SURINDER JIT SINGH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The defendant is in appeal aggrieved against the judgment and decree passed by the First Appellate Court whereby the suit of the plaintiff bank for the recovery of Rs. 1,98,892/- was decreed with future interest at the rate of 12.5 per cent per annum from the date of the decree of that Court till actual realisation.

(2.) That plaintiff bank advanced a sum of Rs. 81,000/- to Jaggar Singh alias Ujagar Singh, father of defendants No. 1 to 5 for the purchase of tractor on the basis of his request for the grant of loan dated.27.3.1990. In terms of the mortgage deed, the amount of loan was repayable in 18 half yearly instalments of Rs. 4500/- each. Since the borrower failed to make the payment of due instalment, the plaintiff Bank filed a suit for recovery. The trial Court decreed the suit but granted future interest at the rate of 6 per cent per annum from the date of the decree till realisation on the decretal amount if the amount along with interest and costs is not paid within 2 months from the passing of the decree. However, in appeal, the stipulation regarding rate of interest was modified and it was held that the bank is entitled to future interest at the rate of 12.5 per cent per annum from the date of that decree.

(3.) In the present second appeal, the learned counsel for the appellant has argued that the principal sum was Rs. 81,000/- whereas with capitalisation of interest it is so alleged to over Rs. 1,98,000/-. By placing reliance on Central Bank of India v. Ravindra and Ors., (2001-3)129 P.L.R. 837 (S.C.), it was contended that the award of future interest is covered by the provisions of Section 34 of the Code of Civil Procedure and the amount of interest is disproportionate with the principal sum actually advanced, therefore, the interest at the rate of '12.5 per cent per annum could not be granted. It is further argued relying upon a single Bench judgment of this Court reported in Makhan Singh v. Union Bank of India and Ors. (1989-1)95 P.L.R. 703 that since the trial Court has failed to determine principal amount on which alone the future interest is payable therefore, the decree passed by the Courts below is not sustainable.