Jai Narain and Co. vs Market Committee, Sonepat

J.V. Gupta, J.

This judgment will also dispose of Regular Second Appeal No. 1364 of 1971, as the question involved is common in both the cases.

The Market Committee, Sonepat, raided the premises of the plaintifffirms on December 31, 1969, and seized their documents on January 5, 1970. In the suit, giving rise to this second appeal, according to the plaintifffirm, the Market Committee recovered from it a sum of Rs. 9,000/ i.e., Rs. 4,500/ as the Market fee and Rs. 4,500/ as the penalty. In the suit, giving rise to Regular Second Appeal No. 1364 of 1978, according to the plaintifffirm, a sum of Rs. 5,750/ was recovered from it by the market Committee i.e. Rs. 2,875/ as the market fee and Rs. 2,875/ as the penalty. The plaintiffs agitated the matters at the executive level, but in vain. Ultimately, they filed civil writ petition in the High Court wherein direction was given that fresh orders of assessment be made after giving an opportunity of being heard to the petitioners. Ultimately, on reassessment a sum of Rs. 50.19 was assessed as the market fee and an equal amount was imposed as penalty; thus the total demand being Rs. 100.38. Since the plaintiff had already deposited Rs. 9,000/ on January 5,970/ it claimed the refund of the balance amount along with interest after adjusting the demand of Rs. 100.38 the Market Committee. This claim was not accepted. Therefore, the plaintiff filed the suit for the recovery of Rs. 14,399.62, i.e. Rs. 8,899.62 as the amount due from the defendant; Rs. 4,000.00 as interest and Rs. 1,000/ on account of the expenses incurred on litigation. In the suit giving rise to Regular Second Appeal No. 1364 of 1977 on reassessment, the amount was assessed to be Rs. 1.322.78 and, therefore, the plaintiff claimed the balance amount of Rs. 4,427.22 along with interest amounting to Rs. 2,000/ and Rs. 1,500/ as the expresses incurred on litigation. Before the filing of the suits, necessary notices were given to the defendant Committee. In the written statement the defendant did not deny the receipt of Rs. 9,000/ and Rs. 5,750/ respectively. The Committee also admitted that on reassessment the amount was reduced. However, it was pleaded that the plaintiffs were not entitled to the recovery of the amounts paid by them, as they were barred by time. It was also averred that the plaintiffs were not entitled to any interest. The trial Court decreed the plaintiffs'' suits for the recovery of Rs. 8.899.62 and Rs. 4,427.22, respectively. The defendant never filed any appeal whereas the plaintiffs filed appeals wherein they claimed the amounts of interest. The learned Additional District Judge found that the trial Court rightly disallowed the claim of interest and, thus maintained the decree of the trial Court.

The main question to be decided in these two appeals is as to whether the plaintiffs are entitled to the amount of interest which they claimed at the rate of 6 per cent per annum from the date of the deposit till the date of suit.

The learned counsel for the appellants contended that once it is found that the market fee was illegally recovered by the defendant, the plaintiffs were entitled to claim the damages by way of interest on the excessive amount. In support of the contention, the learned counsel relied upon National Insurance Co. v. Life Insurance Corporation of India, AIR 1963 Supreme court 1171; M. Dasjee v. Tirupathi Devasthanam, AIR 1965 Supreme Court 1231 and Jaggarnath Singh v. Narayan Sarogi, AIR 1965 Patna 300.

After hearing the learned counsel for the parties, I find force in the contention raised on behalf of the appellants.

The market fee of Rs. 9,000/ and Rs. 5,750/ was illegally recovered by the Market Committee which on reassessment was found to be quite excessive. Prior to the filing of the suits, notices were given to the Market Committee, for the refund of the amounts and when the claims were not accepted, the plaintiff''s were forced to file the suits. The plaintiffs only claimed interest at the rate of 6 per cent per annum from the date of the deposit of the market fee till the filing of the suits. The interest claimed could not be said to be excessive in any manner. No meaningful arguments could be raised on behalf of the defendant to contest the claims of the plaintiffs. Since this amount was illegally withheld by the Market Committee, the plaintiff was entitled to claim damages by way of interest. The view taken by the Courts below in this behalf was wrong and misconceived. It may be that interest in the present case may not be claimed under the main part of section 1 of the Interest Act, 1839, because thereunder not only the amount payable should be certain, but also the further requirement is that it must be payable at a certain time by virtue of a written instrument. This section itself contains the provision that interest shall be payable in all the cases in which it is payable by law. It is well settled that this proviso applies to cases in which Courts exercise equitable jurisdiction to allow interest. In my opinion, the present cases do attract the equitable jurisdiction of the Court.

Consequently, both the appeals succeed and are allowed with costs. The judgments and decrees of the Courts below are modified to the extent that the plaintiffs are entitled to the amounts of interest as well, as claimed by them in the suits.