BANK OF BARODA Vs. SARVOTTAM NAMKIN PVT. LTD.

JUDGEMENT

(1.) THIS appeal impugns the order dated 9th August, 2010 passed by the learned Presiding Officer, DRT -II, Ahmedabad, whereby the Original Application No. 75 of 2007 filed by the appellant Bank against the defendant No. 5 was allowed and the defendants were jointly and severally directed to pay Rs. 17,20,975/ - with simple interest @ 6% thereon from 26th March, 2007 until realization and declaration of mortgage was also granted. The appellant is aggrieved against the award of interest @ 6% per annum from 26th March, 2007 i.e. pendente lite and future interest.

(2.) NONE has turned up to contest the appeal on behalf of the respondents though service has been effected upon them.

(3.) I have heard Ms. Lodha, the learned Counsel for the appellant and have carefully perused the record. Her contention is that the impugned order simply awards interest @ 6% per annum from 26th March, 2007 without giving any reasons of awarding interest at this rate. She specifically refers to para 11 of the impugned order where interest @ 6% per annum from 26th March, 2007 is awarded. The contention of Ms. Lodha is that the order of the Tribunal awarding interest @ 6% per annum is absolutely arbitrary and not supported with any reasons. Her contention is that discretion is vested in the Tribunal by virtue of Section 34 of the Code of Civil Procedure to award interest other than contractual rate of interest but it should be supported with reasons. No doubt, the impugned order does not give reasons for awarding interest @ 6% per annum. She has cited a judgment of the Hon'ble Supreme Court reported in : I (2011) BC 503 (SC) : I (2011) SLT 83 : (2010) 10 SCC 640, Punjab & Sind Bank v. Allied Beverage Co. Pvt. Ltd. In this case the Tribunal had awarded interest @ 18% per annum with monthly rests. The same was upheld by the Appellate Tribunal. However, the Hon'ble High Court in its writ jurisdiction had reduced the rate from 18% with monthly rests to 14% per annum simple. The Hon'ble Apex Court had framed the question whether the High Court is justified in reducing the interest @ 18% per annum with monthly rests to @ 14% per annum with 12 monthly rests without appreciating the contractual rate of interest. The Hon'ble Apex Court had held that the award of simple interest @ 14% per annum is just and proper. We may quote paras 13 and 14 of the judgment as under: