REPORTABLE  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO.  14    OF 2011 (Arising out of SLP (Civil) No. 19305 of 2010)

Secretary/General Manager  Chennai Central Cooperative Bank Ltd. & Anr. …. Appellants

      Versus  

S. Kamalaveni Sundaram           …. Respondent  

JUDGMENT

R.M. Lodha, J.  

Leave granted.   

2. The short  question for consideration in this appeal,  by  

special leave, is whether the Single Judge of the Madras High Court  

was justified in directing the 2nd appellant to pay interest @ 12% per  

annum on the arrears of rent from  September 9, 1998 to the date of  

decree dated March 24, 2008.

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3. Brief facts leading to the present controversy are these.  

The respondent—S. Kamalaveni Sundaram (hereinafter referred to  

as ‘the landlady’) let out ground floor of her property situate at MRC  

Nagar,  South  Beach  Avenue,  Chennai  to  the  2nd appellant  

(hereinafter  referred to  as ‘the tenant’)  in  the month of  February,  

1990  on  a  monthly  rent  of  Rs.  5600/-  payable  according  to  the  

English  calendar  month.  The  tenancy  was  for  non-residential  

purposes viz., for running the banking business. The landlady filed  

the suit  for  fixation of  fair  rent  against  the tenant  in  1996.    The  

Small Causes Court, Chennai vide its order dated March 27, 1998  

fixed the fair rent at Rs. 32,356/-  per month with effect from October  

28,  1996.   In  September  1998,  the  tenant  vacated  the  leased  

premises. However, the tenant was in arrears of rent at the time of  

vacation of premises. The landlady  sent a notice through her lawyer  

and called upon the tenant to pay a sum of Rs. 5,71,832/-  towards  

difference in rent upto May, 1998 and also rent for the months June,  

July and August, 1998 after giving adjustment of sum of Rs. 33,600/-  

paid by the tenant in advance. The tenant failed and neglected to  

comply with the notice sent by the landlady.

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4. The landlady then filed a suit in the month of December,  

1998 against  the  tenant  for  recovery  of  Rs. 6,83,346/-  in the  

City Civil Court, Chennai. The landlady also claimed interest @ 18%  

per  annum on  Rs.  5,71,832/-  (the  principal  amount  of  rent)  due  

against the tenant.

5. The  plaint  filed  by  the  landlady  suffered  from  certain  

defects and the same was returned to her on January 20, 2000 for  

the rectification of defects. The landlady, however, re-presented the  

plaint after a gap of more than five years, to be precise on July 20,  

2005. Initially an ex-parte decree was passed against the tenant in  

the suit but later on the tenant was permitted to contest the suit after  

the ex-parte decree was set aside.

6. After contest,  the III  Additional Judge, City Civil  Court,  

Chennai  passed  a  decree  on  March  24,  2008  in  favour  of  the  

landlady and directed the tenant to pay to her the arrears of rent  

amounting   to  Rs.  5,71,832/-  with  interest  at  the  rate  of  6% per  

annum from September 9, 1998 to January 21, 2000 and from July  

21,  2005  to  the  date  of  payment.   The  tenant  was  given  three  

months’ time to pay the amount from the date of the decree.     

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7. The landlady challenged the judgment and decree dated  

March 24, 2008 before the High Court of Judicature at Madras. The  

Single Judge of the High Court after hearing the parties allowed the  

appeal preferred by the landlady in part and directed the tenant to  

pay interest @ 12% per annum from the date of the filing of the suit,  

i.e., from September 9, 1998 until March 24, 2008 and @ 6% per  

annum from March 25, 2008 till the date of realization of the principal  

amount of rent.  

8. On July 26, 2010, while issuing notice in the petition for  

special leave to appeal, the following order was passed by us:

“Counsel  for  the petitioners submits  that  there was  no  justification for  the High Court  to grant  interest  for  the  period  January  20,  2000  to  July  20,  2005,  when  the  plaint  had been returned to the plaintiff  for  removal  of  certain defects.

Issue notice.

The execution of the decree as per the High Court  Judgment shall  remain stayed, provided the petitioners  deposit a sum of Rs. 7.5 lakhs before the Court below,  within four weeks from today.”  

9. The  landlady—sole  respondent—has  filed  counter  

affidavit and justified the order of the High Court principally on the  

ground that on the admitted facts and circumstances of the case, the  

High Court has struck the balance on equity as between the parties  

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by  granting  lesser  interest  than  what  was  claimed  by  her  while  

granting interest for the entire period of pendency of the suit.  

10. We heard the learned senior counsel for the tenant and  

the learned counsel for the landlady. Having regard to the facts and  

circumstances of the case, we are unable to sustain the order of the  

High  Court  to  the  extent  the  interest  has  been  awarded  to  the  

landlady for the period from January 20, 2000 to July 20, 2005. As  

noticed  above,  the  plaint  was  returned  by  the  City  Civil  Court,  

Chennai to the landlady on January 20, 2000  for re-presenting the  

same after rectification of the defects. However, for the reasons best  

known to the landlady, the plaint was not re-presented immediately  

nor within reasonable time. As a matter of fact, the matter remained  

dormant  in  the  hands  of  the  landlady  and  the  plaint  was  re-

presented  after  five  years  and  six  months  on  July  20,  2005.  

Obviously, the landlady cannot derive advantage of her inaction or  

lack of  diligence in  re-presenting  the plaint.  Had the landlady re-

presented the plaint within reasonable time, the matter would have  

been  decided  long  back.  As  the  facts  reveal,  the  plaint  was  re-

presented on July 20, 2005 and the suit was decreed by the trial  

court on March 24, 2008. In the circumstances, therefore,  the award  

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of interest for the period January 20, 2000 to July 20, 2005 does not  

seem to be justified.   We are not persuaded by the submission  that  

by not filing the plaint immediately after it was returned or for delay  

in re-presenting the plaint,  the landlady did not gain anything and  

although  she  was  entitled  to  interest  @ 18% per  annum on  the  

arrears of rent, the High Court only awarded interest @ 12% and  

thereby struck a balance on equity.  Whether  the landlady gained  

anything or not by delay in re-presenting the plaint  is not material  

but what is material is that interest is awardable pendente lite taking  

into consideration the facts and circumstances of the case and not  

as a matter of course.    

11.  Section 34 of the Code of Civil Procedure, 1908 (CPC)  

empowers the court to award interest  for the period from the date of  

the suit to the date of the decree and from the date of the decree to  

the date of  payment  where the decree is  for  payment  of  money.  

Section 34 of the CPC does not empower the court to award pre-suit  

interest.  The  pre-suit  interest  would  ordinarily  depend  on  the  

contract (express or implied) between the parties or some statutory  

provisions or the mercantile usage. Be that as it may, we do not find  

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that on equitable considerations the landlady is entitled  to interest  

for the period January 20, 2000 to July 20, 2005.

12. As  a  result  of  the  foregoing  discussion,  the  appeal  is  

allowed in part and the direction given by the High Court to the tenant  

to  pay interest  @ 12% per  annum on the due rent  for  the period  

January 20, 2000 to July 20, 2005 is set aside. Except the above  

modification, the decree  of the High Court stands. The parties shall  

bear their own costs.  

  …………………….J.            (Aftab Alam)

   .………………….. J.           (R.M. Lodha)  

NEW DELHI. JANUARY  4, 2011

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