Top News Headlines 30th Mar 2022: Alteration Of Rate Of Interest Can Be Done On Equitable Grounds

Alteration Of Rate Of Interest Can Be Done On Equitable Grounds: Andhra Pradesh HC

• The Hon’ble Andhra Pradesh HC has held, in A. Satyanarayana vs M. Panduranga Rao that where the rate of interest is fixed in a contract, it will be open to the Court to vary the rate of interest from the date of the suit till the date of recovery of the amount, on the grounds of equity. 
• In the instant case, the first defendant and his wife had borrowed a sum of Rs.90,000 from the plaintiff in the year 1992. This principal sum had to be repaid with an yearly interest of 30% p.a. As a security, the defendants had created a mortgage in favour of the  plaintiff on the plaint property. It was alleged that after a part payment, the defendants had defaulted in the repayment of the debt. 
• The first defendant then sold the mortgaged property to the second defendant. However, the second defendant did not make any payment despite the plaintiff having approached him for receiving the said payment. Since the defendant paid the amount due to him, the plaintiff filed a suit for the recovery of Rs.2,63,832/- with a subsequent interest of 30%.
• The defendants had alleged before the Court that since the plaintiff had insisted for the payment of interest at the rate of 30% from the date of the mortgage, the debt could not be cleared. It was also alleged that interest at the rate of 30% cannot be claimed as the suit property is agricultural land, thus, the plaintiff could not claim more than 18% interest. 
• The trial Court had passed a preliminary decree in favour of the plaintiff, and thus, the defendants had preferred an appeal. 
• The HC observed that in the case of Jagannath Prasad Singh vs Surajmal Jalal AIR 1927 PC, the Privy Council had held that the rate of interest fixed in a contract  cannot be altered as long as it remains within the domain of the contract law. However, once a decree is passed, the matter moves out of the domain of the contract law to that of the judgement. The Court also observed that the rights of the mortgagee will then depend, not on the contents of the bond, but on the directions in the decree. Thus, it was noted that the Court can alter the rate of interest from the date of redemption onwards.
• The HC also observed that after the aforesaid judgement was delivered, a new Rule 11 was added in Order 34 of CPC. Citing this addition, the Federal Court had observed in Jaigobind Singh and ors. vs Lakshmi Narain Ram and ors. AIR 1940 FC that a bare reading of Order 34 Rule 11 would show that it provides that the Court may order payment of interest to the mortgagee upto the date fixed for the payment at the rate payable on the principal. It was also observed that this rule gave a certain amount of discretion to the Court as regards the payment of subsequent interest. It was no longer obligatory on the Courts to decree the interest at the contractual rate upto the date of redemption. 
• This judgement was affirmed by the Apex Court in the case of Soli Pestonji Majoo and ors. vs. Gangadhar Khomka AIR 1969 SC . The High Court also observed that in the case of Sri Panduranga Traders vs State Bank of India (2003) ALD the Andhra Pradesh HC had held that the Court had held that the Court has discretion to modulate the interest pendente lite and post decree. 
• Thus, the HC held that in light of the above decisions, it becomes clear that even in cases in which the rate of interest had been fixed via a contract, it would be open to the Court to vary the rate of contractual interest from the date of the suit till the date of recovery of the amount. 
• Thus, the Court modified the order of the lower Court and awarded interest calculable at the rate of 14%pa, from the date of filing of the suit till the payment. 

Holding Public Meeting In Violation Of MCC, Sec. 144 Leads To Formation Of Unlawful Assembly: Jharkhand HC

• In Amitabh Choudhary v. The State of Jharkhand and another (2019), the Bench of Justice Anubha Rawat Choudhary upheld charges against Amitabh Choudhary (petitioner), former IPS Officer, under Section 143 of IPC by stating that following the implementation of the Model Code of Conduct and the issuance of prohibitory decree under Section 144 CrPC, the common objective of having a public political meeting by an election candidate would prima facie result in the formation of an unlawful assembly and act in violation of the prohibitory decree issued under Section 144 CrPC.
• In this case, the petitioner had carried out a political meeting without acquiring any preliminary authorization and had breached the Model Code of Conduct by giving an unauthorized political speech. He was thus charged under Sections 126(1)(a) of the Representation of People Act (1951), 143, and 188 of the IPC. Therefore, the petitioner pleaded under section 483 CrPC to quash the order passed by the Judicial Magistrate in relation to the aforementioned offenses.
• Section 126(1) of the RP Act (1951) states that no individual must hold any public gathering or procession in connection with an election, either directly or indirectly.
• Section 143 IPC states that anybody who is a member of an unlawful assembly would face imprisonment of any kind for a time that can last up to six months, a fine, or both.
• Section 144 of the CRPC authorizes the Executive Magistrate of any state or territory to issue an order restricting the gathering of four or more people in a particular place. Those who participate in the 'illegal assembly' may also be charged with rioting.
• Section 188 of the IPC deals with noncompliance to an order validly proclaimed by a public officer. Pashupati Kumar vs. State of Bihar 2019 SCC Online Patna 654, Thanuskodi and Another vs. Inspector of Police and Another 2019 SCC Online Madras 35292 and Dharmesh Prasad Verma vs. State of Bihar 2016 SCC Online Patna 3622 are some instances that demonstrate the application of this section. These cases were also mentioned in this particular case.
• Section 483 of the Civil Procedure Code establishes the High Court's duty to continuously supervise Judicial Magistrates' courts.
• Section 195 (1) (a) of the CrPC states unequivocally that a Court is incompetent to take cognizance of any infraction punishable under Sections 172 to 188 of the IPC unless the relevant public worker files a written complaint. The same was observed in C. Muniappan v. State of TN (2010) 9 SCC 567.
• The Hon'ble Court in light of the aforementioned cases and sections observed that there was no impediment to establishing the FIR in the present case. However, because cognizance of the offense under Section 188 Indian Penal Code was not taken on a complaint, the order taking cognizance under Section 188 Indian Penal Code cannot be sustained in the eyes of the law on technical grounds as the same did not align with the provisions of Section 195(1)(a) of CrPC. 
• Furthermore, the Court contended that the charge under Section 143 of the IPC was made out against the petitioner in light of the claims and documents gathered during the inquiry hence the order taking cognizance of the offense under Section 143 IPC was sustained. 
• Finally, regarding the charge under Section 126 of the Representation of People Act, the Court held that because the incident occurred more than 48 hours after the election, the stipulation for establishing an offense under Section 126(1)(a) of the Representation of People Act, 1951 was not satisfied. Therefore, resulting in the Judicial Magistrate, Ranchi's impugned order to be set aside.
• Therefore, the Hon'ble HC of Jharkhand authorized the criminal miscellaneous petition to be partially qualified.