IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 15717 of 2003(U)
1. SRI.D.RAJKUMAR, VILAYIL HOUSE,
... Petitioner
Vs
1. THE FOREST RANGE OFFICER, CHELLETH RANGE
... Respondent
2. THE SECRETARY, DEPARTMENT OF FOREST AND
3. THE EXECUTIVE ENGINEER,
For Petitioner :SRI.A.SUDHI VASUDEVAN
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
Dated :08/03/2007
O R D E R
C.N.RAMACHANDRAN NAIR, J
---------------------------------------------
W.P.(C).No.15717 of 2003
---------------------------------------------
Dated this the 8th day of March, 2007
JUDGMENT
Petitioner is challenging 48% interest demanded by the
Government for belated payment of sale proceeds for purchase
of teak poles. According to the petitioner, the rate of interest
imposed is highly exorbitant and unauthorised by statute. The
Government Pleader on the other hand contended that high rate
of interest was charged on the petitioner’s request for extension
of time for payment beyond period provided under tender
conditions. In fact, the rate of interest charged was initially at
18% which was increased to 24% and again to 48% per annum
because the time sought for by the petitioner for payment was
six months from the last date for payment. In principle, I find
the rate of interest charged is justified because progressive rates
of interest are charged as a disincentive against applying for
more time and in delaying payment. The sales condition is that
payment should be made within a reasonable time and on
default, sale gets cancelled, entitling reauction of goods at the
WPC15717/2003 Page numbers
risk and cost of the purchaser. In order to avoid this worse
consequence, petitioner applied for extension of time and there
is nothing wrong on the part of the Government in charging
high rate of interest as an incentive for early payment.
Therefore, in principle, the government is right in charging
penal interest at progressive rate in proportion to period of delay
in payment. However, this Court passed an interim order
permitting the petitioners to get the goods on payment of entire
balance amount with 27.5% interest. I direct the first
respondent not to demand any differential interest from the
petitioners for the consignment already lifted by him against
payment in terms of interim orders. However, penal charges
can be levied, in case there was delay in making payment and in
taking delivery beyond time granted by this court.
The O.P. is disposed of as above.
C.N.RAMACHANDRAN NAIR,
JUDGE
csl