SYNDICATE BANK Vs. SWADESAMITRAN LIMITED

JUDGEMENT

(1.) THE successful plaintiff in C. S. No. 472 of 1984 has preferred this appeal feeling aggrieved by the judgment and decree of the learned judge determining the rate of interest payable by the first defendant, the respondent herein, at 13% per annum from the date of plaint till the date of payment. THE plaintiff instituted the suit, C. S. No. 472 of 1984, praying for the recovery of a sum of Rs. 15, 94, 294. 60 with interest thereon at the rate of 18% per annum with quarterly rests from the date of plaint till the date of payment. On September 1, 1972, the appellant advanced to the respondent herein a loan of Rs. 6, 00, 000 carrying interest at 5% over the bank rate with a minimum of 11% per annum to be calculated with quarterly rests and as security for the due repayment of the amount so advanced, the respondent deposited its title deeds relating to "A" schedule properties in the plaint, in addition to offering the "B" schedule assets also as such security.

(2.) SEVERAL defences were raised by the respondent herein. Having regard to the limited dispute in this appeal, viz., the rate of interest payable by the respondent between the date of suit and the date of decree, it would suffice to note the defence raised by the respondent in that regard, according to which, the appellant was not entitled to claim interest at 18% per annum as per the contract. After the trial of the suit commenced and PW-1 and DW-1 had been examined, on November 29, 1989, the respondent, through its counsel, made an endorsement to the effect that the plaint suit claim is agreed to and that the interest rate alone is disputed. Pursuant to the endorsement so made, the respondent also expressed its readiness to pay the entire amount due under the decree that may be passed with such rate of interest as may be fixed by the court as payable from the date of plaint till the date of payment.

(3.) ULTIMATELY, the court directed the respondent to pay the appellant the amount claimed in the plaint with interest at 13% per annum from the date of plaint till the date of payment as well as costs and the matter was directed to be posted on November 30, 1989. On that day, the respondent filed a memo of calculation, according to which, the total amount payable as per the order of the court dated November 29, 1989, was shown as Rs. 21, 31, 747 and for that amount, a cheque was also handed over by the counsel for the respondent to the counsel for the appellant. Thereupon, the court directed the appellant to hand over the documents of title deposited by the respondent on or before December 2, 1989, and the respondent was also directed to get back the documents of title from counsel for the appellant. Yet another direction that a fixed deposit receipt for Rs. 15, 00, 000 handed over by the respondent to the appellant should also be returned to counsel for the respondent. The undertaking given by counsel for the appellant to return the documents of title was also recorded as part of that order. While matters stood thus, the appellant preferred this appeal questioning the rate of interest awarded by the court at 13% per annum from the date of plaint till the date of payment and claiming that interest at 18% per annum with quarterly rests between the date of suit and date of decree should have been directed to be paid by the respondent.Learned counsel for the appellant, Mr. S. Kannan, first contended referring to section 34(1), Civil Procedure Code, that the transaction entered into by the respondent was a commercial transaction with a nationalised bank and, therefore, under the proviso to that section, the court should have awarded interest at the contractual rate and not at a reduced rate.