SANGLI BANK LTD Vs. CHANDRASHEKAR CHANNABASAPPA KARCHI

JUDGEMENT

(1.) THE Appellant Bank filed suit in O. S. No. 61/2003 against the respondents for recovery of Rs. 3,94,991/- towards the loan borrowed by them for construction of house, together with interest at the agreed rate of 19. 25% p. a. and penal interest at 2%. The respondents denied the suit claim and prayed for dismissal of the suit. After contest, the trial Court decreed the suit with interest at 13. 5% p. a. The Appellant Bank has filed this appeal only against the rate of interest awarded by the trial Court.

(2.) THE claim of the Bank is that the trial Court ought to have awarded future interest at the contractual rate at 21. 5% p. a. but the trial Court committed an error by awarding only 13. 5%. In support of the claim, learned counsel for the Appellant has cited the decision reported in Vijaya bank v. Bhathija, [1994 ]79 Compcas478b (Kar ), ILR1993 KAR 2035 wherein this Court has laid down the position regarding interest in paragraph 19 as under:

(3.) AT the outset, it is to be held that the Bank is not entitled to contractual rate of interest for the following reasons: i) Section 34 C. P. C pertains to interest and the relevant portions of Sub-section (1) thereof reads as under: