Tomorrowland Limited vs Housing and Urban Development Corporation Limited 2025 INSC 207 - S 34 CPC - Award Of Interest - Contract - Equity - Commercial Disputes

Code of Civil Procedure 1908 - Section 34 - The award of interest is a discretionary exercise steeped in equitable considerations - The power to award interest ought to be exercised judiciously, aligning with equitable considerations and also ensuring neither undue enrichment nor unfair deprivation. Courts are duty-bound to assess the facts and circumstances of each case, applying the principles of fairness and justice. This discretion must reflect a balanced approach, grounded in reason, and guided by the overarching objective of equity. (Para 49-50)

Contract Law - A commercial document ought not to be interpreted in a manner that arrives at a complete variance with what may originally have been the intention of the parties. (Para 47) 

Equity - Whosoever comes to the court claiming equity, must come with clean hands. The expression ‘clean hands’ connotes that the suitor or the defendant have not concealed material facts from the court and there is no attempt by them to secure illegitimate gains. Any contrary conduct must warrant turning down relief to such a party, owing to it not acting in good faith and beguiling the court with a view to secure undue gain. A court of law cannot be the abettor of inequity by siding with the party approaching it with unclean hands. This also brings to mind the oft-quoted legal maxim—he who seeks equity must do equity

Commercial Disputes - In commercial disputes, the award of interest pendente lite or post- decree is typically granted as a matter of course. This is because such interest serves to compensate the aggrieved party for the time value of money that was due but withheld during the legal process. It reflects an established norm aimed at ensuring fairness and equity in commercial transactions. (Para 58)