BALAKRISHNAN Vs. BABU

JUDGEMENT

(1.) The appeal arises from a suit for realisation of money. Defendant is the appellant.

(2.) The suit O.S. 155/1985 before Subordinate Judge, Ernakulam was filed by respondent against appellant for realisation of an amount of Rs.46,900/- with interest at 18% per annum and costs of suit. Defendant had borrowed amounts from plaintiff on various occasions for purchasing a house site and constructing a building. The construction was completed and defendant is in occupation of the house. The liability was acknowledged by a letter dated 27-2-1980. In spite of promises made by defendant in several letters the amount was not paid. As per the letter dt.27-2-1980 the amount due is Rs.26,000/- Defendant had therein promised to pay interest at 18% per annum. In a subsequent letter dt.20-8-1993 defendant had agreed to settle the amount due after the disposal of his house. In spite of repeated demands and a registered notice, the amount was not paid and hence the suit.

(3.) Defendant resisted the suit and contended that the suit is not maintainable since it is based on an illegal contract whose object is unlawful. Plaintiff is not a money lender as defined in the Kerala Money Lenders Act, 1959. He is a Government servant and the conditions of service prohibit transactions like money lending. Defendant further contended that there was no agreement between plaintiff and defendant to pay interest and the rate of interest claimed is also excessive. Regarding the advance of the loan it is contended that the amount was offered by plaintiff as a temporary financial accommodation in view of their close relationship and the payment was made voluntarily. There was no understanding between the parties that the advance will be treated as a loan repayable with interest. It is also contended that a substantial portion of the amount was repaid before 1-1-1980. Payments are alleged to have been made since then by two drafts, one for Rs.1500/- and the other for Rs.29,000/- apart from the cash payment of Rs.300/-. An amount of Rs.5000/- was paid as interest. The entire liability has been discharged by 24-7-1985. Defendant disclaimed liability to pay any amount. Various other contentions are also seen advanced in the written statement which are not relevant for the purpose of this appeal.