KARNATAKA BANK LTD Vs. NARAYANA BHATTA

JUDGEMENT

(1.) This Appeal by the Karnataka Bank, the unsuccessful plaintiff, directed against the judgment and decree dated 12-9-1983, passed in O.S. No. 13 of 1981 on the file of the Civil Judge, Srirangapatna, dismissing its suit for recovery of money advanced on the security of a contract vehicle, raises certain interesting questions touching the extent of the Bar of Civil Courts' jurisdiction under the Karnataka Contract Carriages (Acquistion) Act, 1976.

(2.) Plaintiff, Karnataka Bank Ltd., on 1-8-1972, agreed to advance a sum of Rs. 1,08,000/- to S. Narayana Bhatta, the first-defendant, to enable him to purchase a new Ashok Leyland Bus to be used as contract-carriage. First defendant's father was a surety. His legal representatives are defendants 2 to 8. The State Government is defendant-9. Out of the sanctioned loan of Rs. 1,08,000/- Rs. 74,112-33 was released on 1-8-1972 for payment to the supplier of the chassis at Ananthapur. Two sums of Rs. 24,000/- and Rs. 9,887-67 were released by the plaintiff on 4-8-1972 and 30-9-1972. respectively, directly to the body-builder. On 22-11-1972, the bus was registered originally as APA 4625, but later assigned a fresh identification mark, MYM 6370. The loan was to carry interest at 6 1/2% above the Bank-rate with Quarterly rests.

(3.) On 30-1-1976 Karnataka Contract Carriage (Acquisition) Ordinance 1976 (Karnataka Ordinance No. 7/76) was promulgated. By Section 4 of the Ordinance, every contract carnage owned by a contract carriage operator along with permit stood vested in the State Government absolutely free from all encumbrances. First defendant's vehicle, accordingly, was acquired by, and stood vested in, the State Government. The vehicle was also seized by the Government on 31-1-1976. The ordinance was later replaced by the Karnataka Contract Carriages (Acquisition) Act, 1976 ('Act' for short). On 14-5-1976 and 9-3-1978 the plaintiff is stated to have lodged, and reiterated, its claim before the Authorised Officer under the 'Act'. According to the plaintiff a sum of Rs. 60,932-18 stood due as on 30th January 1976 and that it was entitled to interest subsequent thereto at rates agreed to by the borrowers. As on 9-3-1978 the plaintiff claimed in all Rs. 88,228-33. It is stated that the Authorised-Officer offered a sum of Rs. 1,05,000/- as the amount payable for the acquisition of the contract carriage. Apparently, the first-defendant did not accept this offer. The matter was referred to Arbitration under the Act. Before the Arbitrator gave the award, Government made two payments to the plaintiff. On 17-1-1980 it paid the plaintiff a sum of Rs. 60,932-18 which was the amount due as on 30-1-1976, On 10-6-1980 a further sum of Rs. 14,486-15 was paid. This was by way of interest at 6% on the said sum of Rs. 60,932-18. In all, plaintiff was paid Rs. 75,418-33. The Arbitrator made an award on 30-1-1980 determining a sum of Rs. 1,16,500/- as the 'Amount' payable for the acquisition of the vehicle. The amount so awarded, less Rs. 60,932-18 paid to the plaintiff, was paid over to the first-defendant. The plaintiff and the first-defendant were both paid interest from 30-1-1976 till date of payment at 6% on the respective sums paid to them. After receiving these sums aggregating to Rs. 75,418-33, as aforesaid, the plaintiff brought the present suit on 11-6-1981 for recovery of a sum of Rs. 64,386/- stated to be the balance still due at the foot of the account. This was because even after 30-1-1976 the bank continued to charge compound-interest at the agreed rates with agreed periodicity of rests while the amount of Rs. 60,932-18 due as on 30-1-76 was paid only on 17-1-1980. The suit-claim represented the debt of Rs. 60,932-18 as on 30-1-1976, with compound interest at agreed rates less the sum of Rs. 75,418-33 paid by Government.