Report No. 55
18. Shri Raghavachari's dissenting note.-
One of the dissenting notes in the Report of the Joint Committee, stated1:-
"Clauses 2 and 3:-The idea behind the principle of no interest on interest accrued prior to the date of suit and during its pendency and even after the decree as well even on the costs decreed is not in consonance with the actual prevalent practice in the world of trade and commerce. The argument that there is no agreement for payment of interest or that litigation is not to be a business does not impress me. This idea appears to be conceived in a spirit of denying a just right to the creditor to benefit a debtor. It is very likely to bring about a serious shrinkage of credit facilities now largely supplied by private agencies in the absence of adequate Government or other institutional agencies particularly in rural areas. It is also opposed to the principle that money found due and not paid should carry interest by way of damages.
Further, the costs decreed are often only a part of what is actually incurred by a party. Greater part of it is paid as court fees at the time of the institution of the suit. The other part consists of stamp and process fees and cash batta paid as well as other taxable sums. The decree that comes long after, only makes it payable. There is enormous time that further intervenes before its realisation, the law itself providing a period of twelve years for such realisation. Again, most of the plaintiffs are not professional money lenders. These creditors are themselves often compelled to borrow elsewhere on interest to meet the initial costs of filing the suit. Under these circumstances, I feel these provisions are not only unjust but will work serious hardship both on the creditors and debtors.
I would have the discretion vested in the Courts to grant interest in appropriate cases rather than deny it altogether."
1. Dissenting note of Shri K.S. Raghvachari: Report of the Joint Committee on the C.P.C. Amendment Bill, 1955, pp. x-xi.