UNITED COMMERCIAL BANK Vs. SHANKAR ENTERPRISES

JUDGEMENT

(1.) THE United Commercial Bank (UCO Bank) has preferred this First Appeal against the Judgment and decree passed by the Vth Additional District Judge, Gwalior, in Civil Original Suit No.6B/1986, where in the suit preferred by the Bank for the recovery of dues of Rs. 1,68,593.91 paise (which stood paid-up during pendency of suit).pendente lite interest @ 5% has been awarded and the Appellant-Bank claims herein that instead of 5%, the Court should have awarded contractual rate of interest. This Appeal relates only to this solitary issue as to whether a Civil Court possess the power and discretion to grant interest as per the rate mutually agreed between the parties or at a lower rate for the period during which the suit remained pending with the Court (pendente lite interest only).

(2.) THE facts of the case reveal that Shankar Enterprises being a Partnership Firm had obtained financial assistance from the-appellant-Bank and a Term Loan of Rs. 65,000 and a Cash Credit facility of Rs. 60,000 was sanctioned in favour of the firm, for which the respondents No.4 and 5 stood Guarantors and the respondents No.2 and 3 being partners of the Firm were equally made responsible for the return of the loan amount.

(3.) WHILE the Suit was pending with the Trial Court, defendant No.5 Govind Narayan Shah expired and his name was deleted from the array of defendants, where after the Bank filed an Application for attachment and another Application was filed by Defendant No.4 seeking issuance of interim orders for attachment before the judgment, against the amount of Leave Salary and Gratuity payable to defendant No.3 by his Employer J.C.Mills, Gwalior, for realization of due amount and the Trial Court allowed the application of defendant No.4 by an order dated 05.08.1988 and issued an Attachment Order for the amounts payable to the defendant No.3.