ALLAHABAD HIGH COURT: SECTION 3(3) OF INTEREST ACT, 1978 INTEREST PAYABLE ONLY ON PRINCIPAL SUM NOT ON INTEREST AWARDED BY COURT

The court in the case observed that Section 34 of the CPC provided maximum interest as 12% per annum on the principal sum. Perusing Section 3(3) of the 1978 Act, the bench headed by Justice Chandra Kumar Rai in the case held that 'interest is payable on the principal sum and not on interest part of the award.'

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NEW DELHI The Allahabad High Court in the case ☐ Uttar Pradesh Avas Evam Vikas Parishad And Another v. State Consumer Disputes Redressal Commission And 2 Others observed and has held that under Section 3(3) of The Interest Act, 1978 interest cannot be imposed on interest award, it is only payable on the principal sum.

The counsel, Advocate Bal Mukund appearing for respondent no. 3 applied for registration in MIG 45/75 type house under Dev Prayagam Scheme of U.P.

Awas Evam Vikas Parishad, Allahabad Rs 20,000 was deposited as registration amount. Thereafter, he won the lottery draw and allotment letter was issued to him with a condition that Rs.1,92,956/- must be deposited upto 31.08.2005 and remaining amount of Rs.2,63,300/- along with interest at the rate of 13% was to be deposited in 120 monthly instalments.