JANG SINGH Vs. BANK OF INDIA

JUDGEMENT

(1.) Jang Singh obtained a loan of Rs. 1,85,000/- from the Bank of India on 25th May, 1980 for the purchase of a Truck which was to be utilised for doing the business of transport.

(2.) On behalf of the defendant-appellant, a plea has been raised that future interest should not have been at the rate of 11.85% P.A. and it should have been at the most at the rate of 6% P.A. This contention has been opposed on behalf of the respondent-Bank. The learned counsel for the respondent has referred to Oriental Bank of Commerce v. Dila Ram and Others, 1992 ISJ(Banking) 87where in the case of a loan, advanced for the purchase of a Truck, interest was allowed at the rate of 13.5% P.A. In Punjab National Bank v. Nirmal Paper Board Mills and Others, 1992 ISJ(Banking) 411, it was observed that the agreed rate of interest which was 13.5% P.A., was recoverable. In the case in hand, the agreed rate of interest which was 11.85% shall be payable and thee is no justification for reduction. However, it is clarified that future interest shall be payable only on the principal sum. The conclusion is that this R.S.A. is dismissed after hearing at the motion stage.