Kerala High Court
Indian Bank, Represented By Its Zonal ... vs Kaniampuram Brothers Clock ... on 30 July, 2002
Author: K. Padmanabhan Nair
Bench: K. Padmanabhan Nair
JUDGMENT Sankarasubban, J.
1. This appeal is filed by the Indian Bank against the judgment and decree in O.S. No. 326 of 1988 of the Principal Sub Court, Ernakulam. The suit was filed for realisation of money by the appellant Bank. First defendant is a partnership Firm and defendants 2 to 5 are partners. First defendant has been enjoying various facilities with the plaintiff to the extent of Rs. 4 lakhs. Defendants 1 to 4 executed pronotes and availed loan of Rs. 1 lakh for the partnership business. Another demand pronote was also executed by them on 17.11.1976 for Rs. 1,50,000/-. Defendants deposited title deeds of their property with the plaintiff and created equitable mortgage in respect of plaint A schedule properties. As on the date of the suit, Rs. 2,95,342.72 was the amount due to the plaintiff.
2. Defendants 1 to 4 filed a joint written statement. Defendants 5 to 8, 9, 10 and 11 remained ex parte. According to defendants 1 to 4, the amount as shown in the plaint is not correct. Interest claimed is excessive. Defendants 1 to 5 are partners of the first defendant Firm and they are also the legal representatives of deceased K.M. Joseph. Defendants 6 to 8 are not residing with the fourth defendant. They are married and are residing with their husbands in various places. The 10th defendant is the mother and the 11th defendant is in Italy staying in a convent and is a nun. There is no proper service on the above defendants. Excess amount is claimed by the plaintiff.
3. On the basis of the written statement, the court below raised three issues. The first two issues were with respect to the above amount due to the plaintiff with interest. The court below found that the loan transaction was proved. Hence, a decree was passed as follows: The plaintiff can realise future interest at 17% for the principal amount of Rs. 1,50,000/- from the date of suit till the date of decree and at 12% thereafter till realisation. Six months time was granted for payment. On default to pay the amount within the stipulated time, the plaintiff was at liberty to apply for the sale of the plaint schedule properties.
4. The Bank has come up in appeal, as it is aggrieved by the decree of the court below with regard to the interest pendente lite and future interest only on the amount of Rs. 1,50,000/- and not on the principal amount. Learned counsel for the appellant Sri. Easwaran brought to our notice the decision of the Supreme Court reported in Central Bank of India v. Ravindra and Ors. - A.I.R. 2001 Supreme Court 3095, and particularly referred to paragraphs 55 and 58, which shows that the principal amount to be treated as the original amount which is actually due n the date of filing the suit. Then he contended that on the date of filing the suit, the amount was Rs. 2,95,342.72 and this is the amount on which interest has to be awarded pendente lite and future interest. Even though learned counsel for the respondents tried to argue that this is not correct, on the basis of the decision of the Supreme Court supra, we hold that interest has to be granted on Rs. 2,95,342.72. But learned counsel for the respondents submitted that if the principal amount is altered, then the interest granted by the court below has to be altered, because the court below granted interest only on Rs. 1,50,000/- and not on the principal amount is Rs. 2,95,342.72.
5. It is true that under Section 34 of the Code of Civil Procedure, the court has got power to grant higher rate of interest during pendente lite for a commercial transaction. But the court has got ample discretion regarding the changing of interest.
6. Before we go into this aspect, we refer to the preliminary objection by the counsel for the appellant stating that the defendants cannot now ask for change of interest during the pendency of the suit, since no cross appeal has been filed. First of all it is a discretion of the court to grant interest. Further so far as the respondents are concerned, they are satisfied with the interest granted by the court because the principal amount was adjudged at Rs. 1,50,000/-. If that amount is changed for the interest, the respondents can argue that the interest should be reduced. Further we hold that under Section 34 of the Code of Civil Procedure, the court has got power regarding grant of interest on the principal amount. As per the aforesaid decision of the Supreme Court, the court can desist from charging any interest. The contract between the parties shows interest at the rate of 17% and any other interest as prevalent. Nothing was brought to our notice regarding the current rate of interest. According to us, a uniform rate of interest during the pendency of the suit till date of recovery will be highly reasonable.
7. Hence, we modify the judgment and decree of the court below as follows: The plaintiff is given a decree of Rs. 2,95,342.72. The plaintiff is also awarded interest at 9% per annum on the principal amount of Rs. 2,95,342.72 from the date of filing the suit till date of recovery.
Appeal is disposed of as above. No costs.