Karnataka High Court
Noor Mohamed vs Mohamed Karmulla And Another on 4 January, 1999
Equivalent citations: 1999(2)KARLJ654
ORDER
1. The defendant challenges in this first appeal the decree for payment of damages of Rs. 15,000/- to him the plaintiff for construction of the suit shop, though the suit for possession was dismissed. The plaintiff having not filed cross-objections, the decree has become final and this appeal itself is confined only to awarding of interest at 18% per annum. It is made clear by the order of this Court dated 27-9-1989. Therefore, the question is whether the plaintiff is entitled to interest at 18% per annum for the amount given by him for the construction of the shop.
2. Plaintiff 1 is the son of plaintiff 2 and they wanted to do some business, and hence they were in need of a shop. Defendant was about to purchase a premises at Kalasipalyam and he wanted to construct shop therein. So on 28-3-1980, plaintiff 1 and defendant entered into an agreement of lease. In that agreement, the defendant agreed to lease the suit shop to be constructed to the plaintiff within two months and for that purpose a sum of Rs. 15,000/- was paid. But after the construction, when the defendant did not lease out the shop, the suit came to be filed for possession as well as for recovery of damages of Rs. 300/- per mensem till the date of delivery of possession.
3. The Trial Court, however, found that the plaintiff is not entitled to possession, but entitled to refund of only Rs. 15,000/-. As the defendant had the benefit of money from 28-3-1980, without the plaintiff deriving any advantage thereof, the Trial Court has chosen to grant interest at 18% per annum.
4. Now the question is whether the grant of 18% per annum is fair and reasonable?
5. The grant of interest is governed both by the Principle of Interest Act as well as Section 34 of the CPC. So far as Interest Act is concerned, after the amendment, it is the market rate of interest and 18%, in my opinion, is reasonable interest which the defendant is bound to pay till the date of the suit. Subsequent to the date of suit, the question to be considered is whether it is for a commercial transaction or not. Now putting up a shop is for a business and it has got to be construed as a commercial transaction and not otherwise. Admittedly, having put up the building at the cost of the plaintiff, it is quite unfair on the part of the defendant to deprive him possession. However, that has become final. Therefore, we are concerned only with the reasonableness of grant of interest. I am satisfied that grant of interest at 18% is fair and reasonable and warranted on the facts of this case.
6. Therefore, holding that there is no merit in the appeal, the same is dismissed with costs.