INDIAN BANK Vs. ALLTUNE ELECTRONICS PVT LTD

JUDGEMENT

(1.) THE short facts of the case appear to be that the petitioner Bank preferred O.A. No. 107 of 1995 against the respondent for recovery of the amount of Rs. 93,10,429.33 with the running interest until realisation. The Tribunal tried the O.A. And ultimately found that in the Books of Accounts of the Bank the amount shown outstanding was only Rs. 47,79,906.33 and as the interest was not charged after 1.7.1992 to 25.9.1995, the Bank was not entitled to claim interest during the said period. Therefore, the Tribunal decreed the application to the extent of Rs. 47,79,906.33 with the interest at the rate of 21.75% per annum for the period from 25.5.1995 i.e. the date of the application till the realisation of the amount and the cost. The petitioner Bank carried the matter in appeal before DRAT in Appeal No. 182 of 1997. The appellate Bench fund that the Tribunal Committed error in not awarding the interest as per the contractual rate of interest of 21.75% perannum for the period from 1.7.1992 to 25.9.1995. Therefore, partly allowed the appeal by ordering the amount of Rs. 82,90,797.33 in place of Rs. 47,79,906.33 recoverable and the order for interest at the rate of 21.75% per annum was not disturbed. However, the appellate Bench did not permit the claim of interest on the basis of quarterly period and only permitted interest at the rate of 21.75% from 1.7.1992 to 25.9.1995. It is under these circumstances, the present petition before this Court.

(2.) HEARD Mr. Shah, learned Counsel for the petitioner and Respondents No. 1 to 4 and 9 to 10, though served, have not appeared. I have also heard Mr. Banaji, learned Counsel respondents No. 5 and 6, and Mr. Atit Thakore for Mr. R.D. Dave, learned Counsel for respondent No. 8.

(3.) THE literal interpretation of the aforesaid as it is, if undertaken, would mean authorizing the Bank to charge and debit the interest on quarterly basis and if such interest (which is so authorised and charged by the Bank) remains unpaid, the same would become a part of the amount advanced and bear the interest at the same rate. The only question would be whether the Bank has charged and debited the interest accordingly? If the answer is yes, the liability would flow for paying the interest at the same rate of unpaid quarterly rest interest and if the Bank has not charged or debited such interest on quarterly rest, then can it be said as the liability accrued or not.