N. SHANKARANARAYANA BHAT Vs. ASSTT. REGISTRAR OF CO

JUDGEMENT

(1.) The appellant is an agriculturist and a member of Venoor Agricultural Co-operative Bank Limited, Venoor, Belthangady Taluk second respondent in the appeal. The appellant had availed loan from the second respondent-Bank. Since there was a default in repaying the amounts borrowed, the second respondent-Bank had filed a dispute under Sec. 70 of the Karnataka Co-operative Societies Act, before the Assistant Registrar of Co-operative Societies, Puttur Sub-Division, Puttur Taluk, Dakshina Kannada District first respondent in the appeal. The dispute came to be contested by the appellant by filing his objections and by participating in the proceedings. The Arbitrator by his order dated 24-11-2001 has decreed the claim of the second respondent-Bank with interest at 21% on the principal amount from the date of the claim till the date of recovery. The appeal filed by the appellant under Sec. 105 of the Karnataka Co-operative Societies Act before the Karnataka Appellate Tribunal is partly allowed by the Tribunal by its order dated 21-2-2004 and has directed the appellant to pay 18% interest instead of 21% as directed by the Arbitrator. It is the correctness or otherwise of these orders were called in question by the appellant before this Court by filing writ petitions in Nos. 29720-29721/2004 under Art. 227 of the Constitution of India. The learned single Judge by this order dated 17-8-2004 has dismissed the writ petitions. Feeling aggrieved by the order so passed, the appellant is before us in this appeal.

(2.) The learned counsel for the appellant at the time of hearing of the appeal would contend that, since the loan availed by the appellant from the second respondent-Bank is for agricultural purpose, in view of Sec. 34 of the Civil Procedure Code, the future interest cannot exceed 6% per annum and, therefore, the Arbitrator has committed an error in awarding contractual rate of interest from the date of the decree till realisation.

(3.) Sri K. M. Nataraj, learned counsel for the second respondent-Bank would contend that since the Arbitrator is not a Court, the provisions of Sec. 34 of the Civil Procedure Code are not applicable and, therefore, the Arbitrator was justified in awarding the agreed rate of interest while passing the impugned order.