By Dr. K. Shivaram, Ajay R. Singh, Advocates
New Page 1
31 Recovery of interest : Debtor cannot be
penalised with interest on amount that remained unpaid due to accounting
errors : Contract Act S. 72.
The petitioner-company was sanctioned a loan of Rs. 54 lakhs
for setting modern roller flour mill in 1987. On 24-5-2005 from the Branch
Office at Motihari of the respondent corporation from which loan had been
originally disbursed, the petitioner received statements of account showing a
total outstanding of Rs.6,12,361.70. The petitioner on the very same day paid
the entire amount and thereafter requested for being granted a non-dues
certificate. After two months, the petitioner was informed that after
meticulously recalculating the dues of the petitioner, it is found that an
amount of Rs.1,54,966.95 is still due and if the petitioner pays the same amount
by 31-8-2005, non-dues certificate would be issued. Correspondence was then
exchanged with the petitioner protesting that as per accounts furnished, the
total outstanding shown therein was paid by the petitioner, then, on what
account such huge dues were now projected against him. From the head office of
the corporation a letter was issued stating that there was mistake in charging
interest in the loan account in the initial stage. The Court observed that more
than a decade and a half back some accounting errors were committed by the
Corporation of small amount which all put together on recasting the account for
the 20 years with accrued interest was Rs.1.50 lacs. On such wrong accounting
the petitioner was now held liable to pay Rs.1,55,489.95. In other words, due to
Corpn. accounting mistake of about Rs.29,000 made more than a decade and a half
back the petitioner must suffer and pay over Rs.1.50 lakhs as compensation to
the Corpn. for Corporation’s own mistake.
The Court observed that under what law can the petitioner is
made to suffer for a mistake committed not by him but by the Corporation itself.
If such an action is permitted, the result would be that by such a delayed
action the Corporation would gain at expense of the entrepreneur for its own
mistake. Had the Corporation made the demand, the petitioner would have paid and
avoided the heavy interest burden which is sought to be enforced against him
now. This action is wholly arbitrary, unreasonable and unjust enrichment on the
part of the Corporation and cannot be permitted.
The Court relied on the Apex Court decision in the case of
Kusheshwar Prasad Singh v. The State of Bihar, 2007 AIR SCW 1911.
. . . . . It is settled principle of law that a man cannot
be permitted to take undue and unfair advantage of his own wrong to gain
favorable interpretation of law. It is sound principle that he should prevent
a thing from being done and shall not avail himself of the non-performance he
has occasioned. To put it differently ‘a wrongdoer ought not’ be permitted to
make a profit out of his own wrong . . . . . .
[ Radha Flour Mills P. Ltd. & Anr v. Bihar State Financial Corpn. & Ors.,
AIR 2009 Patna 12]
