SMT. JAMUNA AND ORS. Vs. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, THE MAHILA CO-OPERATIVE BANK LTD., REP. BY ITS GENERAL MANAGER AND JAYARAMU

JUDGEMENT

(1.) THIS writ petition is filed challenging the judgment dated 22.08.2013 passed by the Karnataka Appellate Tribunal, Bangalore, dismissing Appeal No. 256/2007 filed by the petitioner and confirming the order passed by the Joint Registrar of Co -operative Societies, Arbitration Dispute, Bangalore. The 2nd respondent - Mahila Co -operative Bank Ltd., Vijaynagar, Bangalore, filed a dispute before the Joint Registrar against the petitioners herein seeking an award for a sum of Rs. 16 lakhs with interest, urging that the said amount reflected the principal and interest accrued thereon which was the result of the loan advanced in favour of the petitioners herein for the purpose of construction of school building. It was contended by the 2nd respondent -Bank before the Joint Registrar that the loan agreement entered into between the petitioner and the bank stipulated for payment of 15% interest and in default of payment of installments, additional -2%, penal interest was provided for. This document was produced and exhibited as Ex. P -6(a) before the Joint Registrar. The document evidencing the execution of an equitable mortgage by deposit of title deeds was also produced before the Joint Registrar by the Bank.

(2.) BASED on the agreement and the document evidencing deposit of title deeds, the Joint Registrar passed an order on 20.03.2007 holding that the petitioners had indeed availed loan of Rs. 16 lakhs by mortgaging their immovable properties and that they had defaulted in discharging the loan, in as much as, they were in arrears in a sum of Rs. 15,48,742/ - and that they were liable to pay the said amount along with interest at 17.5% with costs of the proceedings. This order was challenged in appeal before the Tribunal.

(3.) MR . Krishnappa, learned Counsel for the petitioner, at the outset, submits that there is no such agreement reached between the parties, wherein 2% additional interest over and above 15% is agreed to be paid by the petitioners to the respondent -Bank. He further places reliance on the judgment of this Court in the case of The Sangli Bank Ltd. Vs. Chandrashekar Channabasappa Karchi & Others - : ILR 2005 KAR 5142, to contend that when the loan is not availed for commercial purpose, interest cannot be levied at 17%.