REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.2547-2548 OF 1998

STATE OF KARNATAKA & ANR. ....APPELLANTS

VERSUS

GOPAL RAMACHANDRA NADAGOUDA (D) BY LRs. & ANR. .... RESPONDENTS

J U D G M E N T

TARUN CHATTERJEE,J.

1. This is an old litigation carried on  

by the State of Karnataka and the dispute centers  

around a long history of sixty years.  But it is  

unnecessary for this Court, as rightly pointed out  

by  the  High  Court  in  the  impugned  Judgment,  to  

recount the various developments and the manner in  

which the present position has arisen as now it is  

confined  within  a  very  narrow  ambit.   From  the  

arguments advanced by Mr. Sanjay R. Hegde, learned  

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counsel appearing on behalf of State of Karnataka,  

the appellant herein, we only need to consider the  

penultimate  directions  in  the  impugned  order.  

Accordingly, for the proper disposal of the present  

appeals, that portion of the impugned Judgment of  

the High Court may be reproduced as under :-

“The  State  authorities  are  accordingly  directed to deposit the amount in question  in the trial Court within an outer limit  of  three  months  from  today.   The  petitioners would undoubtedly be required  to  pay  the  requisite  court  fees  on  the  amount  in question,  but the  trial Court  will have to take note of the fact that  under normal circumstances, the Court fee  is payable on the date when the suit is  filed or in those of the cases, where for  any reason, the Court fee is directed to  be paid when the decree is passed, then,  it is these two dates that have been taken  into  consideration.   In  this  case,  the  suit  was  filed  in  the  year  1955,  the  decree came to be passed in the year 1957  and it is therefore, on the basis of Court  fees that would have been payable as on  that date, that the petitioners would be  liable.  The Trial Court shall accordingly  this  factor  into  account.   It  shall  be  open to the petitioners to either tender  the Court fee separately or to pray to the  trial  Court  to  adjust  the  same  while  

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releasing  the  payments  to  them.   It  is  made  clear  however,  that  if  the  State  commits  any  default  in  depositing  the  amounts  within  the  prescribed  period  of  time,  which  I  have  deliberately  kept  sufficiently  long, that  in the  event of  any  such  default,  the  State  shall  be  liable to pay interest quantified at the  rate of 15% p.a. to the petitioners from  the date of this order namely, 15.11.1996  upto  the  date  on  which  the  amount  is  actually  tendered  in  Court.”  (Emphasis  supplied)

2. Before us, the only submission that was raised  

by Mr. Sanjay R. Hegde, learned counsel appearing  

for the State of Karnataka is whether the judgment  

of  the  High  Court  directing  the  State  to  pay  

interest at the rate of 15 per cent per annum to  

the respondents from the date of its order i.e. 15th  

of  November,  1996  up  to  the  date  on  which  the  

amount  was  actually  tendered  in  the  Court,  was  

justified.

3. In view of the aforesaid stand taken  

by  the  learned  counsel  appearing  for  the  

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appellants, we need not go into the facts of these  

appeals in detail nor are we concerned with any  

other ground except the ground mentioned earlier.  

On  behalf of the appellants, Mr. Hegde contended  

that in view of the nature of the claim and in view  

of  the  fact  that  the  State  of  Karnataka  had  

diligently pursued these litigations all through,  

it was improper on the part of the High Court to  

hold that the State was liable to pay interest at  

the rate of 15% P.A. as the said rate of interest  

if accepted and if the State is directed to pay it  

to the respondents, would have the effect of nearly  

tripling the decretal amount.  Accordingly, it was  

submitted that the rate of interest may be modified  

to 6% P.A.

4. On the question of rate of interest,  

we  have  also  heard  Mr.  S.K.  Kulkarni,  learned  

counsel  appearing  for  the  respondents,  who  duly  

contested the submission of Mr. Hegde.  According  

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to him, the High Court in its discretion was fully  

justified in granting interest at the rate of 15%  

P.A.  from  the  date  mentioned  in  the  impugned  

judgment.   It  was  further  submitted  by  Mr.  

Kulkarni, learned counsel appearing on behalf of  

the respondent, that the entire litigation carried  

on  by  the  State  against  the  respondent  was  

fictitious and therefore, it was justified for the  

High Court to award interest at the rate mentioned  

above.  Mr. Kulkarni further submitted that in view  

of  the  admitted  facts  of  the  present  case,  the  

question of reducing the interest from 15% to 6%  

does not arise at all.  Accordingly, he submitted  

that the appeals shall be dismissed with exemplary  

costs in favour of the respondents.       

5. Having  heard  the  learned  counsel  

appearing for the parties and after going through  

the  impugned  judgment  and  the  directions  to  the  

State  to  pay  interest  at  the  rate  of  15%  P.A.  

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w.e.f. 15th of November, 1996, we are of the view  

that the impugned judgment of the High Court may be  

modified to the extent that the respondents be paid  

interest at the rate of 10 per cent per annum and  

not 15 per cent from the date mentioned in the  

impugned judgment of the High Court.  Accordingly,  

we  dispose  of  these  appeals  with  the  above  

modification  and  we  further  direct  that  in  the  

event, the amount, as directed above, is not paid  

by the State within six months from the date of  

supply  of  a  copy  of  this  order  to  it  by  the  

respondents,  the  State  shall  be  liable  to  pay  

interest at the rate of 15 per cent per annum as  

directed by the High Court.   

6. With this modification, these appeals  

are disposed of with no order as to costs.

..................J. [TARUN CHATTERJEE]         

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NEW DELHI       ..................J. JANUARY 05,2010. [AFTAB ALAM]  

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