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2012 DIGILAW 188 (RAJ)

Life Insurance Corporation of India v. Tikama Ram

2012-01-19

KAILASH CHANDRA JOSHI

body2012
JUDGMENT 1. - This civil first appeal has been filed by the appellant-plaintiff Life Insurance Corporation of India against the judgment and decree dated 01.11.2004 passed by learned Additional District Judge, Barmer (for short "the trial Court") in Civil Original Suit No. 14/2000. The suit has been decreed in favour of the appellant-plaintiff but the short question raised in this appeal is regarding the rate of interest and the period for which the interest is to be allowed to the appellant-Corporation. The brief facts of the case are that the appellant-Corporation filed a suit before the learned trial Court against the defendant-respondent alleging therein that the defendant is a policy holder of the appellant-Corporation. The policy of Rs. 50,000/- was taken by the defendant for 25 years, the premium of which was of Rs. 2187/- per annum. It has been further averred that the defendant wanted to construct his house and therefore, he applied for a loan to the appellant-Corporation. The appellant-Corporation sanctioned a loan of Rs. 67,000/- to the respondent-defendant. The respondent mortgaged the house and his policy with the appellant-Corporation for security purposes. It is alleged that interest at the rate of 15% per annum was agreed between the parties. It is also agreed that if the installments of loan and premium of policy is not deposited within time, the additional interest at the rate of 2% per annum shall be payable. It has been further averred by the appellant-Corporation that after executing promissory note and receipts, the respondent-defendant was given Rs. 61,000/- but thereafter, he failed in his commitments despite efforts made by the Corporation as well as assurance given by the respondent. In the aforesaid background, the appellant-Corporation filed the suit. 2. The respondent-defendant submitted his written statements denying the contents of the suit. 3. On the basis of the pleadings of the parties, the learned trial Court framed six issues and the evidence of the appellant was recorded. The suit was decided ex-parte. The learned trial Court vide judgment and decree dated 01.11.2004 decreed the suit in favour of the appellant and awarded interest at the rate of 6% per annum to the appellant-Corporation from the date of passing the decree. 4. The suit was decided ex-parte. The learned trial Court vide judgment and decree dated 01.11.2004 decreed the suit in favour of the appellant and awarded interest at the rate of 6% per annum to the appellant-Corporation from the date of passing the decree. 4. The learned counsel for the appellant contended that the learned trial Court did not allow the interest to the appellant from the date of filing of the suit to the date of the judgment and further, from the date of judgment, the learned trial Court has allowed the interest at the rate of 6% per annum only, whereas in the condition of the agreement, it was clearly mentioned that the interest at the rate of 15% per annum is to be paid by the defendant-respondent and if the installments of loan and premium of policy are not deposited within time, the additional interest at the rate of 2% per annum shall be payable. Thus, the learned trial Court failed to consider this aspect. Learned counsel further submitted that the rate of interest is to be awarded at the rate of 15% per annum in addition of 2% per annum interest i.e. 17% per annum as per the agreed rate. In support of his arguments, learned counsel for the appellant has placed reliance upon the judgments of Hon'ble Supreme Court in State Bank of India v. Yasangi Venkateswara Rao, reported in, 1999 1 AD (S.C.) 317 and in Punjab Financial Corporation v. M/s. Surya Auto Industries, reported in, AIR 2010 SC 266 . 5. Per contra, learned counsel for the respondent has supported the judgment impugned and contended that the rate of interest awarded by the trial Court is appropriate, which does not require any interference. 6. I have perused the impugned judgment passed by learned trial Court and considered the contentions raised by both the parties. 7. The learned trial Court has not allowed any interest to the appellant from the date of the suit to the date of passing of the judgment whereas the appellant is entitled to interest for the said period. Now, only question for consideration before this Court is as to what interest the appellant is entitled to be paid. 8. 7. The learned trial Court has not allowed any interest to the appellant from the date of the suit to the date of passing of the judgment whereas the appellant is entitled to interest for the said period. Now, only question for consideration before this Court is as to what interest the appellant is entitled to be paid. 8. In the case of State Bank of India v. Yasangi Venkateswara Rao (supra), the Hon'ble Supreme Court held that rate of interest charged by banking companies is not to be subject to scrutiny by Courts. It has been further held that entering into a mortgage is a matter of contract between the parties. If the parties agree that in respect of the amount advanced against a mortgage, compound interest will be paid, then how the Court can possibly interfere and reduce the amount of interest agreed to be paid on the loan so taken. The mortgaging of a property is with a view to secure the loan and has no relation whatsoever with the quantum of interest to be charged. Similarly, in the case of Punjab Financial Corporation v. M/s. Surya Auto Industries (supra), the Hon'ble Supreme Court held that when the terms of the loan agreement has not been challenged, the Court could not have suo motu altered terms of agreement and directed the Corporation will be entitled to charge simple interest at the rate of 10% after expiry of six months from date of taking over of unit. 9. In view of the aforesaid two judgments, the appeal filed by the appellant is liable to be allowed and the judgment passed by the learned trial Court requires to be modified to the extent of the rate of interest and the date from which the interest is to be paid. 10. Accordingly, this civil first appeal is allowed and the judgment and decree of the learned trial Court is modified to the extent that the appellant shall be entitled to interest at the rate of 15% + 2% additional interest per annum to be paid by the respondent from the date of filing of the suit till the date of realization. Learned counsel for the respondent submits that the original documents of the respondent are lying with the appellant-Corporation. If so, after making the full payment, the respondent shall be entitled to get his original documents from the appellant-Corporation.Appeal allowed. Learned counsel for the respondent submits that the original documents of the respondent are lying with the appellant-Corporation. If so, after making the full payment, the respondent shall be entitled to get his original documents from the appellant-Corporation.Appeal allowed. *******