Karnataka High Court
N Subramanyam vs Corporation Bank on 1 April, 2010
Bench: N.Kumar, V.Jagannathan
'A'BA'r«iGALQRE #3
IN THE HIGH COURT OF KARNATAKA. BANGALORE
DATED THIS THE 1st DAY or APRIL. 20
PRESENT
THE HON'BLE MR.JUsT1cE u k
AND
THE HON'BLE MR.JUSTICE
R.F.A. N01 2005
BETWEEN
1. N.sUB'«RAM--ANYAM, I .
HINDU, _ "
No.52,;'4'm_cR0ss, *
MALLESWARAM '
BANGALC)RE--3;;; "
2. W3 P'iJsE1PA.ER1NTERs _ '
A PRO_PRT1ETOR'-CONCERN OF
SRI.N.S--EJBRAMA§\*Y'AM;
No.52, 4TH. CROSS;
. APPELLANTS
* "{BY sii>;1;sA;E:i{;Vv.c1~iA1,APA*ITiY, SI-{COUNSEL}
'CQRPORATION BANK.
' *A_BANK1NG co. GOVERNED BY THE
"PROVISIONS OF BANKING COMPANIES
. _f{AcgU1s1T10N AND TRANSFER OF
UNDERTAKINGS) ACT 1980 HAVING
ITS H.O. AT MANGALORE AND ONE
AMONGST ITS VARIOUS BRANCHES AT
A.P.M.C.YARD, YESHWANTHAPUR
lap,/A'
BANGALORE. REP. BY ITS MANAGER
AND GPA HOLDER SRI.U.S.BALWALLY. V.
..RESPONDENT_
{BY SR1.V.B.RAVISH.ANKAR, ADV.)
THIS RFA IS FILED 11/8 96 CPC--*'AG}xINE§1'«.T'HEi~«..
JUDGMENT AND DECREE DATED" '1;9.2o04.«. PASSED.' 11-:
0S. NO.3380/1994 ON THE FILE or rm}: 'ADEL,_C1.TY'
CIVIL & SESSIONS JUDGE, BANGALORE *~.,[CC'1:I:30};.
DECREEING THE SUIT F'ORRECOVERY'OF 1~_..rors;EY. '
TI-IIS RFA COMING oN._FQR FENAL DISPOSAL
THIS DAY, *D.ELIVE--R'ED THE
FOLLOWING: :
----
It isgd challenging the judgment and has decreed the suit of the Ap1antiff¥B.anfkd.With4interest of 21% from the date of Suit till 'date of relaisation. purpose of convenience, the parties are retferredt tofas they are referred to in the Original Suit. 'Defendant No.1 the proprietor of the 21516 defendant hcfoncern opened a current account in the plaintiff Bank 2 "hearing Account No.168 with an Initial deposit of RS.2,000/-- on 11.5.1991. After operating the account 1/ for sometime, he started over drawing without getting the TOD sanction by the competent Officer plaintiff Bank. One Ganesh Kaduva was ' during the said period. He was.involifégifinlilsefiferalii"
fraudulent deeds, Inis approprizationgl " loft '~ . _ bank, falsification of aecourit:s:~~._gAfte'r wasp' detected after an 'audit, on 25.5.1992. Thus oveurdraA\Vrv'i1ig"V1'V)y without the same account of the assistance -manager. Therefore, the was a collusion betweernthe the said manager. On the day the:.Bank4'rea1is»e.d these transactions, the 181 defendant f oiierdrawn {sum of Rs.58,812/~ as on 4.5.1992. 1 tiiey contended that as no documents were takenfrorn: the 15* defendant, there was no written ..agreen1ent and in those circumstances they charged interest on the aforesaid amount outstanding, "Which was prevailing rate of interest at the relevant time in respect of commercial transactions. They called upon E/to the defendant to pay the aforesaid amount all amounting to Rs.1,20,705/-. The defendant_.:d_id'.,i_i1ot repay the money. Therefore, the constrained to file a Suit for: rrecoveryfuu amount.
3. After senric§ defendants entered appearance, statement. He denied ll/lanager of the as alleged. He contended' oyerdrawn any amount from his currpentf disputed the entries in the ledger _accé)uVIitS..' .'Heév.a_1so denied the creation of an ~rnortgage by deposit of title deeds and for dismissal of the Suit. On the aforesaid~.Ap'leadings, the trial court has framed as many i. =a3__49 issues. To substantiate the claim, plaintiff-Bank '7.e'Xainir3.ed its Manager as PW-l and produced 202 if "documerrts marked as Exs.P1 to P202. Defendant did not enter the witness box or produced any evidence. The trial Court on appreciation of the oral. and documentary evidence on record held defendants have overdrawn the amount. T has created an equitable rnortgageéas it suit amount. The accounts Bank are all true and correlct~..iandV" that.V_d'efé'ndar1t hast overdrawn a sum Vof..xRs.E58';8.l:2 ItlllaisoA'*'§he1d the defendant is liable to 13.3. on the aforesaid of1A__Rs€. it decreed the suit of 21% from the date of suit tilllthe' radiate l jg. ..4_ lbylvthe Judgment and decree of the l court, defendant IS in appeal. learned Szzcounsel submits that this appeal is confined only to a claim with regard to the ..intere'st charged at 21%. He submitted that there is no l ""._VVWritten agreement between the parties. It is the case of it " "the plaintiff that equitable mortgage was created as security for the sum overdrawn by the ISA defendant, %/ and therefore Order 34 Rule 11 CPC is attracted to the facts of the case. In the absence of any between the parties regarding rate of mortgage suits, interest chargeable is'.V.46°/'o4_'_}aIid'éV' therefore, he submits the award inlterestv anterior to the date of "cur1'ent: a~n"d*;{uture""
interest at that rate._is i}l'ega_I-- and contrargz to the aforesaid statutory provlisioiisi; Qofltra, learned counsei for the«the_'irnpugned judgment and decree.
-In aforesaid contentions and the facts of thisl case, the ptrints that arise for consideration .- V. p_ in this appeal "are,___-its under:
:p'«vr.«\:'T'\r'i:1_ether the trial court was justified in the suit in a sum of ' -.lAi§'.s.61,893/w which represented the interest at 21% on the principal amount of Rs.58,812/~?
11) Whether the trial court was justified in granting current and future interest at 21% p.a. '?
POINT NO.I:
In the light of the aforesaid material, dispute that the defendants had availed ., from the Bank where they had They had withdrawn the' to Rs.58,812/-. There is no is no contract entered into andtherefore, there is no the rate of interest ioirerdrawn. In the facts of was found that the Manager: 'benefit of this facility to defendarit._4comrnitte.d" and on revelation of fraud, covrtimitted st.ii'c'ide__,___the trial court was of the View that ' -is liable to pay interest at 21% even in the absence written contract as that was the prevailing rate of interest. If 21% is the rate of interest "ii prevailing at that point of time in the facts of this case. file would not have interfered with the order of the trial court but while discussing the prevailing rate of interest at page No.18, the court records a finding that 15.5% A/ V" meification.
-8- was the prevailing rate of interest at that point of__ time. If the Bank had claimed at 21% interest, ..ir:.e:'t.h'ese circumstances coupled with the fact commercial transaction, we arertofethe ViewT.'that:~_the 2 interest caicuiated on the is without any basis, on side be" i reduced to 15.5%. ',Fh.erefore', éiaim insofar as the agreed interest the basis of 15.5% interes't::or».-- aaabyi¢a:¢u1aung the tota} interest added to the principal which adjudged in the suit for current and future interest.
To that e;i&Lent'vthe."-deicree of the trial court requires Charging current and future interest is governed V. nbj,r_Or(ier 34 Rule 11 CPC when there is no written flcontract between the parties insofar as award of interest it concerned. In those circumstances, it is left to the court to charge interest as the court deems fit. In the absence of any agreement interest at 12% would be reasonable and therefore, the awarding of thej'cLujrre--t1t and future interest at rate at 21% also reqiiires'.v:.t'0lé interfered with.
In the result, we pass the A The appea}. is allQjsA7ved'.tiii a..'.l"heftfi;Idg*ri§'3.ent and decree is modified as
1) interest at 15.5% 'date of the Suit.
sum adjudged i.e. (+] interest thereon at date of the Suit, the plaintiff entitled to current and future at 12% p.a.
iii)' -.:'Pa1ties to bear their own costs. ea/wt Eaii Ed};-'\ §§§§E, ln.