PUNJAB NATIONAL BANK Vs. PREM DE VASTRA

JUDGEMENT

(1.) The short question arising for determination in this appeal filed under Section 96 of the Code of Civil Procedure against the judgment and decree passed by the Trial Court by the plaintiff Bank against the defendants/ respondents is about the legality and validity of allowing pendente lite and future interest at the rate of 8% p.a. instead and in place of 19% p.a. as prayed by the plaintiff/appellant.

(2.) Grievance of the plaintiff/appellant is that the defendants had promised to pay interest @ 19.5% p.a. with quarterly rest on availing the credit facilities. Default was committed due to which suit had to be filed by the Bank. Proceedings in the suit had dragged on for more than 12 years. As such the exercise of discretion by the Trial Court by allowing pendente lite and future interest only at the contractual rate of 8% p.a. in place of the contractual rate of at which it was claimed by the plaintiff in the suit i.e., 18% p.a. is bad in law.

(3.) Facts in brief are that credit facilities were obtained by the partnership firm between the period from 1.3.1982 to 11.8.1982 by defendant No.1, a partnership firm comprising defendants 2 to 4 as its partners, wherein on 11.8.1982 when defendant No. 4 ceased to be a partner defendant No. 5 was taken as a new partner. Defendant firm offered guarantee of defendants 6 and 7, who had agreed to jointly mortgage their immovable property having 1/2 share each in the property. On 5.4.1982 equitable mortgage was created by deposit of title deeds by defendants 6 and 7. Defendant firm failed to made payment of the amount. Demand notice was served on the defendants to pay an amount of Rs. 4,49,120.20 alongwith interest at the rate of 18% p.a. with effect from 15.7.1996, the date of institution of the suit till realisation.