Firozshaw vs State

Nevaskar, J.—This appeal arises out of a suit filed by the Plaintiff Firozshaw Rustomji of Pratapgarh and Dohad against the state of Madhya Bharat for the recovery of Rs. 14,000.

The claim consisted of three items of Rs. 12,001 deposited by him as Akbari contractor with erstwhile Sailana state and the Defendant for securing contracts for the manufacturer and distribution of country liquor within the limits of Sailana State for three periods ranging from 1-10-1943 to 30-9-1949, with interest thereon together With Rs. 6,615-5-9 spent on repairs etc. as per the terms of the contract, Rs. 120-9-0 for the loss sustained by him duo to breakage, Rs. 3595 for price of liquor supplied from 1-10-1948 to 30-9-1949 and Rs. 650 in respect of price of corrugated sheets affixed by him on the structure constructed by him at the distillery.

The Plaintiff gave credit to the sum of Rs. 9178-12-0 due to the Defendant from him & claimed a decree for the balance.

Plaintiff while claiming relief in respect of the corrugated sheet expressed his willingness to have the corrugated sheets themselves or their price as stated by him.

The Defendant admitted the amounts deposited but denied its liability to pay interest as claimed by the Plaintiff except a sum of Rs. 97-8-0. It further admitted the sum of Rs. 5,615-9-0 for repairs during the period of first contract. Claim in respect of price of corrugated iron sheets was also denied. The Defendant claimed interest at 1 per cent per month on the sum found due from the Plaintiff to the State as per terms of the contract till the date of the suit. This claim was set out in a schedule attached to the written statement and amounted to Rs. 3468-10-0.

The trial Court on evidence decreed the Plaintiff''s suit for Rs. 3,112-11-9 after awarding Defendant''s claim for interest amounting to Rs. 3,468-10-0 and disallowing Plaintiff''s claim for interest in respect of corrugated sheets.

Plaintiff has preferred this appeal, challenging the decision of the Court below for its failure to award interest to the Plaintiff in respect of the sums in deposit with the Defendant, for the award of Interest to the Plaintiff and for its failure to grant a decree either for the return of corrugated sheets or payment of the price thereof as claimed.

Plaintiff''s claim for interest except such as is admitted and allowed by the Court is not based on any contract. Plaintiff claims this interest on the ground that the Defendant wrongfully delayed payment of the deposits.

Defendant''s claim for interest is based on contract. The terms of the contract provide that the Plaintiff would be liable to pay interest at 1 per cent per month on the dues which he will be found liable to pay to the State on 10th of every month irrespective of the deposit. The controversy between the parties about this matter is whether interest can be charged by the State after 6-1-1949 when it was intimated by Mohanlalji Bagadia an agent of the Plaintiff to the Customs and Excise Officer that the dues of the State might be adjusted towards the sum of Rs. 5615-5-6 for repairs etc. and of Rs. 7,000 of deposit and the balance might be paid to him.

As regards the corrugated iron sheets the dispute is far from clear. There is no proper pleading on behalf of the State. It was not clear whether the Defendant denied the Plaintiff having put the corrugated sheets or it wanted to contest their price or lastly the Plaintiff''s right to remove them and take them away.

It appears from the evidence on record that 13 of these corrugated sheets were put over the garage constructed, by the Plaintiff for his car, 8 for covering vats of liquor and 2 for a bullock shed. Plaintiff''s agent Mohanlal states on oath that these 28 corrugated sheets had been put by the Plaintiff. There was no cross examination of the witness on the point. No evidence is adduced to prove that they were put by the Defendant and at its costs.

Plaintiff''s claim for these sheets under the circumstances was wrongly disallowed. The Plaintiff is entitled either to remove these 28 sheets or claim their price Rs. 560 as claimed by him.

As regards Plaintiff''s claim for interest Mr. Sanghi contends that this claim was allowable as a claim in equity or as damages for breach of contract in failure to return the deposit amount even after adjustment of Defendant''s claim. He argued in the alternative that the claim could rest u/s 23, Trusts Act read with Section 94 of that Act.

I am unable to accept this contention. On Plaintiff''s own showing the claim is for wrongful detention of his dues. There is no contract in this case nor can we apply provisions of Interest Act, which do not apply to the claim in suit. The case appears to be directly covered by the decision of their Lordships of Privy Council reported in AIR 1938 67 (Privy Council)

It is difficult to call this sum as covering amount of damages for breach of contract. The claim is not for damages for breach of contract but for the return of deposit of money for due performance of the contract after its due fulfilment. The case cited by the learned Counsel reported in Digbijai Nath Vs. Tirbeni Nath Tewari, has therefore no application. Nor can Plaintiff invoke Sections 23 and 94 of the Trusts Act. Relation between a depositor and a depositee cannot be said to partake the character of a constructive trust as deaft with u/s 94 of the Trusts Act. No case has been cited to support this contention. In my opinion, the Defendant by failing to pay back the deposit can be said to have wrongfully detained a debt and this is exactly the case they put. No case was put forward regarding the position now taken that there was a constructive trust and the Defendant had committed a breach of trust express or implied exposing it to the liability u/s 23, Trusts Act.

The Plaintiff''s claim for interest was rightly dismissed.

As regards the contention that the lower Court ought not to have allowed interest after 6-1-1949 when the Plaintiff''s agent had clearly authorised to appropriate the part of Plaintiff''s dues to wards the State dues.

This appears to be correct. It is clear from Ex. P/1 that the Plaintiffs agent had authorised the adjustment of State dues as against his claim for repairs and deposits. No contract for this purpose is necessary. A unilateral authorisation on behalf of Plaintiff was enough as the Defendant was in charge of the fund. If the Defendant in spite of this allowed the liability of the Plaintiff to be outstanding and charged heavy rate of interest at 1 per cent per month it itself was to blame. It is unjust for the Defendant to foist a claim for interest at such a heavy, rate by its own wrongful act in delaying adjustment on paper when in fact it should have been done immediately after 6-1-1949.

The Defendant''s claim for interest after 6-1-1949 is therefore wrongly allowed by the Court below.

The appeal, therefore, is partly allowed and decree of the lower Court is modified by disallowing Defendant''s claim for interest from 6-1-1949 up to the date of suit amounting to Rs. 3,045-7-0 and by allowing Plaintiff''s claim in respect of his 28-corrugated iron sheets. He may either be allowed to take them or the Defendant should pay their price of Rs. 560.

The rest of the claim in appeal is dismissed.

Parties will be entitled to costs according to their success and failure.

Smvatsar, J.

I Agree

This is a petition u/s 152 CPC for the award of future interest which has been omitted by accidental slip or omission both in the judgment and decree of this Court.

The point regarding future interest was specifically argued by Mr. Sanghi in his argument at the time of hearing of the appeal. He had then contended that after the Plaintiff had authorised the adjustment of the dues of the Defendant on (sic) there was no good reason for the Defendant to detain the Plaintiff''s dues. It was also contended that the attitude taken by the Defendant at the trial was that the Plaintiff''s claim was totally denied even including the claim in respect of the corrugated sheets. The Plaintiff''s claim therefore for the grant of future interest was justified.

This part of the contention of Mr. Sanghi absolutely slipped from my mind at the time of dictating the judgment and the error was due to accidental omission.

For this accidental omission on my part I should not drive the Applicant to a review petition.

The contention raised by Mr. Sanghi is correct.

When the Defendant was intimated on 6-1-1949 on behalf of the Plaintiff mat the dues of the Defendant might be adjusted as against his Claim against the Defendant, the Defendant should have done so and should not have withheld payment thereafter. The Plaintiff, however, was not awarded interest from that date upto the date if suit in the absence of agreement or any provision of law. But after the suit was tiled the Defendant did not deposit the amount to which he was found liable in Court nor did he admit the claim. The delay caused in Plaintiff''s realisation was therefore due to the attitude of the Defendant at the trial. There was no good reason why the discretion regarding grant of future interest ought not to have been exercised by the trial court in Plaintiff''s favour.

I think, therefore, the Plaintiff is entitled to future interest on the claim decreed in his favour from the date of suit till realisation at 6 per cent per annum.

The decree may be modified accordingly.

Samvatsar, J.

I agree.

In his petition u/s 152, Code of Civil Procedure, submitted on behalf of the Plaintiff-Appellant two points were raised:

Regarding award of interest pendente lite and

Mention of time within which the payment is to be made by the Defendant to the Plaintiff according to Section 82 of the Code of Civil Procedure.

By our order dated 20-1-1956 only first of these matters was determined bat no order was passed with regard to the second matter. In view of the specific provision of Section 82 CPC it is necessary to specify the time within which the decree is to be satisfied by the Defendant the State Government.

I therefore in exercise or my powers u/s 152 CPC direct that the Defendant shall satisfy the decree within six months from the date of judgment.

An amendment accordingly be made both in the judgment and the decree.

Samvatsar, J.

I agree.