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Report No. 55

37. Discretion dependent on circumstances.-

As regards the amendment proposed in section 34, we may repeat that even under the amended section, the discretion will be exercised after due regard to the circumstances. Every debt is not necessarily a loan,1 and the circumstances in which a claim for interest may come up for consideration vary from case to case. This variation is, in most cases, attributable to the difference as regards one or more of the following circumstances:-

(a) Financial capacity of the judgment-debtor (e.g. the judgment-debtor may have the means to pay and yet fails to pay);

(b) Financial position of the decree-holder;

(c) Comparison between (a) and (b) above;

(d) Conduct of the parties, e.g. dishonest transfer of property by the judgment debtor after or in anticipation of the litigation, or inordinate delay in taking steps necessary for progress of the litigation;2-3

(e) Relationship which gave rise to the liability sued upon, e.g. the judgment debtor standing in a fiduciary capacity towards the decree-holder;

(f) Nature of the monetary liability.4

1. See (a) Sujan Singh v. Ramachandrarao, AIR 1949 Nag 104 (106), para. 6 (reviews cases); (b) Saradindu v. Lalit Mohan, AIR 1941 Cal 538..

2. Bhagwant v. Gangabesain, AIR 1940 Bom 369 (377).

3. The cases cited do not necessarily relate to interest for the post-decree period. They are referred to only to show the variety of situations met within real life.

4. Para. 38, infra.

Rate of Interest for the Period after Decree and Interest on Costs Under Sections 34 and 35 of the Code of Civil Procedure, 1908 Back

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