CANARA BANK Vs. K S KUSHALAPPA

JUDGEMENT

(1.) The short question that has fallen for determination by us in this appeal by the Canara Bank is whether the ad litem interest given from the date of suit to the date of decree and from date of decree to the date of realisation at 6% p.a. is in conformity with S.34 of the Code of Civil Procedure (in short 'the Code') or opposed to it?

(2.) In the trial Court the suit filed for recovery of money advanced to the respondents-defendants for development of their coffee estate has been decreed. But ad litem interest as noticed by us has been granted at 6% p. a. i.e., maximum permissible under sub-sec. (1) of S.34 of the Code. It was submitted by the learned counsel that the loan advanced for the development of coffee estate should be treated as a commercial loan and the discretion should have been exercised by the trial Judge in accordance with the proviso to sub-sec. (1) of S. 34 of the Code to come nearer the contractual rate so far as it related to ad litem interest and therefore, this Court should interfere.

(3.) We do not think there is any force in that contention. By no means can it be said that development of coffee estate is either business or trade or commerce or industry for the purpose of S.34. We find force in the contention that it is more within the area agricultural or horticultural operation and not any other. Therefore, the 6% p.a. awarded as interest ad litem at two stages i.e., from the date of suit to the date of decree and from date of decree to the date of rea-lisation is at the maximum rate. In other words, if at all there is proper exercise of discretion, it has been against the defendants and not against the plaintiff.