The High Court · 2025

This appeal coming on for hearing and upon perusing the grounds of appeal' the Judgment and Decree of the Court below and the material papr-'rs in the case and upon hearing the arguments of Smt. tvlanjari S. Ganu, representing Sri IM Papa Reddy, Advocate for the appellants and of Srr P. Venugopal, Advocate for the Respondent No.2 arrd None Appeared for the Respondent Nc.'1 . This Court Doth Order and Decree as follows:

1. That the appeal be and hereby is partly allowed modifying the trial Court award to the c.xtent of interest to be payable to the respondents, herein;

2. That the appellant Nos.1 to 3 be and hereby are directed to pay respondent Nos.1 and 2 an amount of Rs.8,55,784l- with interest @ 12% per annum on the said amount from 31'r [/arch, 1 996 to the date of realizatiorr; and

3. That there shall be no order as to costs in this appeal. //TRUE COPY// Sd/- K. SRINIVASA RAO JroNr REGT'TRAR I SECTION dFTICEN To,

1. The lll Senior Civil Judge, City Civil Court, Secunderabad 2. Two CD Copies o HIGH COURT DATED:31 10112025 I I DECREE CCCA.No.167 of 20O7 trt: S fe 7U-, 1 22 FtB 2021: a ,,,? '-) I ,-) .-* Da s .'at -.i(-\ --) ' , z C .l- THE APPEAL IS PARTLY ALL.OWED I I | 34451 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD FRIDAY, THE THIRTY FIRST DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA CITY CIVIL COURT APPEAL No: 167 of 2O07 Appeal filed under section 96 of C.P.C. aggrieved by the Judgment and Decree dated 15-02-2007 passed in OS.No.391 of '1996 on the file of the Court of the lll Senior Civil Judge, City Civil Court, Secunderabad Between:

1. [Vl/s Bemco Sleepers Ltd., A Company lncorporated under the Companies Act, and having its Regd. Office No.3, Chetna Apartments, Station Road, Aurangabad. Represented by its Director. Sri Sudhir Deshpande S/o Sri Tukara Deshpande.

2. [\ills Vaman Poles Pvt Ltd, A Company lncorporated under the Companies Act, and having its Regd. Office No.3, Chetna Apartments, Station Road, Aurangabad. Represented by its Director. Sri Sudhir Deshpande S/o Sri Tukara Deshpande,

3. M/s Bhart Electric Poles [Vlanufacturing Co, a Proprietor Concern, having their office at No.3, Chetna Apartments, Station Road, Aurangabad. Represented by its Director. Sri Sudhir Deshpande S/o Sri Tukara Deshpande.

4. Sri Sudhir Deshpande, S/o Sri Thukaram Deshpande, Age.53 years, Occ: business, R/o. No.3, Chetna Apartments, Station Road, Aurangabad, lt/aharashtra State. ...Appellants/Defendants AND

1. tvl/s Shanti Wires Pvt Ltd, having its Office at Apartment No.102, Sterling Apartments, 5-4-33, 1't Floor, Distillery Road, Secunderabad. Rep. by ris Director V.C.Nahata.

2. Southern Prestress Wires Pvt Ltd, having its Office at Apartment No.102, Sterling Apartments 5-4-33, 1'' Floor, Distillery Road, Secunderabad rep. by its Director V.C. Nahata. ... Res po n d ents/P la i ntiffs l.A. NO: 1 OF 2007(CCCAMP. NO: 435 O F 20071 Petition unde- Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the peiitio;, if..," Higi, Court may ," pf."r"a- to stay^all further proc:edings including execution of the de,:ree in o s.t{o gg.l ot 1996 on the fire of the ,r senior civirludge, city civit court, secunderabad. l.A. NO: 2 OF 2007(CCCAMP. NO: 622 0F 20071 Between: southern Prestress wires pvt Ltd,.having its office at Apartment N0..r02, sterring fl03{19nts s-4-3:i, 1.r Ftoor, Disii,ery R"";;, S;;;;;rabad rep. by irs Director V.C. Nahata AND 1 2 ., \) 4 ...Petitioner/2nd respondenU2nd respondent [\4/s Bemco Sl,:eoers I trl A -Company lncorporated under th -- Companies Act, and havrnq its Reocr office 'N" 3 Cir;i;;;;rtments, titation Road. Auranqabad. p,-eoresentEd oy iis orrectoi"s-^ii"sriii,. Deshpande s/o sri Tukara Deshpande. It//s Vaman Poles pvt Ltd. A -Company lncorporated under the Companies Act, and havino its Reort Office fu; j, C;;6;';ilrtments, Station Road. +uranslbad R-epresent6d oy iis ri,r."it.i' "sii- {,[ii, D;;p;;;;' bi;l;i Tukara Deshpa nde. M/s Bhart Electrrc poles Manufacturing Co. a proprietor Concern, havino their office at No.3, Chetna Aoarrments, Siation Roa{ A;;;,G;;: R;;;:.*";i;li by its Director tjrr Sudh i r b""npun j"-S7o "Sii'iri"i.j'Ol"hpa Sri Sudhir Deshpande. S/o Sri Thukaram Deshpande Age:53 years, Occ: - oi;,;ft ,;;: fl,1rnl?ji;,l.Ir&1rNo 3 cherna Apartment- - sirti;; R"ir;, nde. 5 M/s Shanti Wire,; pvt Ltd. having its Office atApartment No..102, Sterlino .r rroor, D"isri,ery R;;. 5;;;;;;;"il;"'C"];:1; ;y, Apa rtments. 5 4.33 1 Director V.C.Nahata. . . . Re s p o n de n ts/petitio n ers/Ap pe lla n ts (5th respondent not necessary) ...Respondents/1.t respondenUl.t respondent Petitron under €iection 151 cpc praying that in the circumstances stated lilh: affidgvlr fited in support of the p"iition ir," Htgn Court may be pleased to vacate the interim order dated 05-07-07 made in iccnup No. 435 0f 2oo7 in CCCA No.167 of 2OO7 ^ +,s*q@atl;;r: y-:,"iaieaEry,E=...&r;'1r.i 1::::r.::r :Ii.iiiai!t;;:i.&; l.A. NO: 1 OF 2008(GCCAMP NO: 91 OF 2008) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased permit the petitioner to represent the company as Director by substituting her name i.e., Premlatha Nahata instead of her deceased husband i.e., V.C.Nahata. Counsel for the Appellants: Smt. Manjari S. Ganu, representing Sri M. Papa Reddy Counsel for the Respondent No.1: None Appeared Counsel for the Respondent No.2: Sri P. Venugopal The Court delivered the following: JUDGMENT i" i !:; r'i -l-. I THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON'BLE SMT. WSTICE TIRUMALA DEVI EADA CITY CryIL COURT APPEAL No.167 OF 2OO7 JUDGMENT: (Per Hon'ble Smt. Justice Ttrumala Deui Eada) This is al appeal fited by the appellants being aggrieved by the judgment ald decree, dated 15.02.2007, passed in O.S.No.391 of 1996 by the learned III Senior Civil Judge, City Civil Court, Secunderabad (for short "the trial Court',).

2. Heard Srnt.Manjari S.Ganu, learned counsel representing Sri M.Papa Reddy, learned counsel for tl.e appellants and Sri P.Venugopal, learned counsel for respondent No.2.

3. The appellants herein are the defendants and the respondents herein are the plaintiffs before the trial co,rt and the parties are addressed herein as they were arrayed in the suit before the tria-l Court for the sake of convenience.

4. The case of the plaintiffs before the trial Court was that they were carnring on business of Steel products and that the defendaats wer.e purchasing their products and were having a running accolrnt. During the course of busines s, the ) A(s,J & ETD,J CCCA No.167 of 2007 defendants have committed default in paying the outstanding dues and that on 06.10.1995 they entered into a Memorandum of Understanding that the defendant shall pay Rs.31,OO,0O0/- towards full and Iinal settlement of the claim and that they have paid only Rs.6,OO,O00/- out of the said amount and failed to pay the balance amount. Thus, the plaintiffs claimed Rs.63,17,383/- as on 31.08.1996 including the interest @ 24% per annum.

5. The defendants through their written statement admitted their transactions with the plaintiffs and also about the Memorandum of Understanding and their subsequent payment of Rs.6,00,000/-. They have denied the claim of the plaintiffs in the suit which is to a tune of Rs.63,17,383/-.

6. The trial Court framed the following issues for trial: sum of Rs.21,99,309/- from defendant No.1 as prayed for?

2. Whether the plaintiff No.I is entitled for recovery of a sum of Rs.2, 15 ,526 / - fron D2 as prayed for?

3. Whether the plaintiff No.l is enlitled to recover a sum of Rs. 1 1,22,5Aa / - from D2 and D3 as prayed for?

4. Whether plaintiff No.2 is entitled to recover a sum of Rs.27 ,79,960 / - from defendant No. 1 as prayed for?

5. Whether the defendants are liable to ir,terest @24%o p.a as prayed by the plaintiffs? pay future :t:a 3 A(s,J & ETO,J CCCA No.167 of 2007

6. Whether no credit is given for tJre pa5rment of Rs.6 .Lakhs in the total claim of Rs.63,17,382/- is contended try the defendants? Whether this court has no jurisdiction to tnr *re suit? 8 To r'yhat relieP"

7. The trial Court after considering the evidence on record has decreed the suit for a sum of Rs.26,75.000/_ against defendant Nos.1 to 3 jointly and severally in favour of both the plaintiffs. The suit claim against defendanl No.4 in his persona-l capacity is dismissed.

8. The defendants have thus filed this appeal. During the course of arguments learned counsel for the appellants has submitted that the interest must not have been arvarded against the total amount of Rs.25,OO,O00/_ and that it ought to have been awarded only on the principal amount.

9. Learned counsel for respondent No.2 has submitted that the trial Court has considered the entire evidence on record including the lrlemorandum of Understanding ..vhile passing the judgment and hence, has prayed to confirm the judgment and decree. I I I 4 AKS.J & ETD,J CCCA No.167 of 2007

10. The Court of flrst appeal is a last Court of record. Hence, after considering the averments of both sides, this Court frames the following Points for determination. 1 2 Whether the plaintiffs are entitled for recovery of the amount as claimed from the defendants and whether the defendalts are liable to pay the same? Whether the trial Court's judgment and decree is sustainable in law and under facts?

3. To what relieL2

11. POINT NO.1: a) A perusal of the trial Court record reveals that the defendants have admitted the transactions with the plaintiffs and also the execution of memorandum of understanding under Ex.A193. Though one of the grounds in filing the appeal happens to be denying the liability of defendant in paying the entire amount in the suit, during the course of arguments learned counsel for the appellants has fairly admitted the liability to pay the balance amount of Rs.8,55,784/- as mentioned in Ex.A193. Hence, there is no controversy about the payment of Principal amount but the only dispute is with regard to the payment of interest. },€:- -ia. 5 AKs,J & ETD,J CCCA No.167 of 2OO7 b) A perusal of Ex.Al93 reveals that at paragraph No.2 that a balance o1' Rs.8,55,7g4/_ is remaining payable to the plaintiffs by the defendant group of comparies and this balance has treen accepted by both the parties i.e. plaintiffs and defendants companies as true and correct. c) As disclosed from Ex.A193 since the principal amount is only Rs.8,55 ,784 l-, it is not proper to award interest on the entire suit claim. d) It is pertinent to refer to Section 34 of the Code of Civil Procedure, 1908 and the same is extracted hereunder: o34. Interest : "apij"i Awheae o!,C in so far as a decree is Jor the paAnant ol moneu, tt@ Cottrl mag, in th. decree, order interest at suclh iate ,"'tni ,:Zurt a"e,rrs reesonable to be poid on the Dincittol.su_ the"i'ate of t.e sutt to the dtup of the decree, in qddidon to "ig tiri.",ui.i))i;; .^ p.ri.naipot su.l Ior ona peiod prior to ti iiiiiii"'"t1i'""{iii,'iJ,i, n S"rn* n "r, Lnterest at sitch rate not exceedtng sw per cent. per arTnum, as the Cotlrt 1:1y,,::1:!* on such.pnncipit s_uit. f,i^'i[ i"i..iii.?"i,". to,,n uuti' ol pagn,ert. or lo such earlier date @s the Courl think J : [L'rouided thctt where the liabilit\ in relation to th,e sum so atTjudged lutd drken out of a commerciat tran_siction, tn" ,ot" of iu.i iiln "r' exceed.six pe;r cent. per annum, o"t ,irtL ,-t iii.liriii*riir""iilt ,"t" .1 ^ny tnterest ot LUtlete there is no controch&t rate, tJ@ rai i,iiLi"#l.g" or" iwi#'"Z' "J^^.,.i,rt lent or .aduanced bg nottondi_sed t"i transactions . iniZr.", i ExplanatiolL.-In this sub-section, ,,naionalised bank, me(Itts a coftespondi n! t t Leu bank a_s defrned- r1_t!e-Bo nking1"ir)^.ni." ii"qroirto, and. Translpr of llndenakingdAd, I g7O (s of I 926t. ,^::!:::::: For thp purposes of thi.s sectton, a rransrrcfton Ls rr commproal tra4saclion. if tt Ls conneaed *itn tn. i"a"rii'iroae o. business of ttp panu incaftina the taailng.l ltiJrl"i tlg'i;;'r1ia" oJ ctrt Pro.ed u re ( 4 n e n dne n t ) A ct. t e z o, s"" ti ii' i' i' 1 i. .It. ": i. i.5i :j f, t' 7 " T I I i I l 6 AKSJ & ETD,J CCCA No.167 of 2007 t!)Where such a decree is stlent uith respect to the paVnent of further interest [on such principal sum] lsubsdtuted bg Act 66 oJ 1956, Sectton 2, for ceiain uords. lfrom the ddte of the d.ecree to the date of pagment or ottter earLier date, thp Court shall be deemed to hdue rertlsed such interest, and q separate suit therefor shall not lie...." e) From a plain reading of the above section it is understood that the interest be imposed only on the principal sum. This Court is conscious of the fact that the suit is of the year 1996. To put an end to the litigation and in the facts and circumstances of the case a future intere st @l2Yo on the principal amount of Rs.8,55,7a4 / - is opined to be just and reasonable. The memorandum of understanding reveals that the interest shall not be imposed till March, 1996 and if any default is committed, the interest shall be imposed from 31.1 March, 1996. Therefore, from 31"t March, 1996 to the date of reaJlzatiorr the interest is awarded on the principal sum of Rs.8,55,784/ - @ l2%o per annum. f) The Constitutional Bench of the Apex Court in case of Central Bank of India o. Ro;ulnd.rat after discussing many cases including the decisions in case of Corpn.Bank v D.S.Gowdaz, Bank of Baroda v. Jagannath Pigment & '1zOO21 t Supreme Court Cases 367 ' 1tssa1 s scc zt: 7 AKs,] & ETD,J CCCA No.167 of 2007 Chemicals3 has held that the principal sum actuaily advanced coupled with the interest is capable of being adudged as principal sum on the date of the suit and the principat sum so adjudged is "such principa_l sum,, within the mealing of Section 34 of the Code of Civil procedure, 19Og on which the interest pendente lite and. future interest, at such rate iand for such period rvhich the court may deem fit, may be awarded by the Court. g) In a recent decision of the Apex Court in case of D.Khoslo. and Compang u, tlrrlor. of India+ while deciding a matter under the Arbitration Act, has hetd that Section 34 CpC provides that vrhere the decree is for paSrment of money, the court may order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged. Again, the reading of the aforesaid sub_section (1) of Section 3.1 CpC would reveal that the interest is payable on the principal sum adjudged and not on interest part of the award. ' (tggo) s scc o 1202a1 9 Supreme Court Cases 476 8 AKS,J & ETD,J CCCA No.167 of 2007 C. h) In the light of the decisions referred above and a_fter taking into consideration the grounds of appea_I and the arguments of the learned counsel, this Court is of the opinion that the interest has to be awarded only on the principal amount. i) The other contention raised by learned counsel for the appellalts is that defendant No.4 is not liable. The same finding is given by the trial Court ald hence, no indulgence is required on this aspect. Learned counsel for the appellants has further argued on the aspect that the Memorandum of Understanding is only between plaintiff No.1 and defendant No.l ald therefore, the other defendants are not liable to pay any arnount ald that plaintiff No.2 is not entitled to any amount. But Ex.A193 at paragraph Nos.1 and 3 disclose that the Memorandum of Understanding includes the 6ther group of compalies also. j) \ The said lines are extracted hereunder: "M/s.Shanti Wires pvt.Ltd. (SWPL) and other croup Companies of their vis. Southers prestress etc. have suppliel material to M/s.BEMCO Sieepers Ltd., (BSL) and other Gioup Companles viz. Vaman poles pvt.Ltd., Bharat Electric pole Mfg.Co. etc. M/s.SWPL raised bills various tirnes for the supplies to BSL arrd BSL paid those amounts substantially according to their financial position. The amounts were 9 AKS,J & ETD,J CCCA No.167 of 2007 normally pajd till the end of March 199 1. However dur: to certain diffrculties faced by BSL and other group companies during lasr: four years the pa5rment to SWPL for the bi11s raised by them for the H.T.Wire supplied to BSL were not effer:ted regularly. However SWPL and BSL were enjoying very cordial relations vrith each other and tried to accommodate each other inspite of problems faced by both of these groups. In order to compensate the loss due to interest which SltrPL suffered as substantial anount was blocked with BSL and group companies. It was decided to compensate this loss to some extent by pal,rnent of interest to SWPL by BSL which was agreed and accepted by both of tJrem that a sum of Rs.22,44,21,161- was accepted as interest payable to SWPL by BSL and thus including this interest amount a surn of Rs.31.00 1acs (Rs.Thirty one lacs only) is accepted was net payable arnount to SWPL by BSL." k) The Memorandum of Understanding is to be taken as a whole to underrstand the intention of the parties but cannot be read in bits a-rrd pieces. Thus, it is clear that though only plaintiff No.1 and defendalt No.1 have sigrred the document, it covers the interest of plaintiff No.2 also and that defendant Nos.2 and 3 are also liable along with defendant No.1 Therefore, it is held that the plaintiffs are entitled to claim Rs.8,55,784/- rvith intere st @ l2o/o per annum on the said sum from 3 1"t Marr:h, 1 996 to the date of realization from the defendants and that defendant Nos.l to 3 are jointly and severally liable to pay the same. Point No.l is answered accordingly. t 10 AKS,J & ETDJ CCCA No.167 of 2007 L2. POTNT NO.2: In the light of the finding arrived under point No.1, it is held that the trial Court's judgment and decree needs interference only to the extent of the interest that is awarded.

13. POINT NO.3: In the result, the appeal is partly allowed modifying the trial Court award to the extent of interest to be payable to the respondents herein. The appellant Nos. 1 to 3 are directed to pay respondent Nos.I and 2 an amount of Rs.8,55,7841- witll interest @12%o per arlnum on the said amount from 31"t March, 1996 to the date of reaJization There shall be no order as to costs. Miscellaneous Applications, if any, pending in this appeal shall stand closed. Sd/- K. SRINIVASA RAO JOINT REGIS RAR \ To, //TRUE COPY// SECTION OFFICER '1 . The lll Senior Civil Judge, City Civil Court, Secunderabad (with records, if any)

2. One CC to Sri Ii/|. Papa Reddy, Advocate [OPUC] 3. One CC to Sri P. Venugopal, Advocate [OPUC] 4. Two CD Copies o kam/DL HIGH COURT DATED:31 10112025 - ---^aallLG!ir-}- f t - JUDGMENT+DECREE CCCA.No.167 of 2007 ( -)c o .SIA, t HE 1 2 2 ttB 2C25 ,._ ll 4"' * t)F ::,9) THE APPEAL IS PARTLY ALL,OWED ,rl {-