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Issues: (i) whether the appellant was entitled to compensation for alleged wrongful retention of the cheque proceeds; (ii) whether the appellant was entitled to a higher rate of interest on the retained amount.
Issue (i): whether the appellant was entitled to compensation for alleged wrongful retention of the cheque proceeds.
Analysis: The concurrent finding was that the amount was retained pursuant to an understanding authorising the bank to keep it as margin money for a guarantee furnished on behalf of the appellant. The appellant failed to establish that the bank was negligent or that the retention was wrongful. In the absence of proved negligence, no basis existed for awarding compensation for alleged wrongful withholding.
Conclusion: The claim for compensation was rejected and the finding was against the appellant.
Issue (ii): whether the appellant was entitled to a higher rate of interest on the retained amount.
Analysis: Interest under Section 34 of the Code of Civil Procedure, 1908 was held not to apply as such provision was not specifically made applicable to proceedings under the Consumer Protection Act, 1986, though consumer forums could grant interest on equitable grounds. The power to award interest was recognised as a matter of justice, equity and good conscience, and the award of interest was considered justified in the circumstances. Since the appellant had been deprived of the use of the amount for several years, the interest rate of 12% was found inadequate.
Conclusion: The appellant was entitled to interest, and the rate was enhanced to 15% per annum with quarterly rests.
Final Conclusion: The appeal succeeded only to the extent of enhancement of interest, while the claim for compensation for wrongful retention was not accepted.
Ratio Decidendi: Consumer forums may award interest on equitable grounds even where the civil procedure provision on interest is not directly applicable, but compensation for wrongful retention requires proof of negligence or wrongful conduct.
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