Supreme Court of India
Bank Of Baroda vs Jagannath Pigment & Chem. And Ors. on 21 September, 1994
Equivalent citations: (1996)112PLR193, 1996(5)SCALE38A, (1996)5SCC280, AIRONLINE 1994 SC 83, 1996 (5) SCC 280, (1996) 1 PUN LR 193, (1996) 3 CIV LJ 699
Bench: A.M. Ahmadi, R.M. Sahai
ORDER
1. Intervention applications are dismissed.
2. The appellant-bank had filed a suit to recover a sum of Rs. l,66,759-29p with interest and costs. The suit was decreed for the said amount with proportionate cost. Future interest was awarded at the rate of 131/2 per cent per annum on the said amount of Rs. l,66,759-29p from the date of the suit till payment or realisation. Against the said decree the borrower preferred an appeal, First Appeal No. 364/86, in which one of the contentions raised was that the bank was not entitled to claim compound interest and convert the principal sum claimed as inclusive of interest and that the Court was not justified is granting future interest on the said principal sum - adjudged. The High Court accepted the contention and modified the decree in that it held that future interest should be calculated on the sum borrowed, vis., Rs. l,20,675-59p and not the principal sum - adjudged i.e. Rs. l,66,759-29p. Counsel for the appellant-bank states that this approach of the High Court runs counter to this Court's decision in Corporation Bank v. D.S. Gowds 1994(3) SCALE 46. The respondents though served have not chosen to enter an appearance and contest this appeal.
3. The premise on which the High Court based its impugned decisions no longer holds the field in view of the decisions in Corporation Bank. Therefore, the said decisions of the High Court must be reversed and the decision of the Trial Court restored. The appeal is allowed accordingly with no order as to costs.