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2008 DIGILAW 2111 (PNJ)

Gurdip Singh and other v. Bank of India

2008-12-12

VINOD K.SHARMA

body2008
JUDGMENT Vinod K. Sharma, J. (Oral) - This revision is directed against the order dated 12.11.1991 passed by the learned Sub Judge First Class, Jalandhar vide which application moved by the petitioners under Section 47 of the Code of Civil Procedure (for short the Code) for refund of money paid in excess of amount due has been ordered to be dismissed. 2. The petitioners took a loan of Rs. 13,000/- from the Bank of India, Jalandhar Branch in the year 1973-74 as crop loan as well as for the purchase of equipments. Judgement debtors No. 2 and 3 stood sureties for repayment of loan, for the petitioners. 3. As the petitioners failed to repay the loan a suit was filed for recovery which was decreed in favour of the Bank on 9.6.1982 for a sum of Rs. 23,841.06 P. with future interest at the rate of 13.35 per cent per annum from the date of suit till realization. 4. Execution application was filed in which amount was paid. 5. The petitioners thereafter moved an application for refund of excess amount on the plea that the order of the court granting interest beyond 6 per cent per annum after the passing of the decree was nullity and without jurisdiction as the court could only grant interest at the rate of 6 per cent per annum in case of agricultural loan as it could not be said to be commercial transaction to attract the proviso to Section 34 of the Code. 6. The learned trial court rejected the plea raised by the petitioners by observing that it was not open to the executing Court to go behind the decree and adjudicate as to whether interest granted was legal or not. 7. This court in the case of Jaswant Singh v. State Bank of India, (2004-1) PLR 347 has been pleased to lay down that Executing Court cannot go behind the decree. 8. Mr. 7. This court in the case of Jaswant Singh v. State Bank of India, (2004-1) PLR 347 has been pleased to lay down that Executing Court cannot go behind the decree. 8. Mr. Kanwaljit Singh, learned senior counsel appearing on behalf of the petitioners, however, contends that the decree granting interest over and above 6 per cent per annum from the date of passing of the decree would be nullity, thus, without jurisdiction as under Section 34 of the Code the court can only grant interest at the rate 6 per cent and not more than that unless the transaction is commercial so as to be covered under proviso to Section 34 of the Code of Civil Procedure. 9. In support of this contention learned senior counsel has placed reliance on the judgment of this Court in the case of Krishan Lal v. State Bank of Patiala and Ors., 1990(1) PLR 132 and Siri Chand and another v. Central Bank of India, Yamunanagar, (1988-1) PLR 473, wherein this Court has been pleased to lay down as under :- "4. The provisions of Section 34 of the Code are not procedural in nature and in fact confer a jurisdiction on the Court, which, but for that provision would not be there. So was held by the Supreme Court in Thawardas Pherumal and another v. Union of India, and by a Division Bench of this Court in State of Punjab v. Surinder Nath Goel. It is, therefore, obvious that the Court has the jurisdiction to grant interest after the filing of the suit only in accordance with the provisions of Section 34 of the Code and any order made in contravention therof would be without jurisdiction. Once it is held any judgment or decree passed in contravention of Section 34 of the Code would be without jurisdiction, it would be open to challenge even in execution proceedings, being a nullity and void decree. A similar view expressed by a Division Bench of Orissa High Court in V. Radhreenaryan Murty Raj. v. Epari Venugoplan and P.D. Desai, C.J. In M/s Laxmi Furniture and Saw Mills, Simla v. Himachal Pradesh Financial Corporation, Simla". Section 34 of the Code of Civil Procedure reads as under :- "34. A similar view expressed by a Division Bench of Orissa High Court in V. Radhreenaryan Murty Raj. v. Epari Venugoplan and P.D. Desai, C.J. In M/s Laxmi Furniture and Saw Mills, Simla v. Himachal Pradesh Financial Corporation, Simla". Section 34 of the Code of Civil Procedure reads as under :- "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 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 six 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 : Provided 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 six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate ate which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I - In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970, (5 of 1970). Explanation II - For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability. (2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date payment or other earlier date, the court shall be deemed to have refused such interest, and a separate suit therefore shall not lie." 10. Reading of Section 34 of the Code leaves no manner of doubt that agricultural loan cannot be treated to be commercial transaction as a commercial transaction has been defined in Explanation II to mean that transaction would be a commercial transaction if it is connected with the industry, trade or business of the party incurring the liability. 11. Reading of Section 34 of the Code leaves no manner of doubt that agricultural loan cannot be treated to be commercial transaction as a commercial transaction has been defined in Explanation II to mean that transaction would be a commercial transaction if it is connected with the industry, trade or business of the party incurring the liability. 11. Judicial notice can also be taken that the Reserve Bank of India also provides only interest at the rate of 6 per cent per annum on the agricultural loan. 12. Though it cannot be disputed that the Executing Court cannot go behind the decree, still it is settled law that when the decree is nullity or without jurisdiction the Executing Court can go in that aspect of the matter. 13. In the present case, grant of interest after passing of decree beyond 6 per cent annum being in contravention of Section 34 of the Code is to be held nullity and therefore the learned Executing Court could go into this aspect of the matter. The law laid down in the case of Jaswant Singh v. State Bank of India (supra) would not apply to the present case, as there is no dispute that loan in the case of petitioners was agricultural loan. No question would arise for executing court to go behind the decree 14. For the reasons stated above, this revision is allowed Impugned. order is set aside. 15. The case is sent back to the learned Executing Court to determine as to whether any excess amount has been paid by the petitioners to the decree holder-Bank towards interest in terms of Section 34 of the Code of Civil Procedure and whether any amount is required to be refunded to the petitioners. .