Calcutta High Court
United Bank Of India vs Rashyan Udyog And Others, Etc. on 12 April, 1989
Equivalent citations: AIR1990CAL146, [1992]73COMPCAS482(CAL), 93CWN1130, AIR 1990 CALCUTTA 146
ORDER A.M. Bhattacharjee, J.
1. The only question involved in these two appeals at the instance of the decree-holder Bank is whether the trial Court was wrong in not granting the pendente lite and also post-decree interest, while decreeing the two suits giving rise to these two appeals, warranting our intervention.
2. The trial Judge, while decreeing these two suits, said nothing about the pendente lite as well as post-decree interest and must therefore be held to have refused such interest and, as has been made clear in the Memorandum of Appeal in both the appeals, the appeals are directed "against the portion of the judgment and Decree refusing pendente lite interest and interest on the decretal amount till realisation."
3. Exaction of interest on loan, more often than not, operates harshly on the debtors. Our ancient Hindu Law condemned such practice. Vasista said (Vasista-Sanhita, Chapter II, Verses 36042) that "if destruction of foetus and exaction of interest were weighed in balance, the destroyer of foetus would go upon the scale and Usurer would fall down", and commenting on this, Dr. P. N. Sen in his Tagore Law Lecturers on Hindu Jurisprudence (1918, page 300) said that this figuratively expresses the Sage's opinion that extortion of interest which sucks the life-blood, so to say, of living men is even more reprehensible than the destruction of foetus which has not yet seen light of the day". But notwithstanding such strong denouncement, Vasista could not declare it to be illegal but. branded the Usurer as a "sinner who is lost to. all virtuous acts". Narada also prohibited such practice for the Brahmins and Khatriyas, but conceded it for the Vaisyas, the commercial while characterising such acquisition as "partly black (impure)". "The world", said Swami Vivekananda, "is in the third epoch under the domination of the Vaishyas (the merchant, the third estate)" and would continue to be so until the advent of "the fourth epoch" which "will be under the domination of the Shudras (the proletariat)".
4. The classical Islamic Law also, not the Indian brand thereof, condemned exaction of interest on loan and, as would appear from Sir Abdur Rahim's Tagore Law Lectures on Muhammadan Jurisprudence (1911 page 397), "those Muhammadans who strictly follow the rules of law regarding Riba do not feel themselves justified in taking interest on money advanced". We are fully alive to the fact that we do not, as we cannot, administer either the classical Hindu Law or the classical Muslim Law; but we have referred to all these only to show that, even though conceded as a necessary evil in commercial practice, our Juristic heritage condemned the practice of exacting interest as something reprehensible and not commendable.
5. Pendente lite as well as post-decree interests are in the nature of compensation or damages which the Court may award to the plaintiff for being kept out of the money due to him. Whether we look to the general provisions of S. 34 of the Code of Civil Procedure, or to those of R. 11 of 0. 34 specially applicable to mortgage-suits, the relevant provisions are patently governed and controlled by the expression "may" and these provisions therefore, should lead us to conclude that award of such interest is not obligatory, but only discretionary and the Court may or may not award such interest.
6. There is the high authority of the Federal Court in Jaigobind Singh v. Lachmi Narain for such a view, where the Federal Court was considering the provisions of the Bihar Money-Lenders (Regulation of Transaction) Act, 1939, S. 8 whereof enabled the Courts to exercise several powers to grant reliefs to the borrowers and used the expression "the Court may exercise all or any of the following powers" enumerated thereunder. The Federal Court ruled (supra, at 22) that "obviously by the use of the word 'may'", it was intended to vest the Court with a discretion and that "had the intention been" otherwise, "the language would have been 'the Court shall' exercise all or any of the powers". The Federal Court proceeded to observe that "the use of the word "may" indicates that the Court is not bound to exercise at least one of the powers, and may well not exercise any of the powers at all" and that "the language as it stands can mean only this that the Court has a discretion to exercise all or any or none of the specified powers". If in respect of a provision like S. 8 of the Bihar Money-Lenders Act, whereunder reliefs were awardable to the debtors, the Federal Court ruled that because of the word 'may', the Court had the discretion to_award or not to award all or any of the reliefs, we do not find any reasons as to why the same conclusion would not follow in respect of S. 34 or O. 34, R. 11 of the Code of Civil Procedure, whereunder it is provided that the Court 'may' award interest, and why, according to the ratio of the Federal Court decision in Jaigobind Singh (supra), this should not mean that the Court may not award interest at all.
7. It is true that there are a number of Division Bench decisions of this Court in Nilmoni Sardar v. Baidyanath Das, , in West Bengal Financial Corpn. v. Bertram Scott, , in United Bank of India v. New Glencoe Tea Co., , in State Bank of India v. B. Gupta, and in Life Insurance Corporation of India v. Kumar Purnendu Nath, , holding that the expression "may" in S. 34 as well as O. 34, R. 11 of the Civil P.C. does not vest the Court with any discretion at all to grant or not to grant interest and the grant of interest, notwithstanding the expression "may", is a must, while only the rate or the amount of interest to be awarded is left to the discretion of the Court.
8. This catena of Division Bench decisions would have been otherwise binding on us; but we have our doubts as to whether, in view of the decision of the Supreme Court in Soli Pestonji v. Ganga Dhar, and also the earlier decision of the Supreme Court in Mahabir Prasad v. Durga Datta, and also a later decision of the Supreme Court in Slate of Madhya Pradesh v. Nathabhai Desaibhai, , which could not be noticed in the first-mentioned Calcutta decision and were not also noticed in the other four decisions, the aforesaid Division Bench decisions can still bind us to hold that award of interest is a must. The Supreme Court in Soli Pestoni (supra, at p. 604), while endorsing the Federal Court decision in Jaigobind Singh (supra), has clearly held that because of the user of the expression "may" in O. 34, R. 11. "the language of the Rule gives a certain amount of discretion to the Court so far as pendente lite and subsequent interest are concerned". Be it noted, discretion so far as award_of pendente lite and subsequent interest, and not that discretion only so far as the rate or amount of such interest. The decision in Mahabir Prasad v. Durga Datta, (supra, at p. 939), also appears to be a clear and unequivocal authority for the view that "as regards interest pendente lite until the date of realisation, such interest" (and not merely the rate or amount thereof) "was within the discretion of the Court" and the later decision in Nathabhai Desaibhai (supra) is also to the same effect, namely, "whether, interest should be awarded on the principal amount claimed from the date of the suit, was within the discretion of the Court". The award of interest itself is what has been left to the discretion of the Court, and not merely the rate or the amount thereof.
9. We do not, as we need not, go to that length as to hold in this case that the Division Bench decisions of this Court, noted hereinbefore, have been wrongly decided in view of the Supreme Court decisions in Mahabir Prasad (supra, ) and in Soli Pestonji (supra, ) and in Nathabhai Desaibhai (supra, ). For our present purpose, it would be sufficient to note that the view that the award of pendente lite or post-decree interest is merely discretionary and never obligatory is also, to say the least, a reasonable view, even if not the only view that would bind us. And that would be good enough for our present purpose.
10. We have recently pointed out in State Bank of India v. Amal Kumar Sen, (1988) 1 Cal LJ 83 : (1988 Lab IC 1585) and then also in Sudhangshu Mohan Chakraborty v. Life Insurance Corporation of India, (1988) 92 Cal WN 1092, that a forensic combat between the Creditor and the Debtor under the adversary system of trial prevailing in our Courts is very often an unequal combat, notwithstanding all our constitutional pledge to secure Social Justice and our constitutional mandate to ensure Equality. We have pointed out further that Judiciary is also "State" within the meaning of Art. 12 and Art. 36 of the Consti-tution and has all the obligation to promote-"Equal Justice" (Art. 39A) and to "strive to minimise inequalities in income and to endeavour to eliminate inequalities in status facilities and opportunities" and to protect "as effectively as it may a Social Order in which Justice, Social and Economic, shall inform all the institutions of the national life" (Art. 38). And since in the present Indian context, Socio-Economic Justice would obviously mean justice to the weaker and the poorer, we must evolve a new juristic principle, a new jurisprudence, so to say, so that our constitutional resolve to secure and our constitutional mandate to promote Socio-Economic Justice are fruitfully carried out by moulding our laws, both legislative and judicial, whenever necessary and wherever possible.
11. The principles enshrined in Art. 38 and Art. 39A, like all the other Directive Principles in Part IV of our Constitution, are, as declared in Art. 37 itself, "fundamental in the governance of the country" and the judiciary also, as pointed out by Mathew, J. in Kesavananda Bharati, , having been assigned the role to ensure governance of the country according to the Constitution and the Laws, these principles as enshrined in Art. 38 and Art. 39A must also be taken to be fundamental in the administration of justice and the judiciary must evolve a new rule of law, a new forensic approach, to govern our adjudicatory process to ensure administration and advancement of Social Justice which, as already noted, in the present Indian context, would mean Justice to the weaker, the poorer, the oppressed. And if under our paramount taw, securing' of justice to the weaker and the poorer has now become a Fundamental obligation of the Judiciary also since the inauguration of that Supreme. Charter, then our Judiciary must also now rise up to the challenge and suitably alter or restructure our adjudicatory process, principles and practice prevailing heretofor, to enable it to promote and administer justice to the weaker or the poorer, pitted in forensic combat against the stronger or the richer.
12. As an inevitable corollary to this, it must also then be accepted that if in a given case a Court has in fact promoted and secured Socio-Economic Justice by exercising its discretion in favour of the weaker or the poorer, but may not have done so in strict accordance with the established rules of practice and procedure whereunder such discretion was required to be exercised by articulating reasons therefor, such forensic practice and procedure may no longer stand in the way in view of Socio-Economic Justice having in fact seen administered and may pale into comparative insignificance in view of our fundamental obligation under our Fundamental Law to which all our other laws and rules of procedure and practice must give precedence. We have also noted that in a recent judgment of the Supreme Court in Pomal v. Vrajlal, , a two-Judge Bench of the Supreme Court, speaking through Sabya-sachi Mukharji, J., (at p. 444) has, in a mortgage suit, held that "the law must transform itself to the social awareness" about the poor and "poverty should not be unduly permitted to curtail one's right to borrow money on the ground of justice, equity and good conscience on just terms" and it must see that there "is no taking advantage of the oppressed or depressed people."
13. Be that as it may, here in this case, the trial Court, while decreeing the suits of the creditor, has not awarded any pendente lite or post-decree interest. It had the discretion to award or not to award and has exercised the same in favour of the debtor. The generally accepted principle is, as pointed out by the Privy Council in Rehamatunnissa Begum v. Prince AIR 1917 PC 116 at P. 118 that "it is opposed to sound practice for an appellate Court to substitute its discretion.for that of the Court from which an appeal has been preferred". The Federal Court in Jaigobind Singh (supra also relied on this decision and observed that "if there can be no legal objection to the way in which discretion has or has not been exer-cised", it is not be interfered with an appeal. But the Federal Court while ruling such noninterference, ruled further that such interference may be justified when the Court below "did not apply its mind at all on the question". As in the case at hand also, the Court does not appear to have adverted to the question of granting or not granting pendenfe lite or post-decree interest, it has been urged that such interference is called for. But notwithstanding this argument, we still decide not to interfere. Here are our reasons.
14. The two suits giving rise to these two appeals arise out of loans advanced by the plaintiff-appellant to one Dr. Saroj Chatter-jee, now deceased, by way of financial accommodation. The respondent Mira alias Mina is the widow and the respondent Rakhi alias Anuradha is the daughter of the debtor and the widow mortgaged by way of deposit of title deeds her Stridhan property, being a residential house, as guarantor. The respon-dents have never demonstrated any attitude to disown the loans or the, liabilities thereunder and have not even contested the suits on any ground and allowed the suits to be decreed ex parte. The Bank filed the appeals, but have taken no steps for early hearing and have not even cared to file paper-books during all these ten years. In the application filed in this Court supported by Affidavit, the respondents widow and the daughter have stated that notwithstanding their unfavourable financial condition, they "made repeated appeals to the Bank for payment of decretal dues and offered to pay interest at concessional rate", but "the Bank turned down all such appeals" and that the respondents are "without any financial resources to satisfy the demands/claims of the Bank other than selling off the said residential house." The affidavit further shows (para 15) that the respondents have already deposited a sum of Rs. 6,05,000/- with the Special Officer appointed by this Court "to cover the decretal dues of the United Bank of India in the two suits and another suit filed by the State Bank of India". The appellant Bank has not controverted any of these statements either by any counter-affidavit or otherwise during argument before us and nothing, therefore, should prevent us from taking note of these averments. We do not know whether these facts were brought to the notice of the trial Judge. But we have no doubt that if those were before him and the learned Judge declined interest after adverting to these facts, the order could not be assailed on the ground that the discretion was not judicially exercised or there was no application of mind by the trial Judge in the exercise of his discretion. These facts now brought before us can .very well sustain a discretionary order declining award of pendente lite or post-decree interest. And in our view, now that these facts are before us, it would be an idle formality to send the matter back to the trial Court only to have these matters brought on record before the trial Court and to direct it to decide the question of interest with formal articulation. u/s. 107 of the Civil P.C., we, sitting in First Appeal, can exercise all the powers which the trial Court could and since we are in agreement with the trial Court's not awarding interest, we do not like that the matter, already dragging for about 15 years, should be dragged any more only to have a formally reasoned order from the trial Court. The tendency of our Court, as ruled by the Supreme Court in Pratap Singh v. Shri Krishna Gupta, , must be to deprecate technicalities and to allow the substance to take precedence over formalities. If in substance we are now satisfied that the grant of discretionary interest could be declined on the facts now before us, we would be putting too much premium on mere technicalities in waiting, may be for years, for another order from the trial Court after remand.
15. This is sufficient to dispose of the appeals. But we still reiterate what we have stated hereinabefore, namely, in the changed context resulting from our constitutional obligation to secure, protect and promote Social and Economic Justice, if we find that as a matter of fact such Socio-Economic Justice has in fact been done to a debtor, all our Judge made rules of practice and procedure to the effect that a Judge must expressly manifest his advertence to the question and application of mind thereto by a reasoned order, should not stand in the way of our upholding the impugned order.
16. We would accordingly dismiss both the appeals, but would do so without costs.
Pabitra Kumar Banerjee, J.
17. I agree.
18. Appeals dismissed.