BANK OF INDIA, ASHTA Vs. LABHMAL JAIN OTHERS

JUDGEMENT

(1.) This is plaintiffs first appeal under section 96 of the Civil Procedure Code against the judgment and decree dated 2-7-1988 passed by shri C.K. Tandon, District Judge, Sehere in Regular Civil suit No. 2-B of 1982.

(2.) It appears that the appellant has claimed a decree for a sum of Rs. 29,633- 58 p. together with interest at the rate of 14%, but the learned District Judge has only awarded a sum of Rs. 11,112-91 p. with interest at the rate of 10% per annum. The appellant feels aggrieved by this judgment and decree and challenges its legality in this appeal.

(3.) By now, there is no dispute that the respondent Labhmal Jain had borrowed a sum of Rs. 95,000/- from the appellant bank on 8-4-1977 and had agreed to pay interest at the rate of 4% above the bank rate fixed by the Reserve Bank of India with a minimum of 13% for purchase of a motor-vehicle. The respondents 2 and 3 had guaranteed the before said loan. There is also no dispute that the loan was not repaid in terms of the contract and eventually on 5-6-1979, the appellant bank granted facility of payment by instalment of Rs. 2,500/- for twenty-four months. It is also now not in dispute that on 18-7-1980, the respondent No.1 singned the acknowledgement (Ex.P-14) accepting the balance outstanding on that date to be Rs. 52,730=33 p. Thereafter several payments were made, but according to the appellant Bank, a sum of Rs. 29,633=58 p. remained outstanding on the date of the suit. The respondents denied that any payment was outstanding and submitted that they had paid about Rs. 1,40,309-18 p., which is more than the amount due to the appellant Bank. They also objected to calculation of interest on interest and inclusion of several other demands in the accounts. The learned Judge, on the basis of evidence adduced by the parties, held that the agreement between the parties was legal and valid and could be enforced. He specifically held that there was no condition in the agreement whose legality could be doubted. The learned Judge further held that on 18-7-1980, the respondent No.1 had acknowledged outstanding amount of Rs. 52,730-33 payable to the appellant Bank and was accordingly bound to pay the said amount. In the opinion of the learned Judge, the Court could not go behind the afore-said amount. Examining the matter further, the learned Judge held that after the aforesaid acknowledgement, the respondent No.1 has paid several amounts, which have the effect of reducing the liability. The learned Judge further found that at least 9 items included in the account were outside the purview of the contract between the parties and evidence does not disclose that those amounts were actually spent. The Court, also came to the conclusion that there is no evidence to indicate the bank rate fixed by the Reserve Bank from time to time and, therefore, the appellant was entitled to only the minimum interest of 13% per annum. The Court, therefore, recalculated the amount and found that a sum of Rs. 6,569-06 p. on account of the principal sum and Rs. 4,553-85 p. on account of the interest alone were payable and granted a decree together with interest at the rate of 10% per annum.