Punjab-Haryana High Court
M/S. Jagdamba Rice Mills And Others vs Oriental Bank Of Commerce, Karnal on 6 February, 1989
Equivalent citations: AIR1990P&H60, [1992]73COMPCAS464(P&H), AIR 1990 PUNJAB AND HARYANA 60
ORDER
1. This revision petition is directed against the order of the executing Court dt. Sept. 28, 1988, whereby the objection petition filed by the judgment-debtors was dismissed.
2. A decree for a sum of Rs. 5,53,328.44 with costs was granted in favour of the plaintiff Bank. The plaintiff Bank was also allowed interest at the rate of 13 1/2 per cent. per annum from the date of the filing of the suit till the date of recovery and also future interest at the same rate from the date of the decree till realisation of the decretal amount. It was also ordered that the decretal amount can also be recovered by sale of properties lying mortgaged and hypothecated with the plaintiff Bank. When the execution was sought, objections were raised inter alia that as per the provisions of S. 34, C.P.C. (hereinafter called the Code), interest from the date of the decree till realisation should not have been allowed at the rate of more than six per cent, per annum on the principal amount and that compound interest could not have been allowed. The decree-holder was entitled only to the future interest on the principal amount which according to the judgment-debtors was Rs. 5,43,674.50 and not on the decretal amount, i.e., Rs. 5,58,328.44. It was contested on behalf of the decree-holder. The executing Court found that the interest at the rate of 13 1/2 per cent, from the date of filing of the suit till the date of payment would be charged as simple interest and not as compound interest. It was further found that prior to the institution of the suit, as per the agreement between the parties, compound interest was being charged by the Bank and the whole amount due from the defendants on the date of filing of the suit would become the principal amount on which pendente lite and future interest is to be allowed.
3. The learned counsel for the judgment-debtors petitioners submitted that from the decree-sheet, it is evident that the principal amount is Rs. 5,43,674.16 and, therefore, the future interest of 13 1/2 per cent, will only be on that amount and not on the principal amount, as per the provisions of S. 34 of the Code. According to the learned counsel, if the decree was against the said provisions, the executing Court was competent to go into the matter. In support of the contention, the learned counsel relied upon Shri Chand v. Central Bank of India, Yaminanagar, (1988) Cur LJ (Civ & Cri) 547 and Food Corporation of India v. Samana Co-operative Markeging-cum-Pro-cessing Society Ltd. Samana Mandi, (1987) I Cur LJ (Civ & Cri) 778.
4. On the other hand, the learned counsel for the decree-holder submitted that under S. 34 of the Code, future interest could be allowed on the principal amount as adjudged by the Court while passing the decree. In the present case, the decretal amount was adjudged to be the principal amount and, therefore, interest at the rate of 13 1/2 per cent. per annum has been rightly allowed by the Court while decreeing the suit. The learned counsel also referred to S. 21 of the Banking Regulation Act to contend that the rate of interest could not be challenged on the ground that it was excessive. As regards the principal amount adjudged, the learned counsel relied upon State Bank of India v. Avtar Singh, (1986) (1) 89 Pun LR 321 : (AIR 1986 Punj & Har 381), to contend that the principal amount found due not only means the principal amount, but also the amount due on interest which has become part of the principal.
I have heard the learned counsel for the parties and have also gone through the case law cited at the bar. 1 do not find any merit in this revision petition.
5. The defendants suffered ex parte decree in spite of service and they never challenged the same. The trial Court decreed the suit with future interest in the following terms:
"I, therefore, accept this suit with costs and pass a decree in favour of the plaintiff and against defendants 1 to 4 for the recovery of Rs. 8,58,328.44. The plaintiff is also allowed interest at the rate of 13 1/2 per cent per annum from the date of the filing of this suit till the date of the decree and future interest at the same rate from the date of the decree till the realisation of the decretal amount."
6. That being so, it could not be success fully argued by the learned counsel for the judgment-debtors that the principal amount was Rs. 5,43,674.16. At the time of the passing of the decree, the total amount was adjudged to be the principal amount and, therefore, the plaintiff Bank was rightly given interest thereon at the rate of 13 1/2 per cent.
per annum. Moreover, the amounts sought to be realised by the Bank from the defendants are given from time to time in the notices issued by it and, therefore, the principal amount found due not only means the principal amount as such, but also the amount due on interest which has become part of the principal amount as per the calculations of the Bank.
7. In this view of the matter, this revision petition fails and is dismissed with costs. At the time of the motion hearing, the execution of the decree was stayed. The parties are, therefore, directed to appear before the executing Court on Feb. 24, 1989, for further proceedings.
8. Revision dismissad.