CANARA BANK Vs. B SESHAGIRI PRABHU

JUDGEMENT

(1.) This appeal is by the plaintiff, Canara Bank, which has succeeded in the suit but is aggrieved by the disallowances of costs and the limiting of current and future interest to 6% per annum. In the suit O.S. 44/78 the Civil Judge at Kodagu, by his judgment and decree dated 23-2-1981, decreed in entirety plaintiff's main claim for the recovery of 2,47,739-50, but declined costs to the successful- plaintiff and also awarded pendent- elite and 'further' interest at 6 per cent per annum.

(2.) On 21-7-1975 plaintiff had advanced a loan of Rs. 1,70,000/- on interest at 16 per cent per annum to defendant-1 to enable the latter to purchase a passenger Bus to be used as a contract carriage This Advance is stated to represent 75 per cent of the cost Accordingly, in the month of October 1975, defendant-1, with the aid of funds lent by the Bank, acquired a Bus No. APQ 6479 to operate it as a contract carriage vehicle. The bus was hypothecated to the plaintiff- Bank as security for the loan. Defendants-2 and 3 were co-obligants. How ever by the operation of the Karnataka Contract Carriages (Acquisition) Act, 1976 (Karnataka Act No. 21 of 1976) the Bus stood acquired by and vested in the State of Karnataka defendant-4. Free from all encumbrances and was taken possession of by defendant-4 on 31-1-1976. Defendant-1. it would appear had paid the stipulated instalments upto 31-1-1976, but after the acquisition of the Bus made no further payments, According to the averments in the plaint plaintiff- Bank that limitation was running out and defts.-1 to 3 had declined to acknowledge the debt. On the date of the suit the amount due towards the principal and interest was stated to be Rs.2,47,739-50.

(3.) Defendants-1 to 3 contested the suit. One of the defences was that as the vehicle, which constituted the subject-matter of the hypothecation, was acquired by the State and the amount payable in lieu of the acquisition was statutorily determined, the rights of the Bank were, in the circumstances, limited to the amount to be so determined and that the plaintiff could only look to the government in the matter and that the borrower and his co-obligants had no subsisting liability in the matter. The trial court framed the necessary and relevent issues stemming from the pleadings Parties went to trial On an appreciation of the evidence on record, the trial court recorded findings in favour of the plaintiff Bank on the material issues and decreed the suit. So far as the costs and current and further interest were concerned, the trial court decline to award costs of the suit to the plaintiff and, further, restricted the current and further interest to 6 per cent per annum as against the contractual rate which was 16 per cent. Appellant-plaintiff is aggrieved by this part of the judgment and decree.