Sri v. Ravi Kiran Rao, SeniorCounsel rep. Sri vs Rohith

Mehar Filling Station, National Highway No. ,+4 (Old NH 7) Road, Adloor, Yellareddy Village, Sadasivanagar Mandal, Nizamabad District, Rep. by its Sole Proprietor Smt. Chamakura Savitha Wo G.Rajashekar Reddy, R/o H.No. 6-1-334/8, Padmarao Nagar, Secunderabad- 25. ...RESPONDENT/RESPONDENT/PLAINTIFF lA NO: 2 OF 2024 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 to grant interim stay of all further proceedings pursuant to the Judgment and decree passed by the Senior Civil Judge, Kamareddy dated 30-7-2019 in OS No. 56 of 2014 including execution of the above said decree pending disposal of the above Second Appeal. Counsel for the Appellant: Sri V. Ravi Kiran Rao, SeniorCounsel rep. Sri V. Rohith Counsel for the Respondent: CheUuru Sreenivas The Court delivered the following JUDGMENT: HON'BLE SR!JUSTICE N. TUKARAMJI Second Aopea I No.500 o12024 JUDGMENT: Heard Mr. V.Ravi Kiran Rao, learned Senior Counsel, argued on behalf of Mr. V.Rohith, leamed counsel on record for the appellanUdefendant and Mr. Chefluru Sreenivas, learned counsel for the respondenVplaintiff. 2. This appeal has been filed by the appellanUdefendant aggrieved by the decree and judgment dated 30.09.2024 in Appeal Suit No.17 of 2019 passed by the principal District and Sessions Judge, Kamareddy confirming the decree and judgment dated 30.07.2019 in O.S.No.56 ol 2014 on the file of the Senior Civil Judge, Kamareddy. 3. The respondenUplaintffi filed suit seeking recovery of Rs.8,00,000/- with future interest at 24o/o per annum and costs. The trial Court decreed the suit with costs and directed the appellanUdefendant to pay the suit claim along with interest @ 240/o pet annum from the date of the suit to the date of decree and @ 6% per annum from the date of decree, till realization. 4. Learned counsel for the appellanUdefendant though pointed out factual aspects for considering, precipitated pleading o NTR,J sA_500 2024 as to the interest awarded by the Courts below, at Z4olo per annum. He contends that even as per the suit claim the transaction was a hand loan but not a commercial transaction, as such, granting interest at 24o/o is usurious and cannot be maintained. Further contested that Section 34 of the Code of Civil Procedure, 1908 (for short, 'CPC') prescribes that the Court may grant reasonable interest on principal sum from the date of the suit till the date of decree and thereafter not exceeding 60lo per annum in decree for money. Thus in the absence of specific contractual interest the Courts below ought to have granted interest as per the contemplation under Section 34 of the CPC. 5. Learned counsel cited Ra.1hi Kumar y. Suresh Kumar Malhotra and another - (2003) 5 SCC 375 and pleaded that in the authorig, the Hon'ble Supreme Court, by considering the aspecl that the liabili$ to pay the amount had not arisen out of any commercial transaction, rate of interest payable on the amount has been reduced from 18o/o to 6% per annum. 6. Learned counsel for the respondenUplaintiff would submit that though the transaction was hand loan under promissory note, as the repayment was neglected and on demand for repayment the defendant issued disputed cheque and taken back the a 3 NTR,J sA 500_2024 promissory note. However on presentment, as the cheque was retumed unpaid as account closed, the suit has been filed, after the legal notice was returned unserved as 'refused,. Thus the suit would be for recovery of amount based on cheque, which is negotiable instrument. Though the interest awarded in the decree is reasonable, at any stretch it cannot be below than the prescribed interest under Sections 78 to 80 of the Negotiable lnstruments Act, 1881 (for short, 'Nl Acf) and the interest rate contemplated in Section 34 of the CpC would not be relevant. 7. Learned counsel placed reliance on T-Ramachandra Reddy @ Ramachandrappa S/o Sannathippaiah v. Murthy Gowder S/o Gowdra Veeranna - 2010 LawSuit(Kar) 12O and pleaded that similar issue has been considered by the High Court of Karnataka and by relying on Section 80 of the NI Act rate of interest was fixed at 18o/o per annum. 8. ln the rival contentions, the point arises for determination is: "Whether the rate of interest granted on the principal sum between the date of the suit and the date of decree is usuious? L By the plaint pteadings, it is clear that the plaintiff sought for recovery of amount centering on the cheque, which is negotiable 4 NTR,J sA_500 2024 instrument. As per the plaintiff the defendant has taken hand loan of Rs.8,00,000/-. Though the plaintiff pleaded that the defendant had executed promissory note and that instrument was returned while receiving the suit cheque/Ex.A-1, there is no specific pleading as to any agreed rate of interest with the defendant. Further the suit claim itself is evidencing that the transaction was a hand loan. ln general, Section 34 of the CPC is relevant provision dealing with granting of interest on a decree for payment of money. Nonetheless as noted supra, the suit claim is formed on the cheque/Ex.A-'l which is a negotiable instrument.

10. The decision cited by the appellanUdefendant i.e. Rajni Kumar (supra) was in a situation where the suit filed by the landlord against the tenant for recovery of electricity and water consumption charges, wherein it has been held that in non commercial transaction, Section 34 of CPC is applicable. Whereas in T.Ramachandra Reddy (supra), a circumstance where the recovery of suit amount based on promissory note, a negotiable instrument has been considered.

11. ln regard to grating of interest where no interest rate is specified in the negotiable instrument, the relevant Section 80 of the Nl Act reads as follows: 5 NTR,J sA_500_2024 "80. lnterest when no rate specified.- When no rate of interest is specified in the instrument, interest on the amount due thereon shall, notwithstanding any agreement relating to interest between any parties to the instrument be calculated at the rate of eio hteen per centum per annum. from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon. or until such date after the institution of a suit to recover such amount as the Court directs. Explanation._ When the party charged is the indorser of an instrument dishonoured by non-payment, he is liable to pay interest only from the time that he receives notice ofthe dishonour." Thus in the absence of agreeinent between the parties to the interest specified in the instrument, the interest has to be calculated at 18o/o per annum. 12. For the aforesaid reasons, in the factual sefting of the present suit, this Court is of considered view that the related provision in determining the interest would be Section g0 of the Nl Act. Therefore as the Courts below disregarded this aspect, the rate of interest granted in the impugned decree requires interference. tn consequence, the rate of interest granted by the trial and appellate Courts from the date of the suit till the date of decree has to be modified al 1go/o per annum. Accordingly, the rate of interest granted in the impugned decree stands revised. I I I t. 6 NTR,J sA_500_2024 13- ln the result, the second appeal is allowed in part. There shall be no order as to costs. As a sequel, pending miscellaneous petitions if any, stands closed //TRUE COPY/' A.V.S.S.C.S.M. SARMA T REGISTRAR TION OFFICER To,

1. 2. 3. 4. 5. VH/gh The Principal District Judge at Kamareddy(with records, if any) The Senior Civil Judge at Kamareddy. One CC to Sri V. Rohith, Advocate [OPUC] One CC to Sri Chetluru Sreenivas, Advocate [OPUC] Two CD Copies @e t I gE S 1 /r, ,6 c *o A id 2s rtg zffi ? ?, r) * l:ir'.., HIGH COURT DATED: 071011202s JUDGMENT+DECREE SA.No.S0O of 2024 ALLOWNG THE APPEAL IN PART WITHOUT COSTS ,X^ \w I i IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE N.TUKARAMJI SECOND APPEAL NO:50 00F 2024 Between: 3i,?ig1H'i.3lf ,?jo"r"f^1"1n1'*?1ly#;r.rr:ill{??"'occBusiness,R/o ...APPELLANT/APPELLANT/DEFENDANT AND Mehar Fillino Station, National Higlyay. No .44 (Old NH 7) Road, Adtoor, Yellareddy Village, Sadasivanagar-Manial,- Ni ;'tii:?tsj7;:B1.i':[ffi##.€t.1;yffi B?f,3n:l#f.?d,:'-',t Appearundersection'oor"i;S=,!:fl L1ill'*:;i.?l-,',:Ti:..t#Xl[I 30-08-2024 in AS No. 17 ot 2019 on the fiie of the courr" of tt. Fri*iprJbirtii"t ll9g".,t^[rlareddy' preferred against the Judgment and decree dated 30-07- 2019 in os No. s6 ot2014 on the fire of the cJurt of the senioi cirii lrJg".t Kamareddy. This appeal coming_on for hearing and upon perusing the grounds of appeal, the Judgment and Decree of the court berow and the irateriai p+uo in lhe gase and upon hearing the arguments of sri V. Ravi Kiran n"", .ip-iriv. Rohith, Advocate for the appeflantLnd sri chetururu sreenivas, nJrd."tE r-in. Respondent. This Court doth Order and Decree as follows: 1 Ilat tl'e Second Appeal be and the same is hereby is allowed in part; 2. That the rate of interest granted by the triar appeflate courts from the date of 3. That there shall be no order as to costs in this appeal the suit till the date of decree is modifred to iBbZ per annum; A.V.S.S.C.S.M. SARMA INT REGISTRAR CTION OFFICER //TRUE COPYII To,

1. The Principal District Judqe at Kamareddv 2. The Se_nior Civit Judge aiKamareddy. 3. Two CD Copies @a HIGH COURT DATED: 07t01t2025 I I DECREE SA.No.S00 ot 2024 ALLOWNG THE APPEAL IN PART WITHOUT COSTS \