UNION BANK OF INDIA DHARWAD Vs. PARASURAM

JUDGEMENT

(1.) ON the claim made for a sum of Rs. 30,203. 65 with interest @ rs. 21% per annum by the respondent, who was plaintiff in O. S. No. 51/1992 on the file of the Court of Munsiff at Navalgund, the Appellate court/iii Additional Civil Judge (Sr. Dn) at Dharwad held in R. A. No. 19/1997 that he is entitled to a sum of Rs. 16,244/- with interest @ rs. 18% per annum from the date of suit to till this realisation, though the Trial Court had dismissed his suit. Hence, aggrieved by the said judgment and decree passed by the Appellate Court, the appellant, who was defendant in said suit and respondent before the first appellate Court, has approached this Court by way of second appeal.

(2.) WHILE admitting the appeal on 31. 8. 1999, this Court framed following substantial question of law for decision:- Whether the Lower Appellate Court was justified in granting interest @ 18% p. a. on the amount found due when the rate of interest that was agreed to be paid on such deposit was stated to be only 6% p. a. as per Clause (5) of the ?appointment as bank?s authorised agent for collection of Mini Deposit? as per ex. D. 1 which was alleged to have been issued by the appellantbank to the respondent/plaintiff, at the time of his appointment??

(3.) HEARD argument. According to the learned Counsel for appellant/defendant, the appellate Court was wrong in awarding interest @ Rs. 18% per annum as against the agreed rate of interest i. e. 6% per annum, more so, when the transaction was not a commercial transaction. On the other hand, the learned counsel for the respondent/plaintiff, relying on a Division Bench decision of this court and a decision of the Apex Court submitted that the rate of interest to be awarded in a money suit is within the discretion of the court and the Appellate Court has rightly exercised its discretion giving reasons as to why the plaintiff is entitled to interest @ Rs. 18% per annum and consequently, there is no infirmity in the impugned judgment and decree. Perused the records carefully.