Pre-suit interest must be calculated at 9% simple interest and added to the decretal principal.

Asianet Satellite Communications Ltd. filed the petition under Sections 14 and 14A of the Telecom Regulatory Authority of India Act, seeking recovery of outstanding carriage fees, pre-suit interest, and further contractual dues from M/s Jeevan Telecasting Corporation Ltd.

By judgment dated 9 August 2023, the Tribunal awarded the Petitioner ₹1,05,68,330 as principal, together with pendente lite and future simple interest at 9% per annum until payment.

Both parties challenged aspects of the decision before the Supreme Court.

The Supreme Court confirmed the principal amount and the award of 9% simple interest for the pendente lite and future periods, while directing the Tribunal to determine the pre-litigation interest payable under Clause 2.2 of the parties’ agreement.

Pursuant to that limited direction, the Petitioner filed a computation claiming pre-suit interest at 9% simple interest, amounting to ₹34,27,555.

The Respondent did not file an independent computation and sought additional time, although the relevant figures and rate of interest had previously been pleaded and contested in the proceedings and appeals.

The Tribunal also considered the Respondent’s earlier admission regarding the balance payable and the Petitioner’s affidavit showing the principal outstanding after payments.

Whether the Tribunal, pursuant to the Supreme Court’s directions, could determine the amount of pre-litigation interest payable under Clause 2.2 of the agreement.

Whether the pre-litigation interest should be calculated at 9% simple interest per annum rather than the contractually stipulated 18% penal rate.

Whether the determined pre-litigation interest was required to be added to the decretal principal for calculation of subsequent pendente lite and future interest.

The Tribunal exercised jurisdiction under Sections 14 and 14A of the TRAI Act in relation to the telecom dispute.

It applied Clause 2.2 of the parties’ agreement, which provided for interest at 18% per annum as penal interest in cases of delayed or staggered payment; however, the Tribunal treated 9% simple interest per annum as the reasonable and equitable rate for pre-litigation interest, consistently with its earlier judgment and the Supreme Court’s directions.

The Tribunal further applied the procedural principles governing civil proceedings, including the requirement that pleadings be proved in accordance with the rules of evidence and that computations remain within the scope of the remand.

The Supreme Court’s appellate order operated as the governing direction limiting the Tribunal’s jurisdiction to computation of pre-suit interest and requiring that such amount be added to the decree for calculation of subsequent interest.

The Tribunal held that the principal award of ₹1,05,68,330 and the 9% rate for pendente lite and future interest had already been affirmed by the Supreme Court and could not be reopened.

The only surviving question was the computation of pre-litigation interest.

Although Clause 2.2 stipulated 18% penal interest, the Tribunal had previously reduced the rate to 9% simple interest as reasonable and equitable, and that approach had been upheld on appeal.

The Petitioner’s computation corresponded with the earlier pleadings, annexures, affidavits, and the Respondent’s admission concerning the amount outstanding.

Since the Respondent failed to produce a contrary computation and the relevant figures had already been contested and adjudicated, the Tribunal accepted the Petitioner’s computation of ₹34,27,555 as pre-suit interest.

In accordance with the Supreme Court’s direction, this amount was added to the principal decree, after which 9% simple interest was made payable on the aggregate amount from the date of filing of the petition until actual payment.

The decree was amended to include: (i) ₹1,05,68,330 towards the principal carriage and placement charges; (ii) ₹34,27,555 towards pre-suit interest; and (iii) pendente lite and future simple interest at 9% per annum on both amounts from the date of filing of the petition until actual payment.

The Respondent was directed to deposit the decretal amount before the Tribunal within two months for payment to the Petitioner, and the amended judgment was declared to form a continuous part of the earlier judgment and decree.