Punjab-Haryana High Court
Iron Master (India) Pvt. Ltd. vs Punjab National Bank on 19 November, 1998
Equivalent citations: (1999)121PLR379
Author: Swatanter Kumar
Bench: Swatanter Kumar
JUDGMENT Swatanter Kumar, J.
1. Hindustan Commercial Bank Limited had filed this suit for the recovery of Rs. 7,44,023.10 paise. Subsequently the bank was amalgamated with the Punjab National Bank. Defendant Company had taken financial assistance loan from the plaintiff bank. As it defaulted to repay the amount, the bank filed the suit for recovery of the interest claiming that agreed rate of interest was 19.5% per annum which was subsequently 17.5% per annum with quarterly rests. For taking the said loan, the defendants had signed the promissory notes for Rs. 30 lakhs, letter of waiver, agreement for Rs. 30 lacs in favour of the bank with the aforestated rate of interest. In June and September, 1985 the bank was approached by the defendants that they were ready to pay full and final payment including interest as on 1.7.1985 for a settlement of Rs. 6,40,997.60 paise. The property was also mortgaged. Consequently, the bank prayed for preliminary decree under Order 34 of the Civil Procedure Code and there after claimed pendente lite and future interest at the rate of 17.5% per annum.
2. The suit was contested. On the pleadings of the parties the learned trial Court framed as many as 12 issues and after affording reasonable opportunity to the parties, passed a decree for a sum of Rs. 7,44,023.10 paise, reduced by the amount of Rs. 5,39,173.60 paise as already paid, with pendente lite and future interest at the rate of 17.5% per annum vide judgment and decree dated 16.12.1994. This was assailed unsuccessfully in appeal by the appellant. The learned first appellate Court vide its judgment dated 26.5.1998 dismissed the appeal with costs, thus, giving rise to the present regular second appeal.
3. It is contended by the learned counsel for the appellant that no proper authority/empowerment with the person to sign the plaint and file the suit was proved on the record in accordance with law. In this regard he made a reference to the statement recorded of PW5 and the copy of resolution Ex.PW5/1. The contention does not have any element of merit. The resolution duly authorised the person concerned to institute the suit on behalf of the bank and sign the pleadings. That is the precise reason as to why the learned Courts below have concurrently returned finding on issue No. 1 against the present appellant. In any case in view of the principles laid down in the recent judgment of the Hon'ble Supreme Court of India, in the case of United Bank of India v. Naresh Kumar and Ors., A.I.R. 1997 Supreme Court 3, the objection merits rejection.
4. The other contention raised by the learned counsel for the appellant is that the learned Court could not have granted the interest at the rate of 17.5% per annum, pendente lite and future interest as the suit was governed under the provisions of Section 34 of the Code. For this purpose he relied upon the judgment of the Hon'ble Supreme Court in the case of N.M. Veerappa v. Canara Bank, (1998-1)118 P.L.R. 503 (S.C.). It is plain misreading of the judgments of the Hon'ble Apex Court by the appellant. It has been specifically held in this judgment that the suits where the question of mortgage is involved will be governed by the contract between the parties and the question of interest would have to be in accordance with the provisions of Order 34 Rule 11 of the Code and not Section 34 of the Code. In this regard reference can be made to paragraphs No. 17 and 18 of the judgment. However, the Hon'ble Supreme Court has come to the conclusion that awarding of 6% interest by the Courts below in that case was not improper and declined to interfere. That is not the case here. Keeping in view the facts and circumstances of the case as well as the conduct of the appellant the Court came to a concurrent conclusion that interest at the rate of 17.5% per annum was justified in terms of the contract between the parties and provisions of Order 34 Rule 11 of the code. I see no reason to interfere in this conclusion of the Courts below.
5. Lastly the learned counsel raised the plea of limitation that the suit was barred by time. The issue has been rightly answered by the learned Courts below against the defendant. Firstly, there was a clear admission of liability in September, 1985 and thereafter the suit was admittedly filed within a period of 3 years. Further more, the first Appellate Court has also rightly concluded that it was a case of equitable mortgage and, thus, the limitation would be 12 years and even from that point of view the judgments of the learned Courts below do not call for any interference.
6. In view of the above discussion, I am of the considered view that this appeal has no merit, which is sought to be dismissed at the limine stage itself. Consequently, the appeal is dismissed in limine without any order as to costs.