A S RAMA KISHNAN Vs. BANK OF BARODA

JUDGEMENT

(1.) First defendant in O.S. No. 391 of 84 on the file of the First Additional Subordinate Judge, Madurai, aggrieved by the grant of interest at 18 per cent for the suit claim from the date of the suit till date of payment, has filed the above appeal.

(2.) Necessary facts for the disposal of the appeal alone are briefly stated hereunder. The plaintiff/respondent herein filed the said suit for passing preliminary mortgage decree for sale of the hypotheca directing the defendants to pay the plaintiff a sum of Rs. 8,91,678.09 with subsequent interest thereon at 20 percent per annum from the date of plaint till payment. The plaintiff is a Bank incorporated under Banking Companies (Acquisition and Transfer of Undertakings) Act (V of 1970) with its Head Office at Mandvi, Baroda, Gujarat State and a Branch at East Avanimoola Street, Madurai. First defendant applied to the plaintiff's brarch at East Avanimoola Street for the purpose of construction of a new hotel building, purchase of furniture etc. The plaintiff sanctioned the same on condition of execution of necessary instruments and on his creating equitable mortgage of items 1 and 2 described in plaint A Schedule. The first defendant executed a registered memorandum on 31.3.70 of equitable mortgage in respect of items 1 and 2. He also executed a demand promissory note on 1.4.70 to the plaintiff for Rs. 1,57,500 agreeing to repay the same with interest at 4-1/2 per cent per annum above the Reserve Bank of India rate with a minimum of 9-1/2 per cent annum with one half minimum interest clause applicable each quarter. The first defendant availed the loan and he was allowed to repay the loan in 120 equal monthly instalments at Rs. 3,000 each commencing from 4.3.1971 along with interest. In default, the first defendant was also liable to pay over due interest at 2 per cent per annum as agreed to. The account should be cleared by 4.3.1981. The first defendant applied for further loan of Rs. 60,000 from the plaintiff on the security of the same properties and executed a demand promissory note on 28.12.70 agreeing to repay it with interest 4-1/2 per cent per annum above Reserve Bank of India with one half minimum interest clause applicable each quarter. The first defendant availed the loan. He also executed on 28.12.70 an agreement of hpothecation of the furniture and fittings in the hotel building as described in plaint B Schedule. The first defendant also requested the plaintiff to grant additional loan of Rs.83,000 and offered security of his properties situate in the villages of Moolakkarai Patti and Munanjipatti in Tirunelveli District. The first defendant executed a demand promissory note for Rs.83,000 on 7/2/72 in favour of the plaintiff agreeing to pay the same with interest at 4-1/2 per cent per annum above the Reserve Bank of India rate with a minimum of 10-1/2 per cent per annum with quarterly rests and availed the loan.

(3.) In consideration of the plaintiff granting the loan, the first defendant deposited on 7/2/72 with the plaintiff's branch, the title deeds of the properties mentioned as items 3 to 16 in plaint A Schedule. However, the first defendant did not clear the accounts as agreed to. The present rate of interest is 20 per cent per annum as per the directives of the Reserve Bank of India and the first defendant is bound to pay at that rate as agreed to. According to the ledger page of the first defendant in plaintiff's books of account as certified under the Banker's Books Evidence Act a sum of Rs. 5,15,127.88 on the loans dated 1.1 1970, 28.12.70 and a sum of Rs. 3,76,550.21 on the loan dated 7.2.72 are due from first defendant with interest made upto 26.4.84 which carries further interest till payment. The total amount is Rs.8,91,678.09. The first defendant is also bound to pay insurance premium for the hypotheca every year. Therefore, the plaintiff has laid the suit for recovery of the amount due from the defendants with subsequent interest and costs of enforcing the mortgage.