RAMACHANDRA LAXMAN DODDAMANI v. SYNDICATE BANK — 1991 DIGILAW 538 (KAR)

SWAMI, J. ( 1 ) THIS appeal is preferred against the Judgment and decree dated 18-10-1983 passed by the learned Principal Civil Judge, Belgaum in O. S. No. 24/1979. ( 2 ) THE respondent/plaintiff filed the aforesaid suit for recovery of a sum of Rs. 2,33,752. 10 with future interest at 15% p. a. on the aforesaid sum. ( 3 ) THE trial Court has decreed the suit of the plaintiff for a sum of Rs. 1,26,560. 93with future interest at 15% p. a. from 22-10-1981 the date on which the plaintiff-Bank received the compensation amount under the Karnataka Contract carriages (Acquisition) Act, 1976 (hereinafter referred to as 'the Act' ). ( 4 ) IT is contended on behalf of the appellants by learned counsel Sri A. V. Albalthat the very basis of the amount arrived at by the trial Court is not correct; that at any rate in the light of the Karnalaka Act 17/1990, the decree is required to be modified. The correctness of these contentions is disputed by Sri Kamath, learned counsel for the plaintiff-Bank. It is contended by Sri Kamath that the suit as decreed by the trial Court is in accordance with law. ( 5 ) IN the light of the aforesaid contentions, the following points arise for consideration:1) What is the effect of sub-section (4) of Section 11 of the Act which has been inserted by Karnataka Act 17/1990 with retrospective effect from the date the Act came into force? 2) What was the amount due by the defendants to the plaintiff on the date of the Act came into force? 3) Whether the decree passed by the trial Court for a sum of Rs. 1,26,560,93 with costs and interest at 15% from 22-10-1981 is justified in law? ( 6 ) POINT No. 1: The Act came into force on 30th January, 1976. The contractcarriage vehicle bearing Registration No. MYA 8784 hypothecated to the plaintiff-Bank for the suit loan advanced to the defendants, was acquired by the state Government under the Act on 30-1-1976 itself, and from that date it came to be vested in the State Government. The Act provides for determination of the amount for the acquired vehicle and manner of payment of such amount. Sub-section (4) of Section 11 came to be inserted by Karnataka Act 17/1990 with retrospective effect from 30-1-1976. The said sub-section reads thus:"section 11 (4 ). The Act provides for determination of the amount for the acquired vehicle and manner of payment of such amount. Sub-section (4) of Section 11 came to be inserted by Karnataka Act 17/1990 with retrospective effect from 30-1-1976. The said sub-section reads thus:"section 11 (4 ). The amount deducted under clause (iii) of sub-section (3) of Section 10 shall be paid in cash in one lumpsum to the secured creditors with interest at the rate of six per cent per annum from the date of vesting of the acquired property in the Government to the date of payment and on such payment, the secured creditor shall have no right to claim from the contract carriage operator any more amount by way of interest on such amount. " the interest at the rate of 6% per annum came to be enhanced to 12% with retrospective effect from 30-1-1976 by Karnataka Act No. 25/1991. A close reading of the aforesaid sub-section (4) of Section 11 of the Act makes it clear that the secured credilor-the plaintiff is not entitled to claim interest on the amount payable towards the acquired properly vesting in the Stale Government i. e. , the contract carriage, at the contractual rate from the dale of vesting, till the date of payment of the amount, but would be cnlilled to interest only at 12% per annum from the date of vesting till the dale of payment of the amount. The amount referred to in the aforesaid sub-section (4) of Section 11 of the Act is the amount that is payable to the secured creditor towards the conlract carriage acquired under ihc act and vesting in the State Government. The amount referred to in the aforesaid sub-section (4) of Section 11 of the Act is the amount that is payable to the secured creditor towards the conlract carriage acquired under ihc act and vesting in the State Government. The words "inlerest at the rate of 12% per annum from the dale of vesting of the acquired property in the Government to the date of payment", read with the words "and on such payment the secured creditor shall have no right to claim from ihe conlract carriage operator any more amount by way of interest on such amount" make it clear that the secured creditor would be entitled lo claim interest at the rale of 12% per annum on the amount determined as payable to the secured creditor for the acquired vehicle vesting in the Slate government at 12% from the date of vesting lill ihe dale of payment of the amount and he would not be enlitled to claim any more amouni by way of inleresl on the amount determined as payable towards the acquired vehicle to the secured creditor irrespective of the contractual rale of interest. Thus, the contractual rate of interest from the date of vesting till the dale of paymenl of the amount determined as payable to the secured creditor towards the acquired vehicle vesling in the State government, has been modified by the legislature by inserting sub-section (4) in section 11 of the Act. Therefore, the plaintiff-the secured creditor shall have to calculate interest on the amount determined as payable to it under the Act from the dale of vesting till the dale of its payment only at 12%. Of course, if the amouni payable towards the acquired vehicle vesting in the State Government to the secured creditor is less than the amount due by the defendants to the plaintiff on the date of vesting, on the excess amouni the plaintiff would be enlilled to claim interest at the contractual rate till the date of filing of the suit. In other words, the conlract would be operating in respect of lhat amount, as such excess amount is not covered by sub-section (4) of Section 11 of the Act. Therefore, it follows that the claim as made by the plaintiff in the plaint requires to be modified because in the plaint the plaintiff has calculated the interest at 17. In other words, the conlract would be operating in respect of lhat amount, as such excess amount is not covered by sub-section (4) of Section 11 of the Act. Therefore, it follows that the claim as made by the plaintiff in the plaint requires to be modified because in the plaint the plaintiff has calculated the interest at 17. 5% from the date of advancing the loan lill the date of filing of the suit. Accordingly, Point No. 1 is answered as follows: "sub-section (4) of Section 11 of the Act modifies the contractual rate of interest and fixes the interest al 12% per annum from 30-1-1976 on the amouni determined as payable to the secured credilor lowards the acquired vehicle vesling in the State Government till the dale of paymenl of such amount. Therefore, the secured creditor like the plaintiff is not entitled to claim any more amount by way of inleresl on such amount i. e. , the amouni delermined as payable to the secured credilor towards the acquired vehicle vesting in the government from 30-1-1976 till payment". ( 7 ) On 18-11-1975 loan advanced . 1,50,000-00 On 23-12-1975 insurance . . premium paid 487-50 1,50,487-50 On 27-12-1975 amount . . received 588-00 1,49,899-50 Interest calculated . . at 17. 5% on Rs. 1,49,899. 50 . . from 18-11-1975 to 30-1-1976 5,201-67 1,55,100-67 Less instalment received . . on 21-1-1976 10,000-00 10,000-00 . . 1,45,100-67 ( 8 ) FROM the order of the Deputy Commissioner, Bijapur, dated 27-6-1982hearing No. MVT. SR. 18/76 (24), it is clear that a sum of Rs. 1,73,200/- was determined as the amount payable to the secured creditor - the plaintiff towards the acquired vehicle plus interest. This amount i. e. , Rs. 1,73,200/- plus interest at 6% amounting to Rs. 31,591. 03, total Rs. 2,04,791. 03 was paid to the plaintiff on 22-10-1981. Thus, the amount due from the defendants to the plaintiff as on 30-1-1976 was less than the amount determined as payable towards the acquired vehicle. Therefore, in the light of the provisions contained in sub-section (4) of section 11 of the Act, the plaintiff was entitled to claim interest on a sum of Rs. 1,45,100. 67 at the rate of 12% per annum from 31-1-1976 to 22-10-1981. The interest so calculated, as submitted by both sides, was to the tune of Rs. 99,749. 75. Therefore, in the light of the provisions contained in sub-section (4) of section 11 of the Act, the plaintiff was entitled to claim interest on a sum of Rs. 1,45,100. 67 at the rate of 12% per annum from 31-1-1976 to 22-10-1981. The interest so calculated, as submitted by both sides, was to the tune of Rs. 99,749. 75. Thus, as on the date of payment of the amount the total amount due to the plaintiff-Bank from the defendants was Rs. 2,44,850. 42 ps. (i. e. , Rs. 1,45,100. 67 plus interest of Rs. 99,749. 75 ). Out of this amount, as already pointed out, the plaintiff was paid on 22-10-1981 a sum of Rs. 2,04,791. 03/- on calculating the interest at 6% on the amount of Rs. 1,73,200/- from 30-1-1976 till payment. After deducting the said amount in the sum of Rs. 2,44,850. 42, the balance remaining as on 22-10-1981 was in a sum of Rs. 40,059. 39. It may be relevant to notice, as per sub-section (4) of Section 11 of the Act, the plaintiff would be entitled to interest at 12%, whereas it has been paid interest at 6%. Therefore, it would be entitled to a further interest at the rate of 6% per annum on Rs. 1,45,100. 67 from 31-1-1976 to 22-10-1981, as the Act has been amended enhancing the rate of interest from 6% to 12% with effect from 30-l-1976. The interest so calculated, as per the submission made on both sides, was to the tune of Rs. 40,059. 39. Whereas the further interest at 6% per annum payable on the sum of Rs. 1,73,200/-, as per the submission made by both sides from 1-2-1976 to 22-10-1981, would come to Rs. 50,853. 43. Whereas the plaintiff would be entitled to recover only a sum of Rs. 40,059. 39. If that be so, there cannot be any decree against the defendants because the plaintiff would be entitled to recover Rs. 40,059. 39 from the State Government. But to enable the plaintiff to recover the said amount there shall have to be a decree in its favour for recovery of the balance of Rs. 40,059. 39 from the Stale Government as per sub-section (4) of Section 11 of the Act after adjusting the amount of Rs. 2,04,791. 03/- already paid to the plaintiff. But to enable the plaintiff to recover the said amount there shall have to be a decree in its favour for recovery of the balance of Rs. 40,059. 39 from the Stale Government as per sub-section (4) of Section 11 of the Act after adjusting the amount of Rs. 2,04,791. 03/- already paid to the plaintiff. Thus, having regard to the provisions contained in sub-section (4) of Section 11 of the Act which are given retrospective effect from 30-1-1976, the decree passed by the trial Court requires to be modified. Accordingly, Point Nos. 2 and 3 are answered as follows: "on 30-1-1976 the amount due from the defendants to the plaintiff was in a sum of Rs. 1,45,100. 67 ps. "the decree of the trial Court in the light of the provisions contained in sub-section (4) of Section 11 of the Act is not sustainable in law and it requires to be modified as indicated above. " ( 9 ) FOR the reasons slated above, this appeal is allowed in part. The Judgment anddecree of the trial Court are modified. It is ordered and decreed that as the plaintiff has already been paid a sum of Rs. 2,04,791. 03 on 22-10-1981, it would be entitled to recover the balance amount of Rs. 40,059. 39 from the State Government in terms of sub-section (4) of Section 11 of the Act. As far as the appellants are concerned, the loan stands discharged. In the facts and circumstances of the case, there will be no order as to costs in this appeal. However, the costs awarded by the trial Court are not disturbed. --- *** --- .