APPELLANTS-PLAINTIFFS 1 TO 6 v ANGAMALY MUNICIPALITY

## `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ## `THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN` ## `TUESDAY, THE 30[TH] DAY OF JULY 2024 / 8TH SRAVANA, 1946` ## `AS NO. 150 OF 2002` ``` AGAINST THE DECREE AND JUDGMENTS IN DATED 30.06.2001 IN OS NO.44 OF 1998 OF ADDITIONAL SUB COURT,NORTH PARAVUR ``` ## `APPELLANTS-PLAINTIFFS 1 TO 6:` - `1 E.V. VARGHESE (DIED) S/O.VARKEY EDASSERRY HOUSE, ANGAMALY KARA, DO. VILLAGE,, ALUVA TALUK.` - `2 GRACE LAZER W/O. GEORGE HOUSE WIFE, CHALAKKAL HOUSE,, PULIKKANAL ROAD, KOTTAYAM.` - `3 PAUL VARGHESE S/O. VARGHESE EDACHERRY HOUSE, ANGAMALY NOW WORKING AT U.S.A.` - `4 JAMES VARGHESE S/O. VARGHESE GOSPAL WORK, EDACHERRY HOUSE, ANGAMALY VILLAGE, DO. KARA, ANGAMALY.` - `5 JESSY GEORGE W/O. C.I. GEORGE HOSE WIFE, CHEMVATHUR HOUSE, PANGAMUKKU VILLAGE, PENGAMUKKU KARA, TRICHUR TALUK.` - `6 GEORGE VARGHESE S/O. VARGHESE BUSINESSMEN, EDACHERIL HOUSE, ANGAMALY, APPELLANTS 2 TO 5 ARE REPRESENTED BY THE POWER OF ATTORNEY HOLDER THE FIRST APPELLANT:` ``` APPELLANTS 2 TO 6 ARE RECORDED AS THE LEGAL HEIRS OF THE DECEASED FIRST APPELLANT VIDE ORDER DATED 4/7/23 IN IA 107/17. ``` ``` BY ADV K.K.JOHN ``` ## `RESPONDENT-DEFENDANT:` ``` ANGAMALY MUNICIPALITY ANGAMALY VILLAGE, ALUVA TALUK, REPRESENTED BY THE SECRETARY, ANGAMALY MUNICIPALITY. ``` ``` BY ADV. SRI. WILSON URMESE, STANDING COUNSEL ``` ``` THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 11.06.2024, THE COURT ON 30.07.2024 DELIVERED THE FOLLOWING: ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ## `J U D G M E N T` ``` Dated this the 30[th] day of July, 2024 ``` ``` This appeal arises from the judgment of the Additional Sub Court, North Paravur dated 30.06.2001 in the suit, O.S.No. 44/1998. ``` ``` 2.The relevant facts of the case is as follows: The property having an extent of 76.060 cents was agreed to be sold by the plaintiff/appellant to the Angamaly Municipality, represented by the then Municipal Commissioner, as per Ext.A5 agreement dated 29.06.1990. Ext.A5 specifically provides in page no.4 that, if the sale consideration is not paid within the period stipulated, the seller will be entitled to get interest on the sale consideration remaining outstanding, until the sale deed is executed, at the rate of Rs.115/- per year. There were several imponderables for ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ``` execution of the sale deed. Ultimately, the sale deed was executed vide Ext.A18 on 15.12.1985, wherein also the entitlement of the seller to receive interest from the purchaser is recited in page no.4. On such premise, the suit was filed seeking money by way of interest as stipulated in the agreement and the sale deed. ``` ``` 3. In this regard, it is worthwhile to refer to the defense contentions as well. The major contention raised by the defendant Municipality is that the suit filed after 8 years of execution of Ext.A5 agreement dated 29.06.1990 is barred by limitation. The plaintiff had already obtained the sale consideration and assigned the property in favour of the defendant. The defendant repeatedly contented that they were always ready to perform their part of the contract and that the covenant in the contract regarding payment of interest for balance sale consideration, is not binding on the ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ``` defendant, since the delay in execution of the sale deed was due to the indifferent attitude of the 1[st]plaintiff and his wife. Since the plaintiffs had received the balance sale consideration, they are not entitled to any interest and hence the suit is not maintainable in law. The defendant is not liable to pay interest, since the said covenant was incorporated into the agreement without the knowledge and consent of the defendant Municipality. On the aforementioned grounds the defendant Municipality sought for dismissal of the suit. ``` ``` 4.Exhibits A1 to A20 and Exhibits B1 to B12 were marked on behalf of the plaintiffs and defendant respectively. No oral evidence was adduced by both the parties. ``` ``` 5.On an analysis of the facts, evidence and probabilities of the case, the learned Sub Judge ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ``` found the plaintiffs’ entitlement to receive interest, but chose to dismiss the suit, holding that the suit for interest alone is not maintainable in view of Section 3 of the Interest Act, 1978 and also on the strength ofMunicipal Committee, Akotv.Surajmal Shriram Ginning and Pressing Factory now styled as Brijmohan Jamnalal Ginning and Pressing Factory, Akola[AIR 1938 Nagpur 119]. ``` ``` 6.Heard Sri.K.K. John, learned counsel for the appellants and Sri.Wilson Urmese, learned Standing Counsel for Angamaly Municipality. ``` `7. The following points arise for consideration in this appeal:` ``` i) Whether the impugned decree and judgment is contrary to law or not? ``` ``` ii) Whether Trial Court was right in finding that the suit is barred under Section 3 of the Interest ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ``` Act, since it is one for interest alone? ``` ``` 8. Learned counsel for the appellants would argue that proviso to Section 3 of the Interest Act will govern the fact situation, since there is a specific contract by and between the parties for payment of interest, as evidenced from Ext.A5 agreement, as also, Ext.A18 sale deed. The fact situation is governed by Sub Section (3)(a)(i) of Section 3 of the Interest Act. There cannot be any doubt that interest is payable to the plaintiffs/appellants as of right by virtue of Ext.A5 agreement, reinforced in Ext.A18 sale deed in respect of the outstanding sale consideration, is the contention espoused by the learned counsel. Thus, according to the learned counsel for the plaintiffs/appellants, the provision of law relied upon by the trial court is misconceived, warranting interference from this Court. Reliance placed upon the decision of the Nagpur High Court ``` ``` A.S.No. 150 of 2002 ``` ``` ..7.. ``` ``` inMunicipal Committee, Akot(supra) is misconceived, is the further submission made by the learned counsel for the appellants. ``` ``` 9.The learned counsel for the respondent Municipality would first contend that the suit cannot be construed as one based on Ext.A5 agreement. Instead, it is only based on the recital contained in Ext.A18 sale deed. In fact, the bar of limitation is saved by the judgment of trial court only on that premise, as could be seen from the findings in paragraph no. 7 of the judgment. The date of Ext.A18 sale deed is 18.03.1995. Reckoning from that date, the suit was found to be filed within time, the date of filing being 11.02.1998. Based on this premise, learned counsel invited the attention of this Court to the recitals contained in Ext.A18 to contend that the entire sale consideration, inclusive of the interest, has been paid by the respondent ``` ``` A.S.No. 150 of 2002 ``` **==> picture [37 x 9] intentionally omitted <==** ``` Municipality. Therefore, a separate suit for interest alone will not lie as found by the trial judge, is the contention urged. Learned counsel would emphasise that, upon receipt of interest, there is no occasion for registration of any separate document and the reference to a separate document in the recitals in Ext.A18 only signifies Ext.A18. Inasmuch as the entire rights of the appellants/plaintiffs has been conveyed by Ext.A18 - after receipt of the entire sale consideration – as recited in Ext.A18, there cannot be a separate claim maintainable for the interest component alone. Coming to the Section 3(3) of the Interest Act, learned counsel would submit that the said provision can be pressed into service, only if the original agreement Ext.A5 is reckoned. The same is impossible in the instant case, since the suit is based on Ext.A18 which does not contain any specific provision for payment of interest, in the light of the interpretation canvased by the ``` ``` A.S.No. 150 of 2002 ``` ``` ..9.. ``` ``` learned counsel for the appellants. ``` ``` 10.Having heard the learned counsel appearing on both sides, this Court finds little merit in the submission made by the learned counsel for the respondent Municipality. ``` ``` 11.The short issue involved in this appeal is based on the interpretation of Section 3 of the Interest Act, 1978. First of all, the interpretation sought to be given by the respondent’s counsel to the recitals contained in Ext.A18 cannot be accepted. The relevant recitals in Ext.A18, as contained in page no. 4 are extracted here below:- ``` ## **"ടി കരാർ വ്യവസ്ഥപ്രകാരം അഡ്വാൻസ് കഴിച്ചു** **തീർത്ത സംഖ്യക്കു കരാർ വ്യവസ്ഥ തീയതി മുതൽ തീറെഴുതി പിടിക്കുന്നത് വരെ കരാർ വ്യവസ്ഥ അനുസരിച്ചുള്ള പലിശ തരുവാൻ നഗരസഭക്ക ബാധ്യത ഉള്ളതുമാണ്. ടി** ``` A.S.No. 150 of 2002 ``` ``` ..10.. ``` **വ്യവസ്ഥപ്രകാരമുള്ള പലിശ സംഖ്യ പറ്റി വേറെ ആധാരം രജിസ്റ്റർ ചെയ്തു തരുന്നതിന് സമ്മതിച്ചിട്ടുള്ളതിന്റെ അടിസ്ഥാനത്തിൽ മേൽ പ്രകാരം നഗരസഭയുടെ കൈവശത്തിലുള്ള ബസ് സ്‌റ്റാണ്ടായി ഇപ്പോൾ ഉപയയോഗിച്ച വരുന്ന ടി 76.060 സെ ന്റ സ്ഥലത്തിന്റെ പൂർണ ഉടമസ്ഥരായി ഞങ്ങൾക്കുള്ള സകലവിധ അവകാശങ്ങൾക്കും കെട്ടിടത്തിനും കൂടി ടി കരാർ വ്യവസ്ഥ പ്രകാരം വില കണക്കാക്കിയതിൽ സ്ഥലത്തിന് 5,83,950/അഞ്ചുലക്ഷത്തി എൺപത്തിമൂവായിരത്തി ത തൊള്ളായിരത്തി അമ്പതു രൂപയും ഉൾപ്പടെ ഒട്ടാകെ 6,43,771/രൂപ ആറുലക്ഷത്തി നാല്പത്തിമൂവായിരത്തി എഴുനൂറ്റി എഴുപത്ത്തൊന്ന രൂപ വില നിശ്ചയിച്ചു സമ്മതിച്ചു വിലയർത്ഥം പറ്റിനു വിവരം."** ``` 12.It is clear that from the above recitals that Ext.A18 first refers to Ext.A5 agreement, which provides for payment of interest by the respondent Municipality; and then recognizes the right of the appellants/plaintiffs to receive the amount by way of interest, as also, to execute a separate document evidencing the same. Then, Ext.A18 sale ``` ``` A.S.No. 150 of 2002 ``` **==> picture [45 x 9] intentionally omitted <==** ``` deed is executed on the basis of that understanding to pay interest and execution of a separate document. The impression which one gathers by analyzing the above covenant is only to theeffectthattheentitlementof appellants/plaintiffs to receive the amount by way of interest is reserved in Ext.A18, even when Ext.A18 purports to convey the entire rights of the plaintiffs/appellants to the respondent Municipality. As a matter of fact, the plaintiffs’ right to claim interest could not have been enforced, but for such a reservation specifically earmarked in Ext.A18 sale deed. Therefore, the interpretation sought to be canvased by the learned counsel for the respondent cannot be countenanced. ``` ``` 13.For the same reason, the alleged non applicability of Section 3(3) as espoused by the learned counsel for the respondent is not liable ``` ``` A.S.No. 150 of 2002 ``` **==> picture [45 x 9] intentionally omitted <==** ``` to be accepted. In this regard, this Court is also relying upon Ext.A5 agreement, which specifically provides for payment of interest on the balance sale consideration from the date of expiry of the six months period stipulated in Ext.A5, until the date of execution of the sale deed. This Court specifically notice that the cause of action for the plaintiffs/appellants for claiming interest as stipulated in Ext.A5 arises only upon execution of Ext.A18 sale deed. It is reckoning from that date, the suit was found to be within the period prescribed under the Limitation Act. Therefore, it is not as if Ext.A5 agreement is given a complete go-bye and that it is based on Ext.A18 sale deed, that the suit claim is rested. The foundation of the claim in the suit is Ext.A5 only, which is only reiterated in Ext.A18. If that be so, there isaclearagreementenablingthe plaintiffs/appellants to receive the interest and mandating the respondent Municipality to pay ``` ## `A.S.No. 150 of 2002` **==> picture [45 x 9] intentionally omitted <==** ``` interest. The instant fact is squarely in the teeth of Section 3(3) of the Interest Act, wherefore, the finding of the trial Court based upon the proviso to Section 3 that a suit for recovery of interest alone is not maintainable, once the amount of debt has been paid before the institution of the proceedings, cannot be sustained. ``` ``` In the circumstances, the judgment impugned cannot be sustained and the same is hereby set aside. The suit is decreed as follows: ``` ``` (i) The plaintiffs are entitled to interest at the rate of 15% per annum as provided in Ext.A5 agreement on the sum of Rs.4,97,783/- from 29.12.1992 to 18.03.1995. ``` ``` (ii)The plaintiffs are also entitled to interest at the rate of 9% per annum on the said amount from 11.02.1998 till ``` ``` A.S.No. 150 of 2002 ``` **==> picture [45 x 9] intentionally omitted <==** ``` 30.06.2001. ``` ``` (iii) The plaintiffs are further entitled to interest on the said amount ``` ``` at the rate of 6% per annum from ``` ``` 30.06.2001 till the date of realisation. ``` ``` The Appeal Suit is allowed as above. ``` ``` Sd/- JUDGE ``` ``` C. JAYACHANDRAN ``` ``` SKP ```