BANK OF INDIA Vs. HARISH CHANDRA SHRIVASTAVA

JUDGEMENT

(1.) In this appeal under Clause 10 of Letters Patent the appellant calls in question the validity of the judgment passed in F.A.No. 212/79 whereby the learned single Judge while refusing to interfere in the judgment and decree passed in Civil Suit No. 3-B/78 by the 1st Additional District Judge, Jabalpur has modified the principal amount for the purpose of grant of interest. The challenge in appeal relates to both the grievances.

(2.) The plaintiff-appellant, a nationalised bank had advanced a sum of Rs. 45,000/- as loan for the purpose of purchase of a mini bus to the defendant-respondent No. 1 with the stipulation that the loan amount would be paid to the bank in 36 instalments together with interest at the rate of 12% per annum at the minimum or at such rate of interest which might be fixed by the bank depending upon the instruction in that regard issued by the Reserve Bank of India from time to time. That defendant-respondent No. 2 furnished guarantee for due payment of the loan and interest together. As the borrower did not pay the instalments as required by him the aforesaid suit was instituted for recovery of Rs. 50,999.26 paise. In spite of valid service of notice the defendant-borrower remained ex-parte while the defendant No. 2 guarantor contested the suit. The learned Additional District Judge decreed the suit for a sum of Rs. 50,999.26 paise together with interest and costs. He awarded interest at the rate of 6% per annum.

(3.) Feeling aggrieved by the grant of interest at the rate of 6% per annum, pendente lite and future, the Bank had preferred F.A. No. 212/79 before this Court claiming that it was entitled to receive pendente lite and future interest at the contractual rate of 12% per annum. The learned Single Judge opined that the grant of 6% interest per annum was justified in the facts and circumstances of the case and enhancement thereof was not warranted. However, as the trial Court had not specified any particular date till which the plaintiff would be entitled to get 12% interest per annum and 6% pendente lite the learned Single Judge modified the decree directing that the plaintiff-bank would be entitled to the pendente lite interest at the contractual rate of 12% per annum up to next date of filing of the suit i.e. 28-3-1978 and for the rest of the period grant of interest at the rate of 6% per annum was affirmed.