N M VEERAPPA Vs. CANARABANK

JUDGEMENT

(1.) Leave granted.

(2.) The appellant (Managing Partner) is the 2nd defendant in the suit. The 1st respondent-Bank filed a suit O. S. 101/1980 based on mortgage for recovery of Rs. 7,82,881.78 against M/s. Shiva Rice Industries (a partnership firm) (1st defendant), the appellant (defendant 2) and defendants 3 to 10 (partners) on the file of the Principal Civil Judge, Shimoga. These defendants had taken a loan of Rs. 5 lakhs on 7-4-1976 agreeing to repay in 52 monthly instalments each of Rs. 8000/- from 7-4-1977 with interest at the end of each quarter. The plaint schedule properties were offered as security and an equitable mortgage was created as per Ex.P.4 by deposit of title deeds. The defendants paid Rs.75,000/- on 6-11-1984, Rs. 40,000/- on 21-12-1984, Rs. 15,000/- on 22-1-1985, Rs. 20,000/- on 8-7-1985 and Rs. 10,000/- on 14-11-1985 in all Rs. 1,60,000/-. The trial court passed a preliminary mortgage decree on 4-7-1982 with proportionate costs but the decree-holder Bank was directed to file a fresh memo of calculation calculating the interest on the balance of principal amount due at 16.5% per annum from the date of the equitable mortgage at yearly rests till date of suit. The amounts paid after suit by the defendants were to be deducted as on the respective dates of payment and interest was to be paid as per judgment and these figures were directed to be computed. It was further directed, so far as future interest from date of suit was concerned, as follows:- "The plaintiff is entitled to future interest from the date of suit at 6% per annum on the principal amount due from the defendants till date of recovery of full amount". In other words, future interest from date of suit was to be only 6% per annum and not at the contractual rate of 16.5%. The plaintiff bank filed an appeal in the High Court as Regular First Appeal No. 1 of 1988 and a learned single Judge of the High Court allowed the appeal and held that the plaintiff was entitled to future interest also at the contractual rate of interest of 16.5% from date of suit till date of realisation with costs because of Section 34, CPC. However, the defendants could, if they so desired, move the Circle office of the Bank for reduction of this rate of interest and it would then be for the Bank to consider it favourably but in accordance with law.

(3.) Against the abovesaid judgment of the High Court, this appeal has been preferred by the Managing Partner, the 2nd defendant contending that the High Court erred in interfering with the discretion exercised by the trial Court in so far as pendente lite interest was concerned.