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2000 DIGILAW 205 (KAR)

CANARA BANK v. U. RAMANATH BHAT

2000-03-08

HARI NATH TILHARI

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HARI NATH TILHARI, J. ( 1 ) THIS is a plaintiff's appeal arising from the judgment and decree dated December 6, 1993, passed by the 6th Additional City Civil Judge, Bangalore, in O. S. No. 3688 of 1990, for the recovery of a sum of Rs. 1,22,170. 18 together with interest at the rate of 24 per cent. per annum compounded quarterly from the defendant as he availed of Can-card facility given by the bank on October 27, 1988, and did not pay money within the time granted by the terms and conditions. ( 2 ) THE defendant did not put in his appearance and he absented, The suit proceeded ex parte. ( 3 ) AFTER considering the evidence on record produced before the court, the trial court decreed the plaintiffs suit for a sum of Rs. 1,22,170. 18. The trial court held that the court has got power to grant interest on a sum of Rs. 89,786. 94 at the rate of 12 per cent. per annum from July 3, 1990, till the date of payment. ( 4 ) THE respondent has neither appeared, nor has filed any cross-objections. ( 5 ) SRI M. D. Praveen holding brief for Sri Urval N. Ramanand, learned counsel for the appellant contended that the interest that has been awarded on a sum of Rs. 89,786. 94 only at the rate of 12 per cent. per annum, which according to the trial court given out of the bill for cash taken and the value of the goods taken by the defendant-respondent is not justified. Learned counsel contended that interest should have been awarded on a sum of Rs. 1,22,170. 18. He further contended that the interest at agreed rate. e. , 24 per cent. per annum should have been awarded as compounded every quarterly from the date of the suit till the date of payment. ( 6 ) SECTION 34 of the Civil Procedure Code, reads thus : "34. 1,22,170. 18. He further contended that the interest at agreed rate. e. , 24 per cent. per annum should have been awarded as compounded every quarterly from the date of the suit till the date of payment. ( 6 ) SECTION 34 of the Civil Procedure Code, reads thus : "34. Interest.-- (1) Where and in so far as a decree is for the payment of money, the court may, in the decree order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit (with further interest at such rate not exceeding 6 per cent. per annum, as the court deems reasonable on such principal sum) from the date of the decree to the date of payment, or to such earlier date as the court thinks fit. " ( 7 ) UNDER this section, the court has been given power that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed 6 per cent. per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transaction. ( 8 ) EXPLANATION II to Section 34 of the Civil Procedure Code, 1908, defines the commercial transaction is a transaction if it is connected with the industry, trade or business of the party incurring the liability. It has not been shown that the defendant who had incurred the liability in relation to the transaction connected with the industry, trade or business of the defendant. Really the finding of the trial court is that the defendant is not a merchant or businessman. As such the case may not come within the proviso to Explanation II to Section 34 of the Civil Procedure code, but it is covered by the main clause. The expression principal sum adjudged, in my opinion, means and include the loan amount or debt amount and interest which has accrued up to the date of the suit on that amount. The expression principal sum adjudged, in my opinion, means and include the loan amount or debt amount and interest which has accrued up to the date of the suit on that amount. When I so observed, I find support for my view from the decision of the Division Bench of the Himachal Pradesh High Court in Punjab National Bank v. Vidya Hatchery AIR1999 HP 24 , [1999 ]98 Compcas409 (HP ), as well as from the decision of the Supreme Court in the case of Bank of Baroda v. Jagannath pigment and Chemicals (1996 )112 PLR193 , 1996 (5 )SCALE38a , (1996 )5 SCC280. In this view of the matter, in my opinion, the trial court should have awarded the interest pendente lite and future on a sum of Rs. 1,22,170. 18. But under Section 34 of the civil Procedure Code, the extent of limit up to which rate of the interest can be awarded is 6 per cent. per annum on the non-commercial transaction. Hence, the judgment and decree of the trial court is modified. ( 9 ) THE regular first appeal, as such, is hereby allowed with costs. ( 10 ) THE suit of the appellant-plaintiff is hereby decreed for a sum of Rs. 1,22,170. 18 together with interest pendente lite and future at the rate of 6 per cent. per annum on the above amount rs. 1,22,170. 18 from the date of the suit till the date of payment.