STATE BANK OF INDIA Vs. RASHMI SMALL INDUSTRIES

JUDGEMENT

(1.) State Bank of India is the appellant against the judgment and decree of the Subordinate Judge, Cuttack. Though the suit has been decreed, the Subordinate Judge has refused to grant costs and pendente lite interest and this appeal is, therefore, directed against the said order of refusal of interest and costs.

(2.) The Bank filed the suit for realisation of the amount due on defendant No. 1 on the basis of a cash credit loan granted in his favour by the State Bank of India. The suit was for the principal sum of Rs. 10,462.25 together with interest pendente lite and future at the agreed rate and with costs of litigation. Defendant No. 1 was the principal loanee and defendant No. 2 was the guarantor. Defendant No. 1 in his written statement admitted his liability but defendant No. 2 contested the suit by alleging that he was not liable for the said claim.

(3.) The Subordinate Judge relying on Exts. 1 and 3 came to hold that defendant No. 2 also was liable for the suit claim along with defendant No. 1 jointly and severally. In view of the admission of defendant No. 1 in the written statement, the Subordinate Judge decreed the plaintiff's suit so far as the principal sum was concerned, but he held that since defendant No. 1 had admitted the claim, it would not be appropriate to grant pendente lite interest in the case. So far as the future interest is concerned, the Subordinate Judge came to hold that by operation of S.9 of the Orissa Money Lenders Act read with O.34, R.11, C.P.C. the plaintiff could not claim more than six per cent towards interest and, therefore, he granted future interest at the rate of six per cent per annum. So far as the costs of the suit is concerned, he found that the bona fides and fairness exhibited by defendant No.1 warranted that the defendant should not be saddled with costs of the suit and accordingly he decreed the suit without any costs. Defendant No. 1 had made a prayer for payment of the decretal dues on monthly instalments but the said prayer was also rejected by the Subordinate Judge.