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1997 DIGILAW 259 (HP)

STATE BANK OF INDIA v. SHIVA SHAKTI ALLOYS (P) LTD.

1997-06-27

LOKESHWAR SINGH PANTA, SURINDER SARUP

body1997
JUDGMENT Surinder Sarup, J —This appeal has been filed by the State Bank of India against the judgment of the learned Single Judge of this Court dated 9-4-1985, passed in Civil Suit No. 92 of 1983. As a result of the same, a decree for a sum of 12,22,08.97 P. has been passed against the defendants alongwith interest at the rate of 12% per annum from the date of suit till realisation on the principal amount of Rs. 11,50,000. 2. The grievance in this appeal is that notwithstanding the statements made by the learned Counsel for the parties at that time, the learned Single Judge passed the decree without conforming to the provisions of Order 34 Rules 3, 4 and 5 by not granting compound interest at the rate of 18% per annum. 3. We have heard the learned Counsel for the parties It has been strenuously argued by Ms Pratima Malhotra, learned Counsel for the plaintiff-appellant that in view of the prayer clause in the appeal as also the statements of the learned Counsel for the parties, it was incumbent on the learned Single Judge to grant interest as provided under Order 34 Rules 3, 4 and 5, C.P.C. The prayer clause in the suit was as follows : "The plaintiff-bank, therefore, prays that a decree for Rs. 12,22,083 97 be passed in favour of the plaintiff alongwith future interest at the rate of 18 per cent per annum with costs against the defendants fixing a reasonable time for the payment of the same and on failure to pay the amount, a final decree under Order 34 of the Code of Civil Procedure mentioned in paragraph 8 supra of the plaint be passed in favour of the plaintiff and in case the sale proceeds are found insufficient to satisfy the decree, the plaintiff be held entitled to recover the amount from the person and other properties of the defendants. The plaintiff be also allowed such other relief which the Court, in the facts and circumstance of the case, deem fit and proper," 4. The statements of the learned Counsel for the parties were as follows : Statement made by Shri Kailash Chand and Shri Devinder Gupta, Advocates, Counsel for the defendants. "The defendants admit the claim of the plaintiff in toto. A decree for Rs. The statements of the learned Counsel for the parties were as follows : Statement made by Shri Kailash Chand and Shri Devinder Gupta, Advocates, Counsel for the defendants. "The defendants admit the claim of the plaintiff in toto. A decree for Rs. 12,22,08.97 with costs as prayed may please be passed in favour of the plaintiff and against the defendants........... The defendants give an unconditional undertaking to the Court that they will not in any manner transfer or encumber or even lease out the land, building and machinery comprising of the factory of defendants No. 1 or any part of the property mortgaged with the plaintiff by defendants No. 3, 4 and 6 to secure the amount in suit without the prior permission of the Court till the entire decree is satisfied......................." Statement made by Shri K.D. Sood, Counsel for the plaintiff. "I have heard the above statement of the counsel for the defendants........ The defendants may further be ordered to pay the future interest from the date of suit till realisation............... 5. The position being as stated above, it was incumbent on the learned Single Judge to allow future interest, as prayed in the suit. However, perusal of the impugned judgment shows that future interest at the rate of 12% per annum from the date of the suit till realisation has been granted. 6. In order to meet the argument of the learned Counsel for the plaintiff-appellant, the learned Counsel for the defendant has cited Gupta Steel Industries v Holly Steel Industries Pvt. Ltd., (1996)11 SCC 678. It has been laid down therein that the compromise decree passed under Order 23 Rule 3, C.P.C., cannot be interfered with or modified by a Court unless parties agree to the same. It has been laid down therein that the compromise decree passed under Order 23 Rule 3, C.P.C., cannot be interfered with or modified by a Court unless parties agree to the same. This ruling is, however, distinguishable on the short ground that what the plaintiff-appellant is praying for is not for sitting aside or modifying the decree passed by the learned Single Judge but to amplify the same in accordance with the prayer clause in the suit and the statements made by the learned Counsel for the parties before the learned Single Judge, Consequently, this ruling of the Apex Court goes against the defendants in the facts and circumstances of the present case The second argument, which has been addressed by Ms Pratima Malhotra is that by a subsequent order passed in OPM No 80 of 1985 in Civil suit No. 92 of 1983 on 18-4-1985, it was ordered by the learned Single Judge as follows : “The decretal amount shall be a charge on the property of defendants No. 3, 4 and 6 in respect of which an equitable mortgage was created in favour of the plaintiff-Bank and the details of which have been given m the plaint and also the land, building and machinery where the factory of defendant No.1 is running and that in case of default of any instalment the plaintiff Bank shall be entitled to realise the balance decretal amount by sale of the said property forthwith.” 7. The precise grievance of the learned Counsel for the plaintiff-appellant is that in the facts and circumstances of the case and in view of the pleadings of the parties as well as the statements of the learned Counsel for the parties before the learned Single Judge, including the admission of the claim on behalf of the defendants by their learned Counsel, the learned Single Judge should have directed the sale of the property of the defendants for realisation of the decretal amount. To this argument of the learned Counsel for the plaintiff-appellant, the learned Counsel for the defendants has no answer except to re-iterate his stand that the compromise decree should not be interfered with. At the cost of repetition, it has to be stated that the compromise decree is not being interfered with, only the legal position is being implemented. To this argument of the learned Counsel for the plaintiff-appellant, the learned Counsel for the defendants has no answer except to re-iterate his stand that the compromise decree should not be interfered with. At the cost of repetition, it has to be stated that the compromise decree is not being interfered with, only the legal position is being implemented. We accordingly hold that the plaintiff-appellant was entitled to a decree for realisation of the decretal amount by sale of the mortgaged property of the defendants In case the decretal amount is not realised by sale of the same, the plaintiff appellant would be at liberty to proceed against the defendants as regards their personal property jointly and severally. We order accordingly, 8. For the reasons recorded above, this appeal is allowed. The judgment and decree of the learned Single Judge is amplified to the extent that 18% future interest with quarterly rests is allowed on the decretal amount from the date of the suit till realisation Consequently, it is directed that the decretal amount be realised by sale of the property of the defendants, which has been mortgaged with the plaintiff bank, in case the decretal amount is not realised by the said sale, the plaintiff-appellant will be at liberty to realise the same by proceeding against the individual property of the defendants jointly and severally. There will be no order as to costs. Appeal allowed.