Delhi District Court
Ms. Punita Singh vs Sh. Vipin Gera on 17 January, 2020
IN THE COURT OF SH. JOGINDER PRAKASH NAHAR, ADDITIONAL
DISTRICT JUDGE-04, CENTRAL, TIS HAZARI COURTS, DELHI
Suit No. 616289/16
MS. PUNITA SINGH
W/O SH. ARUN KUMAR SINGH
R/O C-82, ANAND NIKETAN
NEAR ANAND NIKETAN CLUB
SOUTH MOTIBAGH, DELHI-21 ...... Plaintiff
VERSUS
1. SH. VIPIN GERA, DIRECTOR
FINLINKERS SOLUTIONS PVT. LTD.
REGISTERED OFFICE: 505-506-507
RATAN JYOTI BUILDING
RAJENDRA PLACE
NEW DELHI-08
2. SH. MANISH GAUTAM, MANAGER
FINLINKERS SOLUTIONS PVT. LTD.
REGISTERED OFFICE: 505-506-507
RATAN JYOTI BUILDING
RAJENDRA PLACE
NEW DELHI-08 ...... Defendants
Date of Institution : 03.03.2016
Date of Judgment reserved on : 17.01.2020
Date of Judgment : 17.01.2020
JUDGMENT
SUIT FOR RECOVERY OF RS.15,00,000/- WITH PENDENTELITE AND FUTURE INTEREST @ 24% P.A BRIEF FACTS AND REASONS FOR DECISION :-
1. The plaintiff has filed present suit for recovery of Rs.15,00,000/- against the defendants. The plaintiff has submitted that she was appointed as Marketing Executive (Mortgages Division) for Delhi and NCR vide appointment letter dated 25.06.2013/Ex.PW1/1 on salary of Rs.9,000/- per month. Vide Ex.PW1/2 the confirmation letter/appraisal letter dated 01.01.2014 the plaintiff was informed by the defendants that her monthly CTC was revised to a sum of Rs.10,000/- w.e.f 01.01.2014 and incentives were allowed @15% of the net revenue earned by the defendant company. On 01.04.2015 vide letter of appointment Ex.PW1/3 the salary of plaintiff was revised to a sum of Rs.15,000/- PM alongwith conveyance and other expenses and the annexures contained mention incentives will be paid @15% of net income to the defendant company/FSPL. The defendant on December 2015 legally terminated the service of the plaintiff vide letter Ex.PW1/5 and illegally detained salary of plaintiff alongwith incentives for the month of October, November and December 2015 totalling Rs.6,47,782/-. Complaint to Labour Officer is made in this regard vide Ex.PW1/6 and vide Ex.PW1/7 Inspecting Officer to Deputy Labour Commissioner had replied. Legal notice was issued to defendants vide Ex.PW1/8 dated 21.01.2016. Complaint to SHO P.S. R.K. Puram is Ex.PW1/9 regarding threat to the son of the plaintiff by the defendants. The claim of incentive sheet is Ex.PW1/11 which also contains the E-mail of the defendant through Vice President, Mortgages Sh. Manish Gautam. The E-mail dated 10.12.2015 at 5.21 pm supports the case of the plaintiff in that the incentive are paid to the employee in full and final settlement alongwith salary. It is mentioned in the E-mail that "your incentives will be paid for the following cases basis of the table below". The further E-mail on same date at 6.03 pm shows that plaintiff is demanding her amount from the defendant and early payment of her dues. The E-mail dated 10.12.2015 at 12.25 pm from plaintiff to defendant mentions the detail of the loan sanctioned for which plaintiff has laid out claim in the suit and this document is Ex.PW1/12. The Ex.PW1/11 and E-mail annexed therewith are seen Communication vide Ex.PW1/12 contains letter from Team Leader of defendants namely Ms. Shilpi Mehra. It is submitted by the plaintiff that defendant did not pay despite service of legal notice dated 21.01.2016 and therefore the present suit is filed for recovery of Rs.15,47,782/- which includes Rs.9 lakhs as compensation on account of mental harassment, physical torture and loss of time. Pendentelite and future interest is also claimed @24% till recovery of due amount.
2. In the written statement filed by the defendants, the defendant has denied any liability towards the plaintiff. It is submitted that plaintiff has not given details of Rs.6,47,782/-. Plaintiff used to came late to office and created indiscipline. The appraisal letter dated 01.01.2014/Ex.PW1/2 is admitted. The plaintiff had resigned which was accepted by the defendant. Thereafter plaintiff rejoined who was reappointed on her request and fresh appointment letter dated 01.04.2015/Ex.PW1/3 was issued to the plaintiff. Plaintiff has not submitted the statement of account for October, November and December 2015 and it is denied that salary alongwith incentive for the said period came to plaintiff for a sum of Rs.6,47,782/-. The plaintiff was paid final amount of Rs.8,500/- which is pleaded by the defendant at para no. B- 4 of the written statement. The plaintiff want to extort money illegally from the defendant. The ledger of the defendant reflecting payment to the plaintiff is Mark DW1/3. The details of attendance sheet and salary calculation is mentioned as Annexure Mark DW1/2. Other allegations of the plaintiff are generally denied by the defendants.
3. Replication is filed by the plaintiff in which plaintiff has reaffirmed the averments made in the plaint and denied the averments of the defendants.
4. From the pleadings of the parties and averments made following issues are framed in the suit on 13.09.2018:-
1. Whether the employment of the plaintiff is in the nature of workman and the suit of the plaintiff is barred by jurisdiction under Industrial Dispute Act? OPD
2. Whether the plaintiff has resigned from the services of the defendant and reappointed by way of fresh appointment vide letter dated 01.04.2015? OPD
3. Whether the plaintiff is entitled for recovery of Rs.6,47,782/- as her salary dues and incentives against the defendant having worked as Marketing Executive with the defendant? OPP
4. Whether the plaintiff is entitled to Rs.9 lakh on account of mental harassment and physical torture? OPP
5. Whether the plaintiff is entitled pendente lite and future interest on the due amount @ 24% p.a.? OPP
6. Relief.
5. Plaintiff Ms. Punita Singh has got examined herself as PW-1 as the sole witness in her case and closed PE vide separate statement of plaintiff dated 16.03.2019. Defendant has got examined the sole witness DW-1 Sh. Manish Gautam as sole witness \in evidence and evidence of the defendants was closed vide separate statement of defendant no. 2 dated 04.12.2019.
6. Parties are heard and record perused. Issue-wise findings as follows:-7. ISSUE NO. 1
1. Whether the employment of the plaintiff is in the nature of workman and the suit of the plaintiff is barred by jurisdiction under Industrial Dispute Act? OPD 7.1 The burden of proof of the present issue is on the defendant. However during course of proceedings by way of application u/R. 11 of Order VII CPC moved by the defendant on which finding are already given vide order dated 14.08.2018 in respect of this issue that it is mixed question of fact and law which cannot be decided without evidence. The only witness of defendant is DW-1 Sh. Manish Gautam. It is deposed that plaintiff was employee as Marketing Executive since the year 2013 who was entitled to incentive. The DW-1 has further deposed that presently he is also working as one of the Director of the defendant company. However in evidence by way of affidavit Ex.DW1/A there is no mention of any evidence that the plaintiff is a worker under Industrial Dispute Act. In absence of any evidence in this regard and any cross-examination of PW-1 in this regard it is held that defendants have failed to discharge burden of proof levied upon them. Accordingly the present issue is decided against the defendant and in favour of plaintiff in that it is held that plaintiff is not a workman and the present suit is not barred by jurisdiction under Industrial Dispute Act.8. ISSUE NO. 2
2. Whether the plaintiff has resigned from the services of the defendant and reappointed by way of fresh appointment vide letter dated 01.04.2015? OPD 8.1 The burden of proof of the present issue is on the defendant. The plaintiff has submitted that she was appointed vide letter dated 25.06.2013 on salary of Rs.9,000/- per month and she was reappointed by the defendant on 01.04.2015 on revised salary of Rs.15,000/- pm. The defendants have claimed that plaintiff has resigned which was duly accepted but on the request of plaintiff only she was reappointed on 01.04.2015. It is claimed that appointment letter dated 01.04.2015 is not a reappointment letter but it was a fresh appointment. It is submitted by the plaintiff that she was promoted three times by the defendant. It is submitted that plaintiff gave business to the defendant which is reproduced at para no. 10 of the replication in detail. In deposition of PW-1 it is denied that plaintiff has resigned from defendant company and later she had been appointed vide Ex.PW1/3. The DW-1 in his evidence by way of affidavit Ex.DW1/A at para no. 6 deposed that plaintiff had resigned from the service of defendant and was looking for other job. However the date of such resignation was not mentioned. Had there been any resignation then no such resignation letter is shown on record or that the defendants had ever cleared entire dues of the plaintiff on such unknown date of resignation. The pleading of the defendants are bad u/R.4 of Order VI CPC in this regard in absence of any specific date, month and year of the alleged resignation on the face of denial by the plaintiff. In view of facts discussed above it cannot be said that the plaintiff has ever resigned from the service of defendant and therefore it is held that the defendants have failed to discharge burden of proof under the present issue and accordingly the present issue is decided against the defendants and in favour of plaintiff in that plaintiff did not resign from the service of defendant and the appointment vide order dated 01.04.2015 was not a reappointment but only renewal of appointment under issue.
9. ISSUE NO. 33. Whether the plaintiff is entitled for recovery of Rs.6,47,782/- as her salary dues and incentives against the defendant having worked as Marketing Executive with the defendant? OPP 9.1 The burden of proof of the present issue is on the plaintiff. Keeping in view finding under issue no. 2 above the plaintiff is in continuance employment of the defendant since 25.06.2013 till her alleged termination from the service in the month of December 2015. According to the plaintiff who has deposed as PW-1 that her incentive for three months which are October, November and December 2015 are not paid to her by the defendants. The entire amount of incentives claimed by her is Rs.6,47,782/-. It is by deposed by PW-1 that this amount is claimed towards incentives only and not towards the salary. However in the suit filed by the plaintiff she has claimed Rs.15,47,782/- as the total amount of compensation with pendentelite and future interest. Out of the said total amount Rs.9 lakh is claimed by the plaintiff as compensation on account of mental harassment and physical torture and loss of valuable time. Hence other than Rs. 9 lakh as the own admitted case of the plaintiff she has claimed the remaining amount of Rs.6,47,782/- only as incentives due to her and not dues of the salary.
9.2 The offer letter Ex.PW1/1 dated 25.06.2013 mentions grant of incentive @20% of the net revenue earned by the plaintiff for the company. Vide Ex.PW1/2 dated 01.01.2014 the incentives are granted @15% of net revenue earned by the plaintiff for the company. Vide Ex.PW1/3 dated 01.04.2015 the incentives are granted to the plaintiff @15% of net income to FSPL after taking into account all expenses relating to such disbursal or client. It is further mentioned therein that the incentive relating to the said account will be paid alongwith salary of the month subsequent to the said month and example is given that incentive for the month of April 2015 will be paid in the month of June 2015. The document Ex.PW1/3 is relevant for decision of the present issue and this document remains proved on record and admitted by the defendant in cross-examination of PW-1 by suggesting that plaintiff has accepted the appointment letter Ex.PW1/3. The plaintiff has claimed incentive for the month of October, November and December 2015 and therefore vide Ex.PW1/3 the said incentive have become due in the month of December, 2015, January 2016 and February 2016 respectively.
9.3 To prove the work done for the defendants PW-1 has deposed in reference to Ex.PW1/11 which contains details of computation of the incentive. It also contain E- mail from defendant no. 2/Sh. Manish Gautam to the E-mail of the plaintiff. The E- mail is dated 10.12.2015. The further attached E-mail from defendant to plaintiff is dated 10.12.2015. Hence the E-mail was sent by the defendant to the plaintiff admitting that this was the loan amount extended. Only one loan to Sh. O.P. Chanana for a sum of Rs.2,97,23,104/- mentions that no incentive to be paid as incentive criteria is not met. However it is not mentioned that what incentive criteria was not met and why the incentive was not paid. It also mentions detail of loan disbursement and claim for incentive for the period from 15.10.2015 to 15.12.2015. The Ex.PW1/12 is E-mail from defendant's team leader Ms. Shilpi Mehra to the plaintiff mentioning the loan extended for the period from 15.10.2015 till December 2015 and the subject is "Incentive Sheet". Therefore the disbursal of loan to various companies detailed therein is admitted by the defendant and proved by the plaintiff on record by this document. It is mentioned that this document is incentive sheet. This document is admitted document by the defendant and it remains unimpeached and unrebutted in cross-examination of PW-1.
9.4 Hence the onus has shifted on the defendants to show that why incentive on such disbursal of loan vide Ex.PW1/12 should not be paid to the plaintiff @15% of net income to FSPL or @ 20% as the case may be after taking into account all the expenses. The onus of proof is on the defendant as plaintiff cannot know the expenses incurred by the defendants nor the plaintiff could know the net income of defendants in respect of said loans. The defendants has failed to put to PW-1 in cross- examination about the net income of the defendants. The defendants have failed to show their net income after making expenses on extension of such loan vide Ex.PW1/12. The defendants have failed to produce any evidence in deposition of DW-1 in respect of the same. DW-1 has deposed that the salary and incentive for the said period for the month October, November and December all has been paid to the plaintiff. Hence it is admitted case of the defendants that incentives had to be paid to the plaintiff for the said period. Merely deposing that the incentives are so paid is no evidence in absence of supporting documents and amount paid to the plaintiff are not produced on record in this regard. The defendants have failed to show any evidence in this respect. It is admitted by DW-1 vide Ex.PW1/4 dated 26.08.2015 the minimum number of file required for incentive are two. Ex.PW1/2 is admitted. The DW-1 could not show Rule and Bye-Laws of company regarding salary and incentive of the employee nor he has produced the same despite grant of opportunity from 03.07.2019 to 04.12.2019 for production of said Rules and Bye-Laws. DW-1 had admitted Ex.PW1/4. It is admitted as correct by DW-1 that the ledger Mark D1/3 filed by the defendant from 01.04.2015 to 30.12.2015 reflects the salary and incentives paid to the employee. However the DW-1 has failed to show that which is the amount in Mark D1/3 which was paid to the plaintiff as incentive for the disputed period. Mere filing of ledger account is no discharge of liability on behalf of defendant since it is admitted case of the defendant that the incentive for the month of October had to be paid in December then incentive if any had to be paid to the plaintiff are required to be paid in the month of December only. However in own ledger account of the defendant Mark D1/3 not even a single payment is shown as incentive in the month of December 2015. Only one payment is shown in December which is sum of Rs.8,500/- on 11.12.2015 and thereby the same cannot be taken as incentive in absence of necessary deposition in this respect and also in view of admitted fact that Rs.8,500/- was the final due amount but how it has finally become due in reference to the claim of the plaintiff is not substantiated nor rebutted by the defendants. Therefore it is held that defendants have failed to discharge the onus of proof shifted on them for due amount of Rs.6,47,782/-. The defendants have failed to impeach by evidence the said claimed amount by the plaintiff on the face of Ex.PW1/12 and evidence discussed above. In Ex.PW1/4 it is mentioned that the net revenue of the firm if crosses 401-800K then the rate at which incentive is applicable is 20%. This is own document of the defendant. The burden was on the defendant to show that what was the net revenue in this period which they have failed to show. In absence of the same it is held that this amount is due to the plaintiff from the defendants as incentive for the month of October, November and December 2015 for which defendants are held liable. Accordingly present issue is decided in favour of plaintiff and against the defendants in that defendants are held liable to pay the plaintiff a sum of Rs.6,47,782/- as incentive for the month of October, November and December 2015.
10. ISSUE NO. 44. Whether the plaintiff is entitled to Rs.9 lakh on account of mental harassment and physical torture? OPP 10.1 The burden of proof of the present issue is on the plaintiff. The plaintiff in the pleading has claimed Rs.9 lakh for mental harassment and physical torture and loss of time. For the loss of time which is wrongful withholding of due money to the plaintiff also has claim of interest on due amount therefore two compensation cannot be provided to the plaintiff for one due amount. Hence for such loss of time the submission of plaintiff are considered under the head of pre-suit interest.
10.2 The plaintiff has to show that for this withholding of due amount she is entitled damages separately for mental harassment and physical torture. In the entire evidence of PW-1 or in the pleadings of the plaintiff it could not be made out that what was the nature of physical torture caused to the plaintiff. Physical torture means that plaintiff was violated physically. However there are no averments in this regard as to any date, month and year. In absence of the same the plea for damages on account of physical torture is rejected. The claim for mental harassment has to be shown by the plaintiff in the nature of wrongful loss of money due from the defendants. However the plaintiff is required to show damage in the nature other than loss of money for such wrongful withholding of money. However it is found that this claim is in the nature of pre-suit interest only. The relevant citation in this regard is reproduced hereasunder:
In the case titled S.P. Virmani & Sons Pvt. Ltd. v. OTC Exchange of India in RFA No. 576/2005 dated 30.10.2017 from Hon'ble High Court of Delhi at para no. 6 and 7 are reproduced hereasunder:
4. I have gone through the grounds/arguments urged on behalf of the respondent/review petitioner and each of the grounds/arguments relied upon by the respondent are already exhaustively dealt with in paras 6(i) to 6(iii) and paras 7 and 8 of the impugned judgment by holding that the entitlement of the respondent was to forfeit the application amount only after grant of dealership and admittedly no dealership was granted to the appellant/plaintiff because appellant/plaintiff had failed to fulfill the necessary formalities including of giving of an undertaking and which was not given.
Also, in paras 7 and 8 of the impugned judgment passed by this Court on 30.10.2017 it is recorded that no loss has been caused to the respondent/review petitioner and therefore even assuming there was a contract but since no loss is pleaded and proved therefore the application money of the appellant/plaintiff could not have been forfeited. I also note that even as per the admitted terms and conditions on account of the applicant not completing formalities only an appropriate amount could be forfeited and not entire application amount and this aspect has been dealt with in paras 6(i) to 6(iii) of the impugned judgment. The relevant paras 6(i) to 6(iii), 7 and 8 read as under:-
"6.(i) In my opinion, appellant/plaintiff is entitled to succeed and the impugned judgment has to be set aside because it is seen that on the record of this case, there is no Clause 16 of Annexure-1 to the application form and all that is there on record of the trial court is Clause 11(A) of the procedure of selection which specifies that the onetime non-refundable dealership fee would be of Rs.6 lacs and dealership is non-transferable. Once therefore there is no clause providing for forfeiture for non- compliance of formalities, the respondent/defendant could not have forfeited the amount received by it for prospective dealership. Even assuming for the sake of arguments that there is a Clause 16 of Annexure- 1 to the letter dated 24.8.1995, and which in addition to what is stated in Clause 11(A) of the procedure for selection provides that if the dealership is terminated the fee of Rs.6 lacs is non-refundable by the respondent/defendant, even then this clause will come into operation only if dealership is granted. Admittedly, no dealership was granted to the appellant/plaintiff or its sister concern. The issue therefore of forfeiture of dealership fee could only be if the dealership is granted and thereafter cancelled.
(ii) Most importantly I may note that in terms of the same application form containing procedure for selection, in Clause 11(B) and (C) thereof, it is specifically provided that processing fee is only Rs.2,000/- and in case a person is not selected as a dealer, then, after deducting the processing fee of Rs.2,000/-, the remaining amount of Rs.98,000/-
would be refunded.
(iii) Also the undertaking Ex.D2 dated 21.2.1995 given by the appellant/plaintiff only provides that in case of any non-compliance of the undertaking dealership will lapse and decision of the respondent/defendant will be accepted but this undertaking nowhere provides that even before dealership is granted, then, the amount of Rs.6,25,000/- lacs which is given by an applicant, who is a prospective dealer, would stand forfeited for non- compliance of formalities. As already stated above, in terms of Clause 11(B) and (C) of the procedure for selection, in case of non-appointment as a dealer there would only be a processing fee charge of Rs.2,000/- and that no other amount would be deducted by the respondent/defendant. In my opinion therefore the appellant/plaintiff is entitled to succeed by respondent/defendant being directed to refund a sum of Rs.6,23,000/- instead of a sum of Rs.6,25,000/-, along with interest from the date of service of the legal notice dated 21.3.1997 (Ex.PW1/6).
7. In my opinion there is also a legal issue on the basis of which this appeal has to be allowed and the suit for recovery filed by the appellant/plaintiff has to be decreed. This is because of the provisions of Sections 73 and 74 of the Indian Contract Act, 1872. In law merely because there is a breach of contract such breach is not actionable unless because of the breach loss is caused to the aggrieved party. There can be forfeiture of an amount paid under a contract only when the aggrieved party is caused loss. Two relevant judgments in this regard are the judgments of the Constitution Bench of the Supreme Court in the case of Fateh Chand Vs. Balkishan Dass AIR 1963 SC 1405 and the recent judgment of the Supreme Court in the case of Kailash Nath Associates Vs. Delhi Development Authority and Another, (2015) 4 SCC
136. The relevant paras in the judgment in the case of Kailash Nath Associates (supra) are paras 34, 43 and 43.1 to 43.7 and these paras read as under:-
"34. In Fateh Chand v. Balkishan Das, this Court held: "The section is clearly an attempt to eliminate the somewhat elaborate refinements made under the English common law in distinguishing between stipulations providing for payment of liquidated damages and stipulations in the nature of penalty. Under the common law a genuine pre-estimate of damages by mutual agreement is regarded as a stipulation naming liquidated damages and binding between the parties: a stipulation in a contract in terrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation. The Indian Legislature has sought to cut across the web of rules and presumptions under the English common law, by enacting a uniform principle applicable to all stipulations naming amounts to be paid in case of breach, and stipulations by way of penalty.....
* * * Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case.
Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. The section undoubtedly says that the aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of "actual loss or damages"; it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach.(At page 526, 527) * * * Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties pre-determined, or where there is a stipulation by way of penalty. But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a Plaintiff. The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for forfeiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated. The jurisdiction of the court is not determined by the accidental circumstance of the party in default being a Plaintiff or a Defendant in a suit. Use of the expression "to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract. The court has to adjudge in every case reasonable compensation to which the Plaintiff is entitled from the Defendant on breach of the contract. Such compensation has to be ascertained having regard to the conditions existing on the date of the breach."
xxxxx xxxxx xxxxx
43. On a conspectus of the above authorities, the law on compensation for breach of contract Under Section 74 can be stated to be as follows:
43.1. Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.
43.2. Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.
43.3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section. 43.4. The Section applies whether a person is a Plaintiff or a Defendant in a suit.
43.5. The sum spoken of may already be paid or be payable in future.
43.6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-
estimate of damage or loss, can be awarded.
43.7. Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application." (underlining added) 10.3 The plaintiff is required to prove legal injury and out of consequent damage out of such legal injury only. The plaintiff has contract of employment with the defendants. The consequent compensation for wrongful withholding is interest only. Plaintiff has failed to show legal injury as claimed by her and consequential damage in this regard and therefore the claim of plaintiff for mental harassment and physical torture is rejected. The plaintiff has failed to show by evidence that how such damage occurred to her which can be computed in monetary terms for a sum of Rs.9 lakhs.
10.4 As far as wrongful withholding of due money is concerned the same is considered in view of citation S.P. Virmani & Sons Pvt. Ltd. (supra) referred above.
10.5 In view of the above and finding under issue no. 3 above it is held that the defendant is liable to pay all dues of the plaintiff atleast after the month of February 2016. The due hence become payable by March 2016. The plaintiff has filed the present suit on 02.03.2016. For 02.03.2016 and thereafter the interest due to the plaintiff is considered under the heading pendentelite and future interest only. Hence prior to filing of the suit it is held that no interest was due to the plaintiff as the suit was filed immediately when the money was become due. In view of the above the plea of the plaintiff for damages and pre-suit interest is dismissed. Accordingly present issue is decided against the plaintiff and in favour of defendants.
11. ISSUE NO. 55. Whether the plaintiff is entitled pendente lite and future interest on the due amount @ 24% p.a.? OPP 11.1 The burden of proof of the present issue is on the plaintiff. The findings under issue no. 4 above, are equally applicable under the present issue and be read as part and parcel of the present issue. The same are not repeated herein for the sake of brevity.
11.2 As already discussed above the plaintiff has filed the suit just immediately when the amount has become due. It is already held that plaintiff is entitled to a sum of Rs.6,47,782/- from the month of March 2016. This amount is due to the plaintiff by way of incentive vide Ex.PW1/11 and Ex.PW1/12 the plaintiff is claiming the incentive @15% of the said profits of the defendant in terms of Ex.PW1/3. In Ex.PW1/4 it is mentioned that the net revenue of the firm if crosses 401-800K then the rate at which incentive is applicable is 20%. This is own document of the defendant. The burden was on the defendant to show that what was the net revenue in this period which they have failed to show in this period. The relevant citation is reproduced hereasunder:
In the case titled State Bank Of India vs Shri Umanath Ganpat Nadkarni And ... on 9 April, 1999 Equivalent citations: 1999 (3) Bom CR 696
10. In N.M. Veerappa v. Canara Bank and others (supra), the Apex Court held that section 34 of the Code of Civil Procedure applies to simple money decrees and payments of interest pending such suits. Order 34, Rule 11 of Code of Civil Procedure deals with mortgage suits and payment of interest. It is therefore obvious that so far as mortgage suits are concerned, the special provision in Order 34, Rule 11 alone would be applicable and not section 34.
11. In Union Bank of India v. M/s. Noor Dairy Farm and others (supra), the learned Single Judge of this Court has held that the Supreme Court has observed in the case of Corporation Bank v. D.S. Gowda and another (supra), that in the case of agricultural loan the bank cannot charge compound interest at 3 months or half yearly rests. It was further held that in view of the said decision of the Apex Court, it is not permissible for the Banks to charge interest at half-yearly rests in case of agricultural loans and in such cases there is no scope for claiming compound interest with periodical rests.
13. Section 34(1) of the Code of Civil Procedure provides that where and insofar as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit. The proviso to the said section states that where the liability in relation to the sum so adjudged has arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which monies are lent or advanced by nationalised banks in relation to commercial transactions. The Explanation II defines a transaction to be a commercial transaction if it is connected with the industry, trade or business of the party incurring the liability. Sub-section (2) of section 34 provides that where a decree is silent with respect to the payment of further interest on such principal amount from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.
14.Section 34 apparently deals with the liability to pay interest in money suits during the pendency of the suit as well as after the disposal of the suit till the payment of the entire amount. It does not relate to the interest prior to the filing of the suit as it is a matter of substantive law and it is outside the scope of the said section. In other words, section 34 empowers the Court to award interest pending the suit and after the disposal of the suit. This is also clear from sub-Section (2) of the said section wherein it is provided that when a decree is silent about the payment of interest from the date of decree, it shall be deemed that the Court has refused to grant such interest and the decree-holder would not be entitled to file any separate suit in respect of such claim. As regards the interest during the pendency of the suit, the section itself provides that the Court "may order interest at such rate as the Court deems reasonable". Therefore, the rate of payment of interest has been made a matter of discretion, of course, to be exercised judiciously by the Court.
15. It is thus clear that the grant of interest under section 34 is a matter of discretion and is to be exercised based on the facts and circumstances of each case. The trial Court in the case in hand has awarded interest at the rate of 6% per annum from the date of the filing of the suit till the date of payment of the entire amount. The materials on record do not disclose any justification for grant of any interest at the rate beyond 6% awarded by the trial Court. In order to enable the trial Court to grant the interest beyond the rate of 6% it was necessary for the appellant to place on record the materials justifying the same. The appellant, therefore, is not entitled for contractual rate of interest from the date of filing of the suit till the date of payment of the entire amount.
20. As regards the third question, it is clearly covered by the decision of the Division Bench of this Court in the matter of Mahadeo Rama Bhonsle and others v. Central Bank of India and another (supra). It has been clearly held therein that the amount of interest is to be calculated on the principal sum only and not the principal sum plus the interest accrued till the filing of the suit. The decree as far as it awards the interest on the total sum of Rs.
1,03,088/- which includes interest on the amount till the date of filing of the suit has to be modified so as to restrict the same to the principal sum of Rs. 95,000/- only. In other words, the appellant shall be entitled for interest at the rate of 15.5% per annum for a period from 30-6-1992 till 23-11-1992 on the total sum of Rs. 95,000/-.
In such circumstances of the case for such wrongful withholding of due amount to the plaintiff interest is awarded to the plaintiff and against the defendants @6% p.a. u/Sec. 34 CPC from the date of filing of the suit which is 02.03.2016 till the recovery of due amount. Accordingly present issue is decided in favour of plaintiff and against the defendants.
R E LI EF
12. In view of findings under issues above the present suit of the plaintiff is decreed. It is held that the defendants are liable to pay a Rs.6,47,782/- as incentive for the month of October, November and December 2015 alongwith pendentelite and future interest against the defendants @6% p.a. u/Sec. 34 CPC from March 2016 till the recovery of due amount. Decree sheet be prepared accordingly.
File be consigned to record room.
Digitally signedAnnounced in the open Court JOGINDER by JOGINDER PRAKASH on 17.01.2020. PRAKASH NAHAR NAHAR Date:
2020.01.20 16:22:42 +0530 (JOGINDER PRAKASH NAHAR) ADDL. DISTRICT JUDGE-04 CENTRAL/TIS HAZARI COURT/DELHI