Pragati Builders & Promoters vs M/S Ram Murty Pyara Lal & Ors.Etc.
- SCC(2016) 13 SCC 293
- Neutral2016 INSC 309
Ratio decidendi
The rule this decision rests on
Where an auction purchaser has paid money for property and a bank has retained that amount, the court may award the purchaser simple interest on the principal amount at a rate reflecting the benefit the bank would have derived from holding the funds, with the borrower liable for any interest above the rate the bank itself earns on the retained amount (calculated as 2% above bank rate), so that the borrower bears the cost of delay while the bank covers its own earnings from the retained funds.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Versus M/s Ram Murty Pyara Lal & Ors., etc. … Respondent(s)
WITH
CIVIL APPEAL NOS.2611-2612 OF 2012
JUDGMENT
ANIL R. DAVE, J.
1. Leave granted.
2. Application for substitution is allowed.
3. Heard the learned counsel for the parties and perused the RANI BHARDWAJ
impugned judgment.
2 4. Looking at the facts of the case, in our opinion, the amount of interest awarded by the High Court to the appellants is on lower side. We, therefore, direct that instead of simple interest at the rate of 6 per cent per annum, the appellants should be paid simple interest at the rate of 15 per cent per annum from the date on which the appellants had paid the amount for purchase of the property in question to the respondent bank.
5. The respondent bank shall calculate the amount of interest payable to the appellants at the rate of 15 per cent per annum as on today and shall indicate the same to the appellants and other respondents. The amount of interest so calculated shall be paid to the appellants. The respondent bank has retained the amount received from the appellants, the auction purchasers and therefore, on the said amount, the bank is presumed to have earned interest. We presume that the bank has earned interest on the said amount, which is quantified at 2 per cent above the bank rate prevailing at the relevant time. So, on the said amount, interest calculated at the above rate shall be paid by the bank and the balance amount of interest shall be 3 recovered from the respondent-borrower so as to see that the total amount of interest paid to the appellants comes to 15 per cent per annum.
6. The bank shall calculate the amount of difference payable by the respondent-borrower and convey the same to the borrower and the borrower shall pay the said amount within four months from today along with further amount of interest at the differential rate payable by him till the date of payment of the entire amount.
7. The bank shall pay the amount of interest at the rate of 15 per cent per annum to the appellants within two months from today along with the amount of auction price paid by the appellants and the appellants shall be paid interest till the date on which they are paid the auction price and interest thereon.
8. Upon receipt of the auction price and interest thereon, the appellants shall return all documents of title to the bank and the bank shall return the same to the borrower when the borrower pays his share of interest to the bank.
4 9. Except the aforestated change in the rate of interest, we do not modify the impugned judgment and if the amount of interest is not paid by the borrower, the consequences which might have been stated in the impugned judgment would follow.
10. The appeals stand disposed of as allowed in above terms with no order as to costs.
CIVIL APPEAL NOS.2611-2612 OF 2012
11. Learned counsel submitted that in view of the disposal of the above appeals, these appeals have become infructuous and the same are dismissed as such.
…………………………J.
(Anil R. Dave)
…………………………J.
(Adarsh Kumar Goel)
New Delhi
APRIL 12, 2016.
5
ITEM NO.18 COURT NO.2 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition for Special Leave to Appeal (C) Nos.23923-23924/2012 (Arising out of impugned final judgment and order dated 03/07/2012 in WP No. 4441/2011 and WP No. 4954/2011 passed by the High Court of Delhi at New Delhi)
PRAGATI BUILDERS & PROMOTERS & ORS. Petitioner(s)
VERSUS
M/S RAM MURTY PYARA LAL & ORS.ETC. Respondent(s)
(With appln.for substitution for bringing on record the Lrs of deceased petitioner and interim relief and office report)
(FOR FINAL DISPOSAL)
AND
(C.A.NO.2611-2612/2012)
Date : 12/04/2016 These petitions were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE ANIL R. DAVE
HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
For Petitioner(s) Mr. C. S. N. Mohan Rao,Adv.
Mr. Lokesh Kumar Sharma, Adv.
For Respondent(s) Mr. Dhruv Mehta, Sr.Adv.
Mr. Rohit K. Nagpal, Adv.
Mr. Puneet, Adv.
Mr. Narender Singh, Adv.
Dr. S. K. Verma,Adv.
Md. Shahid Anwar,Adv.
Mr. Debasis Misra,Adv.
Mr. Jaswinder Singh, Adv.
Mr. Niraj Jha, Adv.
Mr. Nikilesh Ramachandran,Adv.
6 UPON hearing the counsel the Court made the following
O R D E R
Substitution allowed.
Leave granted.
The appeals are disposed of with no order as to costs.
C.A.Nos.2611-2612 of 2012:
In view of the disposal of the appeals arising out of SLP(C) Nos.23923-23924/2012, these appeals have become infructuous and the same are also disposed of as infructuous.
(USHA BHARDWAJ) (SNEH BALA MEHRA)
AR-CUM-PS ASSISTNT REGISTRAR
Signed non-reportable judgment is placed on the file.
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