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Judgment
Bellie, J.—Originally the suit was filed by the first plaintiff Kerala Lakshmi Mills Limited and since it has been subsequently taken over by the
National Textile Corporation the said mill as a unit of the Corporation has been imp leaded as the second plaintiff. In fact the second plaintiff has
been sub situated for the first plaintiff. Thought the plaintiffs have got a decree for a sum of Rs. 37,295/- since their claim for interest thereon before
the suit has been denied they have tiled this appeal. The plaintiff had dealing with the defendant Textual Company Limited by placing order for
manufacture and supply of textile machinery by the defendant to the plaintiff and the plaintiff had been making advance payments therefore. A
substantial amount of such advances paid became outstanding with the defendant on account of failure to supply goods and since in spite of time
being extended again and again at the request of the defendant there was no delivery the said outstanding amount was demanded by the plaintiff in
1966. Since it was not paid the suit had to be filed for an amount of Rs. 66,020.50 with interest thereon the plaintiff has claimed a total sum of Rs.
83,858.35.
Against this the defendant raised several contentions one of them being that the plaintiff is not entitled to interest before suit.
Subsequent to the suit some payments have been made by the defendant. At the time of trial the defendant had given up all its contentions
except the one relating to the claim of interest. The trial Court deducting from the suit claim the amounts paid during the pendency of the suit, held
that the plaintiff is entitled to decree for the principal amount of Rs. 37,295/- with interest at 6% per annum From the date of suit till date of
realization. It rejected the plaintiffs'' claim for interest on the amount that was due prior to suit. Aggrieved by the rejection of the claim for interest
before suit the plaintiff has filed this appeal.
The only question is whether the plaintiff was entitled to interest on the amount that was due before the suit as claimed by them. The trial Court
has held that there was no agreement to pay interest. It rejected the submission of the plaintiffs that the plaintiffs should have been awarded interest
as per the provisions of the Sale of Goods Act.
Mr. N. Varadarajan, learned counsel for the appellant-plaintiff argues that in the circumstances of the case the trial Court ought to have allowed
interest under S. 61 of the Sale of Goods Act. As per S. 61(2), in the absence of a contract to the contrary, the court may award interest at such
rate as it thinks fit on the amount of the price-
(a) to the seller in a suit by him for the amount of the price-from the date of tender of the goods or from the date on which the price was payable;
(b) to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller-from the date on which the
payment was made.
According to the learned counsel the present case comes under clause (b). I am not able to agree.
The plaintiff placed orders to the defendant for supply of textile machineries and it had made advance payments. As and when the machineries are
delivered the defendant would adjust the advances so made towards the sale price. This position is not in dispute. There is no agreement which
obliges the defendant to supply goods. It is not the plaintiff''s case that the defendant was bound to supply machineries and if it failed to supply so it
would commit breach of contract. Therefore if the defendant has not supplied the machineries there is no breach of contract on its part. This being
the case the said clause (b) of Sub Section (2) of S. 61 is not attracted. Therefore there is no merit in the plaintiffs'' claim that it was entitled to
interest for the amount that was due for the period before the suit.
In Rohtas Industries Ltd. Vs. Sukhmoy Moitra, an identical case arose. The Division Bench which delivered the judgment said as follows:
The plaintiff, however, is not entitled to any interest on the said amount prior to the date of the suit as no contract to pay interest on the balance of
the money advanced remaining due has been proved learned Subordinate Judge has awarded interest at 1 per cent per month from 25.5.49 upto
the date of the trial Court decree under S. 61(2)(b) of the Sale of Goods Act. But this is not a suit by the plaintiff for the refund of price on account
of any breach of contract on the part of the seller and hence the plaintiff is not entitled to any interest prior to the date of institution of the suit under
the said provision of law.
This decision strongly supports the view expressed by me above.
Mr. Varadarajan in support of his submission relied on three decisions viz. Digbijai Nath Vs. Tirbeni Nath Tewari, ) The The Official Receiver,
Calcutta High Court and Another Vs. Baneshwar Prasad Singh and Another, and Union of India (UOI) Vs. The Steel Stock Holders Syndicate
Poona, . But in all these cases on the facts therein which are entirely different from the facts in our case it has been held that there was breach of
contract, and interest was awarded. Therefore these decisions will not in any way help the appellant-plaintiff. In the result the appeal is dismissed,
but in the circumstances of the case there will be no order as to costs.