Appellate Court Can Enhance Interest Rate On Award Under Order 41 Rule 33 CPC Even Without Cross-Objection By Plaintiff: Bombay High Court

The Bombay High Court has held that a First Appellate Court is empowered under Order XLI Rule 33 of the Code of Civil Procedure, 1908, to enhance the rate of interest awarded by the trial court even in the absence of an appeal or cross-objection by the plaintiff. The Court observed that where the issue under Order 41 Rule 33 is specifically raised before the appellate court, the parties are heard, and the court consciously exercises its jurisdiction under Order XLI Rule 33, such exercise of power is legally sustainable.

Justice Sandesh D. Patil was hearing a second appeal filed by the defendant challenging the concurrent decrees passed by the Trial Court and the District Judge in a suit for recovery of money. The plaintiff had instituted the suit for recovery of Rs.3,05,045/- along with interest, relying upon an agreement dated 01.04.1993 under which the defendant had agreed to pay interest at the rate of 18% per annum and had subsequently issued a balance confirmation letter in 1999. The Trial Court decreed the suit but awarded interest at the rate of 15% per annum. In the defendant's first appeal, the District Judge dismissed the appeal but enhanced the rate of interest to 18% per annum. Aggrieved thereby, the defendant preferred the present second appeal.

The Court rejected the challenge to the testimony of the power-of-attorney holder. Referring to the Supreme Court's decision in Man Kaur (Dead) by LRs v. Hartar Singh Sangha [(2010) 10 SCC 512], it observed that the evidence of a power-of-attorney holder is inadmissible only where such holder has no personal knowledge of the relevant facts. In the present case, both the courts below had concurrently found that the power-of-attorney holder possessed personal knowledge of the transactions. The Court also upheld the concurrent finding that the suit was within the limitation.

On the issue of enhancement of interest, the Court observed that the First Appellate Court had specifically framed a point for determination regarding the agreed rate of interest, and the respondent had expressly requested the Court to exercise its powers under Order XLI Rule 33 CPC. Both parties were afforded an opportunity to address the issue before the appellate court.

The Court further held that the wide language of Order XLI Rule 33 empowers the appellate court to grant appropriate relief even in favour of a respondent who has not filed a cross-objection, where the facts of the case so require.

“… the Court consciously exercised its powers under Order XLI Rule 33 of the Code of Civil Procedure, 1908. The Respondent had specifically invited the Court to exercise such power, the point for determination was duly framed, and both parties were heard on the question. Therefore, the exercise of such power cannot be said to be arbitrary or perverse,” the Court observed.

Finding no perversity in the concurrent findings of the courts below and holding that no substantial question of law arose for consideration under Section 100 CPC, the Court dismissed the second appeal with costs.

Case Title: Rameshkumar Hanjarimal Rathod v. Smt. Kantabai Lalchand Gandhi [Second Appeal No. 47 of 2017]

Citation: 2026 LiveLaw (Bom) 316

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