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2004 DIGILAW 210 (KAR)

B. DHANRAJ v. CENTRAL BANK OF INDIA

2004-03-16

body2004
K. SREEDHAR RAO, J. ( 1 ) THE appeal filed against the judgment and decree passed in O. S. No. 163/97 on the file of Civil Judge (Sr. Dn.), davanagere. The appellant is the defendant and had availed credit card facility from the respondent/bank (hereinafter called plaintiff ). On the credit card borrowings the defendant is due in a sum of Rs. 1,33,000/ -. The plaintiff bank filed a suit for recovery of the dues with service charges at the rate of 2. 5% p. m. on the principal claim from the date of the suit till payment with costs. ( 2 ) THE availment of credit card facility is admitted. In the present appeal the rate of interest granted at 12% p. a. is challenged. ( 3 ) IT is the contention of the appellant there is no stipulation to pay interest. The stipulation enabling the bank to collect service charges at the rate of 2. 5% p. m. does not amount to a contract to pay interest. Therefore, grant of interest is bad in law. ( 4 ) AFTER going through the documentary evidence at Ex. PL, the application submitted by the appellant for grant of credit card. The terms of Ex. P. I lay down the conditions applicable to Central card membership. The defendant has agreed to the terms of Ex. P. I. The Exs. D. 5 and D. 6 are the documents relating to the terms and conditions of Central Card membership. In Ex. D. 5 the card holders are informed by the general Manager of the Credit Card division that on the dues the service charge at the rate of 2. 5% p. m. will be collected which is otherwise the interest payable on the credit card dues. The stipulation clearly goes to show that the defendant had agreed to pay service charges at the rate of 2. 5% p. m. by way of interest. ( 5 ) THE trial Court is very liberal in grant- ing interest at the rate of 12% despite the contract rate of 2. 5% p. m. which works out 30% p. a. The bank appears to be satisfied with the judgment and decree and has not preferred any appeal against the rejection of the contract rate of Interest. The grant of interest by the trial Court is quite reasonable. I find no merit in the appeal. Accordingly appeal dismissed. 5% p. m. which works out 30% p. a. The bank appears to be satisfied with the judgment and decree and has not preferred any appeal against the rejection of the contract rate of Interest. The grant of interest by the trial Court is quite reasonable. I find no merit in the appeal. Accordingly appeal dismissed. Appeal dismissed. --- *** --- .