.9,1982 or from 10.6.1982 and hence the Trial Court had erred in not granting the interest for the said period. The learned Counsel had also taken me through the findings recorded by the Trial Court and had contended that in the facts and circumstances of the case though the claim was restricted to 11% only by the appellant-plaintiff, it being a commercial transaction even in the absence of any written contract relating to interest, the Trial Court should have exercised the discretion and should have granted interest @ 18% per annum. The learned Counsel had also taken me through several factual aspects and had contended that it is a fit case where the Trial Court should have exercised the discretion in proper perspective and hence the judgment and decree of the Trial Court are to be modified to the said extent. The learned Counsel had also placed reliance on Sri Srinivasa Co. v. Firm Vitta Dodda Hanumanthappa Anjayya Setti, ; Central Bank of India, Kutch v. P.R. Garments Industries Pvt. Ltd., Surendranagar and Ors., ; S.K. Engineering Works, Batala and Ors. v. New Bank of India, Batala, ; Bank of India v. Dr. Mrs. Mary George and Ors., . The learned Counsel had also drawn my attention to Section 34 of the Code of Civil Procedure and the provisions of the said Act.
7. Mr. Ravindra Kumar, learned Counsel representing the respondent-defendants on the other hand had contended that granting of interest and the rate of interest lies within the discretion of the Court, The learned Counsel had also taken me through the findings recorded at paras 50-67 of the judgment and had submitted that absolutely there is no illegality in the findings recorded by the Trial Court, even while granting interest and hence the appeal is liable to be dismissed.
8. Heard both the Counsels. The only question that had been canvassed by both the Counsel is relating to granting of interest. Hence the following points arise for consideration in the present appeal.
(a) Whether the appellant-plaintiff is entitled to interest from 30.9.1982 or 10.6.1982 as claimed by the appellant in the present appeal?
(b) Whether the appellant-plaintiff is entitled to the relief of interest as in the case of a commercial transaction?
(c) To what relief?
Points a and b:
9. For the purpose of convenience both the points can be discussed together. It is not in dispute between the parties that there is no written contract between the appellant-plaintiff and the railways relating to the rate of interest payable. It is also not indispute that the subject-matter of the suit is a transaction between the consigner and consignee and it is needless to say that it is a commercial transaction. As can be seen from the findings recorded, the appellant-plaintiff for reasons best known to him had claimed simple interest @ 11% per annum only and the same was granted. No doubt, the Bank Manager was examined on behalf of the appellant-plaintiff and also Ex. A9 was marked to show the rate of interest prevailing in the case of Banking institutions. Section 34 of the Code of Civil Procedure reads as follows:
Interest–(1) Where and insofar as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum, as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the Court think fit:
Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
Explanation I–In this sub-section, “nationalised Bank” means a corresponding new Bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970).
Explanation II–For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
(2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.
In Bank of India’s case (supra) while dealing with the aspect of contract of rate of interest, it was held that Court has discretion to determine the reasonable rate of interest irrespective of contract rate. It is no doubt true that in ordinary circumstances the claim of 18% interest in commercial transaction would have been reasonable. As already observed by me, the appellant-plaintiff had chosen to restrict the claim to 11% and the same was granted. In Central Bank of India’s case (supra), it was held that in commercial transaction by public financial institutions, the contractual rate of interest should be the rule and departure a rare exception. In Sri Srinivasa’s case (supra) “while dealing with this aspect it was held that where, in a loan borrowed in a commercial transaction, there was no contract as to the payment of interest or the rate of interest, the Proviso to Section 34 of the Civil Procedure Code enables the Court to award interest at the current rate allowed by Nationalised Banks on deposits. The claimant for interest must, however, adduce acceptable evidence as to the current rate of interest allowable by such Banks at the relevant time. In the absence of such evidence the Court has a discretion to allow a reasonable rate of interest. An award by the Court of interest @ 12 per cent per annum in this case was held not to be wrong or incorrect.”
10. The next aspect seriously urged was relating to the claim of interest from the date of cause of action i. e., 30.9.1982 or 10.6.1982. It is no doubt true that even the Trial Court had made such an observation at para 64-A of the judgment while discussing this aspect. But, however, at para 67 a finding had been recorded that during the course of the trial the plaintiff got the claim of interest amended as per the order dated 20.7.1988, passed in I. A. No. 1761/85, and, thereby, gave up the claim of interest @ 19.5% interest quarterly restricting it only to 11 % and further had given up the claim of interest to a tune of Rs. 7,000/-. It is no doubt true that the Trial Court is well justified in negativing the relief in view of the said amendments But, however, the only question with which the Court is left with is, whether the appellant-plaintiff is entitled to claim @ 11%’interest either from 30.9.1982 or 10.6.1982 the date of cause of action or not. As already referred to supra, the Trial Court had recorded a finding that the appellant-plaintiff is entitled to said interest from the date of cause of action and it is needless to say that the cause of action definitely arose on 10.6.1982 and to this extent the judgment and decree of the Trial Court are to be modified.
Point c:
11. In the light of the findings recorded by me above that the appellant-plaintiff is bound to succeed only to the extent of claim of interest @ 11% from 10.6.1982 to 15.6.1983 and as far as the claim of interest in excess of the 11% is concerned the same cannot be granted, since the appellant-plaintiff had restricted the claim to 11% in the Trial Court itself. Accordingly, the appeal is allowed to the extent indicated above inasmuch as the dispute is relating to the interest only and since the appellant-plaintiff had succeeded, in the facts and circumstances of the case, I direct both the parties to bear their own costs.