I.K. Merchants Pvt. Ltd. & Ors. Vs State of Rajasthan & Ors. (Supreme Court of India)
Supreme Court held that in the absence of any agreement or contract provisions of Section 34 of the Code of Civil Procedure empowers court to determine appropriate interest rate. Accordingly, interest determined @6% per annum till date of decree and 9% per annum till date of realization on enhanced value to shares.
Facts- These appeals are filed against the judgments and orders dated 26.04.2022 and 02.05.2022 both passed by the Division Bench of Calcutta High Court in G.A.No.6 of 2020 and A.P.D. No.63 of 2013 in C.S.No.467 of 1978. Vide order dated 26.04.2022, the High Court, while upholding and reaffirming the valuation of shares done by M/s. Ray & Ray at Rs.640/- per share, granted simple interest at 6% per annum on the enhanced valuation of shares, however, rejected the prayer of the appellants for enhancement of interest rates, costs and damages, and accordingly, disposed of the said cases. Subsequently, vide order dated 02.05.2022, the High Court corrected the rate of interest from 6% to 5% per annum. Both the orders are assailed in these appeals, at the instance of the appellants herein.
Conclusions- Held that there was no agreement between the parties relating to grant of interest for the delayed payment. Even the exchange of communications between the parties remains silent on this aspect. In the absence of any agreement or contract, the provisions of Section 34 of the Code of Civil Procedure dealing with ‘interest’ would come into play.
