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2017 DIGILAW 829 (MAD)

C. Ramachandran v. Sagar Investments

2017-04-03

N.SATHISH KUMAR

body2017
JUDGMENT : Aggrieved over the judgment and decree of the trial Court in decreeing the suit for recovery of a sum of Rs.3,07,711/- with interest at the rate of 36% p.a. till the date of realisation, the present appeal is filed by the appellants herein. 2. For the sake of convenience, the parties are referred to as per their ranking before the trial Court. 3. The brief facts of the case of the plaintiff are as follows: The 1st defendant has approached the plaintiff for financial assistance for the purpose of purchase of Ambassador car and also entered into Hire Purchase agreement on 21.3.1996 for a sum of Rs.2,50,000/-. The plaintiff has agreed to repay the aforementioned amount within 36 Consecutive periodical instalments with 18% interest, as finance charges amounting to Rs.1,35,000/- and the total agreement value comes to Rs.8,85,000/-. The 1st defendant has paid only 16 instalments amounting to Rs.1,71,200/- and thereafter, he failed to pay the instalments regularly. The 2nd defendant stood as guarantor. Hence, the defendants are liable to pay a sum of Rs.1,38,800/- towards balance in agreement and a sum of Rs.1,67,900/- towards additional financial charges. Hence, the plaintiff filed a suit for a sum of Rs.3,07,711/-. 4. The brief averments of the written statement filed by the 1st defendant are as follows: Admitting the Hire Purchase contract, it is the contention of the defendants that at the time of Hire Purchase Agreement, the 1st defendant has signed several blank papers and the plaintiff must have filled up those blanks to claim the exorbitant interests. According to the 1st defendants, the interest claimed is excessive and the 1st defendant sold the vehicle and paid a sum of Rs.75,000/- to the plaintiff on 28.9.1999. Hence, the defendants disputed the liability. 5. Based on the above pleadings, the trial Court framed the following issues:- 1. Whether the plaintiff is entitled for a sum of Rs.3,07,711/- as per the Hire Purchase Agreement? 2. To what other relief, the plaintiff is entitled to? 6. The learned trial Jude, decreed the suit with interest at the rate of 36% till the date of realisation. Aggrieved over the same, the present appeal came to be filed. 7. It is the only contention of the learned counsel for the appellants/defendants that since the interest awarded by the learned trial Court is very excessive, the same may be reduced. Aggrieved over the same, the present appeal came to be filed. 7. It is the only contention of the learned counsel for the appellants/defendants that since the interest awarded by the learned trial Court is very excessive, the same may be reduced. It is the further contention of the learned counsel that the respondent/plaintiff, in similar appeal, i.e. A.S.No.808 of 2009, agreed for reduction of interest at the rate of 6% p.a. from the date of decree. Therefore, the learned counsel prays that the interest may be reduced to 6%. 8. There is no representation for the respondent. 9. The only point for consideration in this appeal is as to whether the interest awarded by the trial Court is exorbitant and the same is liable to be reduced. 10. Admittedly, the trial Court, as per the terms agreed in Hire Purchase Agreement, while decreeing the suit, has awarded interest at the rate of 36%. The borrowal of loan amount for purchase of Ambassador Car and executing Hire Purchase Agreement is not disputed by the appellants/defendants. The Hire Purchase Agreement is marked as Ex.A3. Clause 10 of the aforesaid agreement indicates that in default in regular instalments, 36% interest shall be payable to the financier. 11. It is also not in dispute that 16 instalments have been paid regularly by the appellants/defendants. The vehicle, namely, Ambassador Car, purchased by the 1st defendant, was also sold and a sum of Rs.75,000/- also paid to the plaintiff. Originally, the balance repayable amount towards loan is only a sum of Rs.1,38,800/-. A sum of Rs.1,75,000/- paid by the appellants/defendants in 16 instalments is admitted by the plaintiff. Apart from the aforesaid balance amount of Rs.1,38,800/-, a sum of Rs.1,67,900/- is also claimed towards additional finance charges. Thus, suit has been filed claiming a sum of Rs.3,07,711/-. 12. Even though 36% interest is agreed to be paid by the appellants/defendants in the Hire Purchase Agreement, taking note of the fact that Hire Purchase Agreement was entered in the year 1996 and the fact that 16 instalments were regularly paid by the 1st defendant and the subject vehicle was also sold and thereby, some amount has been paid to the plaintiff and that the rate of interest has been reduced by the RBI from time to time, this Court is of the view that the interest awarded by the trial Court is liable to be reduced. 13. Further more, since the defendants also agreed for reduction of interest at 6% in similar matter, i.e., in A.S.No.808 of 2009, wherein the 1st appellant herein was also arrayed as 2nd appellant, I am inclined to reduce the interest at 6% p.a., from the date of decree till the date of realisation, instead of 36% as awarded by the Trial Court 14. Accordingly, the judgment and decree dated 23.12.2003 passed by the trial Court is hereby set aside in respect of the interest portion alone. Except the above modification, the finding of the trial court in respect of other aspect is confirmed. In the result, the appeal is allowed to the extent indicated above. However, there shall be no order as to costs. Consequently, connected miscellaneous petition is closed.