Judgment:
ORDER
S.K. Agarwal, J.
1. This appeal is directed against the judgment and decree dated 7th August, 1998 passed by the Court of Shri J.M. Malik, Additional District Judge, Delhi granting a decree in favor of the respondent/plaintiff for Rs. 71,500/- (interest calculated at the rate of 1-1/2% per month) with proportionate costs and pendente lite and future interest at the same rate from the date of institution of the suit till realisation of the decretal amount.
2. Brief facts are that the respondent filed a suit against the appellant alleging that he had borrowed a total sum of Rs. 48,000/- through four different cheques; that he had agreed to pay interest at the rate of 3% per month; that neither principal amount nor interest thereon was paid, despite notice dated 1st May, 1988 to the appellant and a decree of Rs. 95,000/- with costs and pendente lite interest and future interest at the rate of 3% per month till realisation was sought. Appellant in the written statement denied the allegations, inter alia, pleading therein that the respondent was doing the business of money leading without any licence; loan acknowledgement receipts being unstamped were not admissible in law; that on 13th January, 1986 he had returned an amount of Rs. 15,000/-, taken on 24th October, 1985 by him from the respondent. It was claimed that the signature on the four receipts in respect of the said four cheques were forged by the respondent and that the father of the respondent and the appellant used to make financial adjustments and no consideration was received by the appellant in respect of the cheques pleaded in the suit.
3. On the basis of the pleadings of the parties, following issues were framed:-
'1. Whether the plaintiff is running the business of money-lending and the suit of the plaintiff is not maintainable, as alleged in para 2 of the preliminary objection of the written statement? OPD
2. Whether the plaintiff has no cause of action of filing the present suit? OPD
3. Whether the acknowledgement receipts are unstamped and inadmissible in evidence. OPD
4. Whether proper court fees has not been paid on the plaint, as alleged in the written statement? OPD
5. Whether this court has no jurisdiction to try the present suit? OPD
6. Whether the defendant has paid the loan amount, as claimed by the plaintiff in para 1 of the plaint through cheque dated 12th June, 1986. OPD
7. Whether the plaintiff has advanced the loans to the defendant on the various dates as alleged in the plaint? OPD
8. Whether the plaintiff is entitled to recover interest? If so, at what rate. OPD
9. Relief.'
4. Learned trial court decided all the issues against the appellant and decreed the suit in favor of the respondent. With regard to the interest, the trial court held that the respondent/appellant was entitled to interest at the rate of 1-1/2% per month.
5. At the admission stage we have heard Mr. S.S. Jain, learned counsel for the appellant and Mr. A.P. Aggarwal, learned counsel for the respondent and have been taken through the record.
6. Learned counsel for the appellant argued that Ex.P.1, Power of Attorney, did not authorise PW.2, S.K. Jain to give statement on behalf of the respondent thereforee his statement should not considered; admittedly, all the receipts were in the hand-writing of the father of the appellant. It was further argued that the respondent deliberately made a false statement by denying his writing on bank-in-slips Ex. DW 2/1 to DW 2/6 on the basis of which suit amounts were deposited in the account of the appellant, he was however completely belied by the evidence of the hand-writing expert in this regard, thereforee his evidence cannot be relied .It was argued that receipts Ex. PW 2/3 to PW 2/5 did not bear signatures of the appellant, on the revenue stamps, thereforee the documents were not admissible; that there was no agreement between the appellant and the respondent regarding rate of interest payable; in the alternative it was argued that a very high rate of interest was allowed by the trial court particularly when PW 2 in his evidence has admitted that different loans were advanced by the family members of the respondent and suits are pending for recovery of loans and in respect of some of the loans no interest was payable; and father of he respondent had been depositing the cheques in the account of the appellant in UCO Bank Branch, Kamla Nagar, Delhi. Learned counsel for the respondent argued to the contrary.
7. The appellant in support of his case had examined himself as DW1; while denying having taken any loan from the respondent he admitted that receipts Ex. PW 2/3 PW 2/5 bear his signatures, he tried to explain that his father used to obtain his signatures on blank documents from him and that the contents of the receipts might have been written by his father. He also deposed that Cheque Ex. PW 1/8 bear his signatures and contended that he had signed blank cheques and handed over the same to respondent's father. He also admitted that receipt Ex. PW 2/2 was in his hand writing and bear his signatures.
8. The bank account of the appellant and the receipts issued by him establish that the amounts detailed in the plaint were received by him. The appellant has failed to lead any concrete evidence that the said amounts were not taken by him or the same were returned. The learned trial court rightly recorded finding against the appellant. General Power of Attorney, Ex. PW 2/1 executed by the respondent in favor of Mr. S.K. Jain, PW 2, authorises him to appear and act, on his behalf in all courts, civil, revenue, criminal to sign, verify the plaint and written statements etc and to do all acts in relation to said matters., We do not find any merit in the submission of the appellant that PW 2 S.K. Jain could not appear for and on behalf of the respondent or could not give evidence.
9. With regard to the interest, it was contended by the learned counsel for the appellant that the receipts merely show that the money was paid to the appellant and they do not contain any recital about the interest or as to when the amount has to be paid back and, thereforee, the requirements of sub-section (1) of Section 3 of the Interest Act, 1978 are not satisfied. Section 3(1) of the Interest Act, 1978 reads as under :-
'In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say -
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then from the date when the debt is payable to the date of institution of the proceedings:
(b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings:
Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings interest shall not be allowed under this section for the period after such repayment.'
10. In order to attract Section 3(1) of the Interest Act it is sufficient that either clause (a) or clause (b) of the Act is satisfied. Both the classes are not required to be satisfied. If clause (a) of the Interest Act is applicable in that eventuality interest will be payable from the date the debt became due. However, if clause (b) is applicable, then the interest becomes payable from the date on which written notice is served claim- ing or demanding interest. In the present case the respondent on 1st May, 1988 sent notice Ex. PW 2/2 to the appellant demanding principal amount along with interest. The suit was filed on 2nd August, 1988. In the absence of a contract the respondent would be entitled to interest 'at the current rate' which is defined in Section 2 of the Interest Act, to mean highest maximum rate at which the interest may be paid on different classes of deposits by the Schedule Banks in accordance with the directions issued to the banking companies generally, by the Reserve Bank of India under the Banking Regulation Act, 1949. thereforee, taking into consideration the definition of the expression current rate of interest as contained in clause (b) of Section 2 of the Interest Act, we are of the view that the respondent is entitled to get interest on the principal sum adjudged at the rate of 12% per annum would be just and proper from the date of demand till the filing of the suit and additional interest at the same rate till the suit was decreed: thereafter at the rate of 6% per annum from the date of decree till realisation under Section 34 Code of Civil Procedure, 1908 as the liability has not arisen out of any commercial transaction.
11. The appeal is thus partly allowed. The judgment and decree of the trial court is modified. The respondent is held entitled to (i) Rs. 48,000/- as principal amount; and (ii) Interest @ 12% per annum from the date of demand i.e. 1.5.1988 till the suit was decreed and @ 6% per annum from the date of decree till realisation on the principal amount Along with proportionate costs throughout.