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2005 DIGILAW 611 (KAR)

SANGLI BANK LTD. v. MOHAN HIRACHAND SHAHA

2005-09-19

ASHOK B.HINCHIGERI, V.GOPALA GOWDA

body2005
( 1 ) THE plaintiff-Bank has come up in this appeal aggrieved by a portion of the judgment dt. 1-4-1997 and the decree passed therein by the Court of Civil judge and Asst. Sessions Judge, Athani in o. S. No. 252/1993. The parties herein would be referred as per the ranks they had in the trial Court. ( 2 ) IT is not in dispute that the plaintiff bank had given financial assistance of rs. 1,50,000. 00 to the defendants 1 to 3; the defendants 4 and 5 are the sureties. When the defendants committed default in the payment of the loan and the interest accumulated thereon, the plaintiff was constrained to file a suit for the recovery of a sum of Rs. 2,73,634. 74. ( 3 ) THE defendants 1 and 2 resisted the claim of the plaintiff-bank by filing their written statement. The defendants 3 to 5 remained ex parte. The trial Court framed as many as 8 issues and answered them in favour of the plaintiff to a great extent. The trial Court decreed the suit by holding that the plaintiff is entitled to recover an amount of Rs. 1,50,000. 00 from the defendants 1 to 5 with interest at the rate of 16. 5% from 24-3-1984 (date of disbursement of the amount)till the filing of the suit without charging compound interest, penal interest and d. I. G. G. C. fees and by giving deductions to the amounts credited by the defendants in their loan account. Further the trial Court granted the pendente lite and future interest at the rate of 6% p. a. The trial Court has also moulded the relief by permitting defendants 1 and 2 to repay the amounts due in 5 equal installments commencing from 1-6-1997 onwards with single default clause. ( 4 ) THE plaintiff has filed this appeal agitating its claim to get interest at the contractual rate for the period of pendency of the suit and thereafter. It is also demanding quarterly rests and penal interest on the ground that the loan was obtained for commercial purpose. That the guarantee is not allowed is the further grievance of the plaintiff-Bank. ( 5 ) THE grievance of the plaintiff-Bank has received our anxious consideration. We have to examine the tenability of the plaintiff-Bank's claims in the light of the catena of decisions of this Court and of the Hon'ble supreme Court. That the guarantee is not allowed is the further grievance of the plaintiff-Bank. ( 5 ) THE grievance of the plaintiff-Bank has received our anxious consideration. We have to examine the tenability of the plaintiff-Bank's claims in the light of the catena of decisions of this Court and of the Hon'ble supreme Court. That the pendente lite interest and the future interests are not controlled by the contract and that they continue to be in the realm of the court's discretion is the law laid down by a Division bench of this Court in the case of ILR 2001 kar 553 (M. S. Venus Brewery and others v. Syndicate Bank ). ( 6 ) IT is also trite position in law that the decree granting future interest exceeding 6% p. a. is not proper, if the loan liability does not arise from commercial transaction. In this regard, it may be profitable to refer to the judgments reported in (i) AIR 1994 Pandh 98, (ii) ILR 1985 Kar 4282 : ( AIR 1986 Kar 242 ), (iii) AIR 1940 Kar 145. ( 7 ) FURTHER by its well considered order, this Court has held that quarterly rests on agricultural loan are not allowable (ILR 1985 kar 1277) : ( AIR 1985 Kar 228 ) and ILR 1994 Kar 2234: (1994 AIR SCW 2721 ). ( 8 ) WHILE examining the provisions of Sec. 34 of CPC and Secs. 21, 35a and 21a of banking Regulation Act, 1949, the Hon'ble supreme Court in the case of (Central Bank of India v. Ravindra) AIR 2001 SC 3095 has emphazised primacy of the former by holding that the Civil Court has unfettered power to prescribe the equitable rate of interest for the period during which the suit is pending and thereafter, that the power of the Civil court to fix the pendente lite interest and future interest has remained intact. The relevant portion of the said judgment is extracted herein below. "sec. 34 is a general procedural provision and whether it would apply or not and if applied then to what extent would obviously depend on the fact situation of each case. ( 9 ) WHILE the plaintiff-Bank cannot dispute this legal position with any rate of success, it has taken a ground in the appeal memorandum that the loan transaction in question is not for the agricultural purpose at all. ( 9 ) WHILE the plaintiff-Bank cannot dispute this legal position with any rate of success, it has taken a ground in the appeal memorandum that the loan transaction in question is not for the agricultural purpose at all. As we perused the records, we find that the plaintiff bank has not laid any foundation in support of its contention in the appeal memorandum that the loan was not taken for agricultural purpose. Therefore, the finding delivered by the trial Court on the fact as to the purpose of the loan cannot be interfered with. The plaintiff is content by raising a ground that there was no justification for coming to the conclusion that the loan was not for agricultural purpose; but nowhere it specifies the purpose for which the amounts were actually lent. ( 10 ) IN the plaint, there is no categorical averment as to how the defendants are liable to pay the guarantee fee. Therefore, we cannot find fault with the trial Court's order in not granting the guarantee fee. ( 11 ) ON the whole, we find that the judgment and decree under appeal do not suffer from any perversity or infirmity, therefore our interference in the judgment and decree under appeal is not warranted. A perusal of the judgment reveals that the trial Court has paid due weightage to all the aspects of the matter. It has allowed the entire claim of the plaintiff-bank i. e. , both in respect of the principal and of the interest at the rate of 16. 5% till the date of the institution of the suit. In the light of the judgments referred herein above, we have no hesitation in holding that the trial Court is justified in not granting the compound interest, penal interest, guarantee fees, etc. ( 12 ) CONSEQUENTLY, we affirm the judgment and decree under appeal and dismiss this appeal. No order as to costs.