B DHANRAJ Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) THE appeal filed against the judgment and decree passed in O. S. No. 163/97 on the file of Civil Judge (Sr. Dn.), davanagere. The appellant is the defendant and had availed credit card facility from the respondent/bank (hereinafter called plaintiff ). On the credit card borrowings the defendant is due in a sum of Rs. 1,33,000/ -. The plaintiff bank filed a suit for recovery of the dues with service charges at the rate of 2. 5% p. m. on the principal claim from the date of the suit till payment with costs.

(2.) THE availment of credit card facility is admitted. In the present appeal the rate of interest granted at 12% p. a. is challenged.

(3.) IT is the contention of the appellant there is no stipulation to pay interest. The stipulation enabling the bank to collect service charges at the rate of 2. 5% p. m. does not amount to a contract to pay interest. Therefore, grant of interest is bad in law.