UNION BANK OF INDIA Vs. DALPAT GAURISHANKAR UPADHYAY

JUDGEMENT

(1.) THE plaintiff Bank has filed this suit against the defendant for recovery of a sum of Rs. 5,55,259. 35 with further interest thereon at the rate of 16. 5 per cent per annum with quarterly rests from the date of the suit till payment and for enforcement of the securities created by the defendant in favour of the plaintiff referred to in the plaint. The plaintiff has relied upon several documents, including a promissory note dated 9th July, 1984 (Exhibit A to the plaint) in support of its plea that the defendant had agreed to pay the amount of interest to the plaintiff "with quarterly rests".

(2.) THE plaintiff applies for ex-parte decree against the defendant and prays for award of interest pendente lite and post-decretal on the amount due and payable by the defendant to the plaintiff as on the day of the suit.

(3.) SECTION 34 of the Code of Civil Procedure empowers the Court to award post-decretal interest and interest pendente lite "on the principal sum adjudged" at such rate as it deems fit within the framework of the said section. It is necessary to consider the question as to what is the correct legal interpretation of the expression "principal sum adjudged" as used in section 34 of the Code. This question has arisen for consideration of the Court very often and particularly in Bank suits whether addition of interest to the principal at certain intervals with prescribed rests is the part of normal Banking practice. In some of the judicial pronouncements it has been held by some of the High Courts that the expression "principal sum adjudged" means the original amount lent or the original principal amount without adding any amount on account of interest thereto. In several other decisions it has been held that the expression "the principal sum adjudged" means and includes aggregate amount found due and payable by the Court on the date of filing of the suit i. e. , the amount inclusive of amount of interest which has been capitalised with or without rests by virtue of an agreement between the parties.