ARAVIND KUMAR JAISWAL Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) In CCCA.No.121/78 the defendants are the appellants and CCCA. No. 125/78 was filed by the plaintiff to the extent of disallowing costs. The parties are referred to herein as arrayed at the trial.

(2.) The facts now not in dispute and accepted by the lower Court are, that the plaintiff agreed to lend medium term loan of Rs. 30,000/- on 6.1.1971 for the agricultural purpose i.e., to develop and improve the agricultural farm of the defendants, payable in six half-yearly instalments of Rs.5,000/- each, commending from 1.7.1971. The defendants executed the mortgage deed Ex.A1 on 30.1.1971 and an account was opened under Ex.A.2. From time to time, an amount of Rs.23,798.42 was disbursed. By letter dated October 25, 1971, though the defendants requested to disburse the balance Joan of Rs.6,201.50 it remained unpaid and after prolonged correspondence between the parties, the plaintiff laid the suit to recover the amount paid and the interest accrued thereon. The defendants resisted it raising various contentions. The lower court framed as many as 12 issues and found all of them against the defendants and decreed the suit. Meanwhile, the defendants deposited the principal amount on December 30, 1974. The trial Court, after giving credit to it, made a preliminary decree for the balance amount of Rs. 12,174.18 with interest at 11% p.a. from 18.9.1975 till date of expiry of the period of redemption of six months and the parties were directed to bear their own costs.

(3.) Mr.Venkataramireddy, the learned counsel for the defendants, assailed the decree on two accounts viz. charging interest at 11% p.a. with half-yearly rests is usurious and in view of the decision in Indian Bank, Adoni, In re., (1984)1 An W.R. 127, and subsequent decisions it must be held that the decree for interest is illegal. It is his further contention that the principal amount was deposited on December 30, 1974 and it was withdrawn on September 18, 1975 and the lower Court committed illegality in awarding interest from the date of the deposit till date of withdrawal. Mr.Ramgopal, the learned counsel for the plaintiff, refuted the plea of usurious nature of the loan transaction stating that it has not been raised as a fact. The interest claimed is only at 11% p.a. with half-yearly rests and it does not exceed even 12% and had the plea been taken, the Bank would have placed all the material before the Court to establish that on the facts it is not a usurious transaction and therefore the ratio in Indian Bank's case (supra) is inapplicable to the facts herein. With regard to the second point, it is contended that, when the plaintiff-Bank sought to withdraw the amount, the defendants objected to and as a result I. A.No. 100/75 was closed and therefore the lower Court has rightly allowed interest from the date of the deposit till the date of withdrawal. It is further contended that the lower Court ought to have granted costs to the plaintiff. It is not obligatory for the Bank to await till the date of payment by the defendants and at no point of time they were ready to pay the amount and even after filing the suit it was deposited after more than one year three months and the balance amount is not deposited even till today and under these circumstances, the lower Court ought to have granted costs.