PUNJAB NATIONAL BANK Vs. MALKIAT KAUR

JUDGEMENT

(1.) Punjab National Bank had filed a suit for recovery of Rs. 35,848/- against the defendants. The case of the plaintiff was that defendant Nos. 1 to 8 had taken financial assistance on the basis of equitable mortgage. Defendant No. 9 stood as guarantor of the repayment of the said amount. The plaintiff prays that the said amount be recovered from the defendants and the bank may be awarded future interest @12.5% p.a. with half yearly interest from 1977 to 1989. The learned trial Court, vide its judgment and decree dated 5.8.1993 decreed the suit of the plaintiff and granted interest on the sum of Rs. 2,900/- from the date of the suit till realisation and permitted the mortgaged property to be sold. Liability of defendant Nos. 1 to 8 was limited to the extent they had inherited the estate of the deceased, the main borrower.

(2.) The appeal was preferred by the Bank which was partially accepted and the learned first appellate Court while passing the decree for the amount claimed granted to the bank interest on the principal amount of Rs. 11,538/- from the date of institution of the suit till realisation. Still the Bank was aggrieved from the judgment of the first appellate Court and filed this Regular Second Appeal.

(3.) The learned counsel for the appellant while relying upon a judgment of the Hon'ble Supreme Court as well as judgments of this Court in the case of Bank of Baroda V. M/s Jagannath Pigment and Chem. and ors, 1995 ISJ(Banking) 573, Hans Raj V. Surinder Singh, 1997 1 RCR(Civ) 205 and Gupta Agricultural Udyog V. Punjab National Bank, 2001 ISJ(Banking) 368 to contend that the interest should be awarded on the principal sum adjudged and not on the remnant principal amount borrowed by the borrower. In the case of Bank of Baroda, 1995 ISJ(Banking) 573, the Hon'ble Apex Court held as under :