Punjab-Haryana High Court
S.M. Enterprises vs State Bank Of India on 23 July, 1991
Equivalent citations: [1994]80COMPCAS133(P&H)
Author: Ashok Bhan
Bench: Ashok Bhan
JUDGMENT Ashok Bhan, J.
1. The present revision petition has been filed against the order of the executing court whereby the objections filed by the petitioner-judgment-debtor were ordered to be dismissed. The facts giving rise to the present revision petition are as under :
2. The respondent, State Bank of India, Badarpur, New Delhi (for short "the decree-holder") filed a suit against the petitioner-judgment-debtor (hereinafter referred to as "the judgment-debtor") on July 27, 1984, seeking a decree for recovery of Rs. 3,71,396.24 along with future interest at the rate of 13 1/2% per annum from the date of suit till realisation. In order to get this loan, the judgment-debtor mortgaged a plot of land belonging to him along with the deposit of the title deeds as a collateral security. The suit was decreed on November 8, 1986, and the executing court ordered the recovery of Rs. 3,71,396.24 with costs and interest at the rate of 13 1/2% per annum from the date of suit till the realisation of the amount.
3. The bank-decree-holder filed an execution application in which the judgment-debtor filed several objections. On August 5, 1989, counsel for the judgment-debtor made a statement that talks of compromise are going on and that the judgment-debtor be given some time and, in case of failure to settle the dispute, then the judgment-debtor would not press his objections against the execution of the decree. The judgment-debtor failed to settle the amount with the decree-holder and, therefore, in view of the statement made by learned counsel for the judgment-debtor, the objections filed by the judgment-debtor were dismissed on August 8, 1989. The judgment-debtor filed the present short objection petition under Section 47 of the Code of Civil Procedure (for short "the Code"), wherein several objections were taken but the only objection pressed before the executing court was that the decree had been passed by the court without determining the principal amount on which interest could be levied so as to arrive at the actual amount on which interest could be levied and, therefore, the decree in execution was not enforceable in law. This objection of the judgment-debtor was dismissed by the executing court primarily on two counts, i.e., (i) that the objections filed by the judgment-debtor had already been dismissed earlier, i.e., on August 8, 1989, on the basis of the statement made by counsel for the judgment-debtor, and (ii) the principal amount had already been determined by the trial court while passing the decree on the basis of the settled law that banks compute the interest at quarterly rests and after every quarter adding interest to the last balance and treating the same as the principal sum for the next quarter for computing interest. Accordingly, in the present case, the principal sum had been rightly arrived at by the trial court while passing the decree.
4. Learned counsel for the judgment-debtor has argued that the trial court, while passing the decree, did not determine the principal amount correctly and further that the court could not grant compound interest and, for this purpose, he has relied upon a judgment of this court in Makhan Singh v. Union Bank of India [1989] 1 PLR 703 ; [1991] 1 BC 327. Learned counsel appearing for the judgment-debtor has further argued that the executing court could go into the question regarding the rate of interest. In Smt. Usha Sachdeva v. Life Insurance Corporation of India [1991] ISJ (Banking) 233 ; [1991] 2 BC 137, J.V. Gupta C.J. at a later stage, had an occasion to consider this judgment and, under somewhat similar circumstances, held as follows (at page 137 of [1991] 2 BC) :
" Learned counsel for the petitioners submitted that future interest could not be allowed more than 6 per cent, on the decretal amount and in support of the contention relied upon Makhan Singh v. Union Bank of India [1990] ISJ (Banking) 95 ; [1991] 1 BC 327. On the other hand, learned counsel for the decree-holder submitted that the interest is to be calculated under Order XXXIV, Rule 11 of the Code and that being so, the provisions of Section 34 of the Code as such were not applicable to the suit based upon a mortgage. Reliance in this behalf was placed on State Bank of India v. Neeru Plastics [1984] PLR 382 ; AIR 1984 P & H 209.
After hearing learned counsel for the parties, I do not find any merit in this revision petition.
Admittedly, the suit was filed for the recovery of the amount on the basis of the mortgage deed for a preliminary decree under Order XXXIV, Rule 4 of the Code. Order XXXIV, Rule 11 of the Code, inter alia, provides that in any decree passed in a suit for foreclosure, sale or redemption, where interest is legally recoverable, the court may order payment of interest to the mortgagee as provided therein. Thus, the provisions of Section 34 of the Code are not attracted to such a suit. Moreover, the decree was passed on the basis of the admission made by the defendants before the trial court and, therefore, this objection was no more available to him in execution proceedings."
5. I am in respectful agreement with the view taken in Smt. Usha Sachdeva's case [1991] ISJ (Banking) 233. The judgment-debtor had mortgaged his plot with the decree-holder as collateral security by deposit of the title deed. Order XXXIV, Rules 4 and 11 of the Code, inter alia, provide that, in any decree passed in a suit for foreclosure, sale or redemption, where interest is legally recoverable, the court may order payment of interest to the mortgagee as provided therein. Thus, the provisions of Section 34 of the Code are not attracted to such a suit and the court had rightly determined the principal amount and the amount of interest payable thereon as agreed to between the parties.
6. For the reasons recorded above, I find no merit in this revision petition and the same is dismissed. Since none appeared for the respondent, there will be no order as to costs.