Research › Search › Judgment

Bombay High Court · body

2002 DIGILAW 453 (BOM)

Bank of India v. Manohar Lal Arya

2002-06-04

F.I.REBELLO

body2002
JUDGMENT - REBELLO F.I., J.:---The plaintiff, a nationalised bank, has filed the suit against the defendant in respect of the user of the credit card issued by the plaintiff in favour of the defendant. It is the case of the plaintiffs that the defendant used the credit card and as on 15th July, 1999 the amount due and payable was Rs. 78,015.80. A legal notice was sent wherein further interest at 2.5% per month was payable from 16th July, 1999 till payment. The amount claimed at the time of filing of the suit was Rs. 88,266.80/- The suit was filed as a summary suit. The defendant has been served. Appearance was put up on behalf of the defendant. Office has raised some objections in respect of the appearance put up on behalf of the defendant. This has been communicated to the Advocate who filed appearance on behalf of the defendant. Copy of the notice sent by Registry of this Court was also intimated to the defendant. Inspite of the above no steps have been taken by the defendant. The plaintiffs thereafter have taken out summons for judgment and have served a copy of the same on Advocate for the defendant. The affidavit of service has been filed and the same is taken on record and marked Exhibit "A". 2. This being a summary suit and as the defendant has failed to file any reply the question which arises is whether on the facts as pleaded on failure to file reply to the summons for judgment the plaintiffs are entitled to a decree for the amount claimed. In (Central Bank of India v. V.V. Kini)1, A.I.R. 1999 Bom. 409, this Court has taken a view that the summary suit can be maintained in respect of use of a credit card. The suit therefore, as a summary suit is clearly maintainable. 3. The only limited issue is whether the plaintiffs are entitled to claim interest at 2.5% per month after the filing of the suit. There is no dispute that legal notice has been served by the plaintiff on the defendant wherein interest has been claimed. It is therefore, clear that after filing of the suit it will be open to this Court to grant interest in the event there is no provision or contractual term between the parties to determine the interest. There is no dispute that legal notice has been served by the plaintiff on the defendant wherein interest has been claimed. It is therefore, clear that after filing of the suit it will be open to this Court to grant interest in the event there is no provision or contractual term between the parties to determine the interest. In respect of the use of the credit card as noticed in Central Bank of India (supra) what the plaintiffs are claiming is service charges. This has been so considered as otherwise the charge of interest by a nationalised bank or any other bank falling within the provisions of the Banking Regulation Act would be determined by the statutory instructions issued by the Reserve Bank of India in respect of the powers conferred on them. Though it was argued that 2.5% service charge is interest this Court negated the same and held it to be service charge. The service charge the plaintiffs can claim at 2.5% p.m. in terms of the contract till the date of filing of the suit. Clearly, therefore, in so far as the plaintiffs are concerned they will be entitled for a decree in the sum of Rs. 88,260.88 as on the date of filing of the suit. 4. The question remains as to what is the interest that the plaintiffs will be entitled from the date of filing the suit. Plaintiffs have served legal notice claiming interest. Considering that there is no arrangement between the parties in respect of the interest the plaintiffs would be entitled to current rate of interest on fixed deposit which can be claimed in terms of the Interest Act. Considering the interest now being charged the plaintiffs will be entitled to 10% interest. Learned Counsel for the plaintiff has drawn my attention to the order passed by another learned Judge in an unreported judgment in Summons for Judgment No. 751 of 1999 in Summary Suit No. 250 of 1999 (Bank of India v. Vogue India P. Ltd. another)2, dated 9th March, 2001 wherein the learned Judge of this Court has granted interest at the rate of 2.5% per month. In the case of (U.P. Co-operative Federation Ltd. v. M/s. Three Circles)3, 2000(3) Bom.C.R. 360 , a Division Bench of this Court considering the issue of interest after filing of the suit and there was no provision in the contract or agreement the interest rates of the year 1999 was pleased to Award 12% interest being the interest payable on fixed deposit. It may be mentioned that in both the orders cited before me the issue of interest was not in issue or raised. In fact in Central Bank of India (supra) this aspect was clearly considered and this Court in that judgment held that 2.5% is not interest, but service charges. That being the case the plaintiff cannot now fall back to claim interest at 2.5% per month. Hence the plaintiffs would be entitled to interest on fixed deposit in terms of the judgment of this Court in (Municipal Corporation of Gr. Bombay and another v. Kulkarni Co., and another)4, 1999(1) Bom.C.R. 269 . Considering that the plaintiffs will be entitled to interest at the rate of 10% p.a. from the date of the suit till payment or realisation. As there are no triable issues raised by the defendants plaintiffs are entitled to judgment. In the light of that the following order:--- Suit decreed in the principal sum of Rs. 88,266.80 which will interest at 10% per annum from 6th January, 2000 till decree and at the same rate till realisation with costs. Suit and summons for judgment disposed of accordingly. Refund of Court Fees as per Rules. Order accordingly. -----