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2001 DIGILAW 805 (PNJ)

Sat Pal and Brothers v. Punjab National Bank, Thanesar, Dist. Kurukshetra

2001-08-03

M.M.KUMAR

body2001
JUDGMENT M.M. Kumar, J. - This is a Civil revision filed by the petitioners Judgment- debtors (for brevity, the judgment-debtors) against the order of the executing Court dated 23.11.1994. The Executing Court while rejecting the objections of the Judgment-debtors concluded that the Decree-holders- respondents (for brevity, the Decree-holder) was entitled to interest on the total amount of Rs. 13,387.10 although the same includes the interest. 2. The brief facts of the case are that the Judgment-debtors had availed a cash credit hypothecation limit upto Rs. 15,000/- on 13.11.1979 for purchase of cloth etc. for their shop. The Decree-holder had sanctioned the said facility to the Judgment-debtors on interest at the rate of 13% per annum with quarterly rests under the terms and conditions of hypothecation agreement and a demand pronote dated 13.11.1979. As a collateral security, the Judgment- debtors furnished the guarantee of equitable mortgage by mortgaging the house belonging to one Smt. Vidya Wati and the registered title deed was deposited with the Decree-holder on 13.11.1979. The Decree-holder filed a suit against the Judgment-debtors for recovery of outstanding amount of Rs. 6,789.50 as principal amount and Rs. 6,597.60 as interest from the defendants. The averments made by the Decree-holder are mentioned in paragraph 8 of the plaint and the same read as under :- "8. That according to the bank record and statement of account maintained by the plaintiff in regular course of business, the amount due with interest upto 31.12.1982 from the defendants comes to Rs. 6789.50 as per copy of account enclosed. Beside the said amount of Rs. 6789.50 a sum of Rs. 6597.60 is also due on account of interest from 1.1.1983 to 2.12.1984. Thus a sum of Rs. 13387.10 is due and recoverable from the defendants upto date." 3. The trial Court passed the decree on 29.5.1986 and directed that the Decree-holder was entitled to a sum of Rs. 13,387.10 by sale of mortgaged property and the decree reads as under :- "Plaint presented on 4.2.1984. This suit coming on this day for final disposal before me (U.B. Khanduja, HCS, Sub Judge Ist Class, Kurukshetra) in the presence of Sh. D.P. Goyal, Advocate for the plaintiff and Sh. S.C. Sharma, Advocate for the defendants. It is ordered that the suit of the plaintiff bank is decreed with costs to the effect that the plaintiff bank is entitled to a sum of Rs. D.P. Goyal, Advocate for the plaintiff and Sh. S.C. Sharma, Advocate for the defendants. It is ordered that the suit of the plaintiff bank is decreed with costs to the effect that the plaintiff bank is entitled to a sum of Rs. 13387.10 by sale of the mortgaged property, described above, from the sale of hypothecated goods and in case of deficiency the balance amount shall be realized from the other property of the defendants. The plaintiff bank is also entitled to recover interest at the rate of 13% per annum of the principle (principal ?) amount with quarterly rest with effect from 4.2.1984 till the realization of the amount." A perusal of the decree shows that the Decree-holder was entitled to recover interest at the rate of 13% per annum on the principal amount with quarterly rests w.e.f. 4.2.1984 till its realisation. In the execution application, the Decree-holder made a claim before the Executing Court that it was entitled to charge interest at the rate of 13% per annum on the whole of the decretal amount of Rs. 13,387.10. However, the contention of the Judgment-debtors was that the Executing Court cannot go behind the decree and the principal amount has to be considered in view of the decree passed, namely interest at the rate of 13% per annum on the principal amount. The Court while passing the decree after specifying the amount of Rs. 13,387.10, specifically ordered the recovery of interest at the rate of 13% per annum on the principal amount which is clearly described in paragraph 8 of the plaint by the Decree-holder itself. 4. As the amount involved was trivial in nature and substantial amount stood already paid. I have passed an order on 22.7.2001 directing Shri Rajesh Garg. learned counsel for the Decree-holder to seek instructions as to whether the Decree-holder i.e. Punjab National Bank was prepared to accept a lump sum amount to settle the accounts finally. However, at the commencement of the hearing the learned counsel showed the inability of the Decree-holder to agree to any such settlement. 5. I have heard Shri Pritam Saini, learned Counsel for the petitioners and Shri Rajesh Garg, learned counsel for the respondent. 6. Shri Pritam Saini, learned counsel has argued that the Executing Court cannot go behind the decree and embark upon redetermination of decree. 5. I have heard Shri Pritam Saini, learned Counsel for the petitioners and Shri Rajesh Garg, learned counsel for the respondent. 6. Shri Pritam Saini, learned counsel has argued that the Executing Court cannot go behind the decree and embark upon redetermination of decree. For this proposition, he cites the decisions in the cases of M/s Tilak Raj Ashok Kumar and others v. Union Bank of India, 1999(1) PLR 49 and Fauja Singh v. Punjab National Bank, Ludhiana, 1999(1) PLR 103. He submits that the terms of the decree clearly demonstrate that interest 13% per annum was to be recovered on the principal amount with quarterly rests w.e.f. 4.2.1984. Shri Saini assailing the impugned order argues that the reasoning adopted by the Executing Court is full of errors inasmuch as the Executing Court has ordered payment of interest on the principal amount and the amount of interest claimed. His second submission is that the Decree-holder is entitled to contractual rate of interest and not penal rate of interest. For this proposition, he relied upon the decision in the case of Punjab National Bank v. Malkiat Kaur and others, 2001(3) A.I.J. 24. 7. Shri Rajesh Garg, learned counsel for the Decree-holder argues that the principal sum should be the amount for which the suit is filed and not the one which is borrowed. According to learned counsel, the suit was filed for recovery of an amount of Rs. 13,387.10, although the principal sum was Rs. 6,789.50. In support of this proposition, he cites the decision in the case of Bank of Baroda v. M/s. Jagannath Pigment and Chem. and others, 1995 I.S.J. (Banking) 573 and also the decision in the case of Punjab and Sind Bank v. Jain Rice Mills, 2000 I.S.J. (Banking) 12. 8. I have thoughtfully considered the respective submissions of the learned counsel and find that the Executing Court committed jurisdictional error by going behind the decree. The decree clearly stipulated that the Decree-holder was entitled to recover interest at the rate of 13% per annum on the principal amount with quarterly rests w.e.f. 4.2.1987 till realisation of the amount. The judgments cited by Shri Rajesh Garg are not attracted to the controversy in the present revision petition. In the case of Punjab and Sind Bank (supra) the words used in the decree were not interest "on principal amount" as it is in the present case. The judgments cited by Shri Rajesh Garg are not attracted to the controversy in the present revision petition. In the case of Punjab and Sind Bank (supra) the words used in the decree were not interest "on principal amount" as it is in the present case. In that case the words used in the decree were interest "on the amount" i.e. the amount decreed. In the last paragraph of the said judgment, this distinction becomes apparent which is as under :- "Admittedly, the judgment-debtors made payments in pursuance of the decree but the dispute has arisen with regard to the interest. The executing court had held that the decree-holder is entitled to the interest @ 12.4% per annum on the principal amount which was advanced to the judgment-debtors. Whereas the interpretation sought by the bank is that the bank is entitled to interest at the rate of 12.5% per annum on the decretal amount of Rs. 2,55,993.30. I concur with the submission raised by the bank because the words used by the trial court are "The plaintiff bank will be further entitled to charge interest on the amount at the rate of 12.5% per annum from the date of institution of the suit till the realisation." The trial court has never stated that the bank shall charge interest @ 12.5% on the amount of principal. Rather the words on the amount shall relate to the decretal amount i.e. Rs. 2,55,993.30. In these circumstances the interpretation which has been given by the learned executing court in the terms of the decree is erroneous. It is the settled principle of law that the executing court cannot go behind the decree. The bank will be entitled to charge further interest @ 12.5% per annum on the awarded amount of Rs. 2.55,993.30 and the costs as per compromise. The interest will be calculated @ 12.5% per annum for the date of the institution of the suit." In so far as the other judgment rendered by their Lordships of the Supreme Court in the case of Bank of Boardas case (supra) relied on by Shri Garg is concerned, the same has hardly any bearing on the controversy in hand. The interest will be calculated @ 12.5% per annum for the date of the institution of the suit." In so far as the other judgment rendered by their Lordships of the Supreme Court in the case of Bank of Boardas case (supra) relied on by Shri Garg is concerned, the same has hardly any bearing on the controversy in hand. In that case, their Lordships of the Supreme Court held as under :- "The High Court accepted the contention and modified the decree in that it held that future interest should be calculated on the sum borrowed, vis-a-vis Rs. 1,20,675.59 and not on the principal sum adjudged i.e. Rs. 1,66,759.20 P. Counsel for the appellant-bank stated that this approach of the High Court runs counter to this Court decision in Corporation Bank v. D.S. Gowda, 1994(3) Scale 46 : 1994 ISJ (Banking) 594. The respondents though served have not chosen to enter an appearance and contest this appeal. The premise on which the High Court based its impugned decision not longer holds the field in view of the decision in Corporation Bank, 1994 ISJ (Banking) 594. Therefore, the said decision of the High Court must be reversed and the decision of the trial Court restored. The appeal is allowed accordingly with no order as to costs." The aforementioned observations of their Lordships clearly indicate that it was the decree of the Court which was subject matter of appeal and the same was modified by the High Court. It was not the decree in execution that had become final as the facts in the present case are. If the Decree-holder was aggrieved by the terms of the decree, it was open to it to challenge the decree before the Appellate court. Having not done that, the decree-holder cannot now say that the decree be interpreted in the light of the observations made by their Lordships in Bank of Barodas case (supra) and the provisions of Section 34 of the Code alone, although the decree itself it absolutely clear. This is not within the jurisdiction of the Executing Court. In my opinion, once the terms of the decree are absolutely clear and it only stipulated payment of the total amount claimed and granted interest on the principal amount alone, then the decree-holder cannot be heard to say that interest on the whole amount is to be paid. This is not within the jurisdiction of the Executing Court. In my opinion, once the terms of the decree are absolutely clear and it only stipulated payment of the total amount claimed and granted interest on the principal amount alone, then the decree-holder cannot be heard to say that interest on the whole amount is to be paid. Therefore, I do not find any substance in the argument of Shri Garg. 9. The judgment cited by Shri Saini lends substantial support to his argument. It is trite to observe that the Executing Court cannot go behind the decree and in that context, both the judgments cited by Shri Saini support this proposition. It may be mentioned that the judgment in Tilak Rajs case (supra) cited by Shri Saini is based on the judgment of the Honble Supreme Court rendered in the case of State of Punjab and others v. Krishan Dayal Sharma, AIR 1990 SC 2177. I also find that the decision in the case of Punjab National Bank (supra) also supports the proposition that the Decree-holder is entitled to contractual rate of interest and not the penal rate of interest. 10. It is appropriate to mention that while issuing notice of motion, this Court has stayed further recovery from the Judgment-debtors on 9.12.1994 and the revision petition was admitted on 21.2.1995. That interim order is continuing till date. 11. In view of the reasons given above, this revision petition succeeds and the impugned order of the trial Court dated 23.11.1994 is set aside with a direction to the Executing Court to calculate the interest on the principal amount of Rs. 6,789.50 at the rate of 13% per annum with quarterly rests w.e.f. 4.2.1984. The amount so calculated minus the amount already paid by the Judgment-debtors becomes recoverable from the Judgment-debtor. The same may be recovered by the Decree-holder in accordance with the terms of the decree. Revision allowed.