IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN MONDAY, THE 18TH AUGUST 2008 / 27TH SRAVANA 1930 RSA.No.59 of 2004 (F) -------------------------- AS.103/2002 of ADDL. DISTRICT COURT, NORTH PARAVUR OS.429/1998 of PRINCIPAL SUB COURT, NORTH PARAVUR .................... APPELLANT/APPELLANT/1ST DEFENDANT -------------------------------------------------- P.T.FRANCIS, SON OF THOMMAN PANAKKAL VEETTIL, MUNAMBAM KARA, PALLIPPURAM VILLAGE, KOCHI TALUK. BY ADV. SRI.T.B.THANKAPPAN SRI.R.GIRISH SMT.ALICE THOMAS SRI.JOSE THOMAS (PEEDIKAYIL) RESPONDENTS/RESPONDENTS/PLAINTIFF AND 2ND DEFENDANT ---------------------------------------------------------------------------- 1. V.P.DEVASSEY @ GEORGE S/O. VATTAPARAMBIL VEETTIL, PAPPU, ANGAMALY, ANGAMALY VILLAGE, ALUVA TALUK. 2. THE CATHOLIC SYRIAN BANK LTD., CHANNAMANGALAM BRANCH, VADAKKUMPURAM REPRESENTED BY ITS MANAGER. BY ADV. SRI.P.M.POULOSE FOR R1 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 18/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.P.BALACHANDRAN, J. ------------------------------------------------ R. S. A. No.59 of 2004 ------------------------------------------------ Dated this the 18th day of August, 2008 JUDGMENT This R.S.A is filed by the first defendant in O.S.429/98 on the file of the Sub Court, North Parur. The suit aforesaid was filed by the first respondent/ plaintiff for recovery of amounts paid by him on behalf of the first defendant to the 2nd respondent/ second defendant/Bank which has advanced loan to the first defendant with the plaintiff as a surety. The amounts paid by the plaintiff to the second defendant/Bank on behalf of the first defendant are admittedly an amount of Rs.50,000/- on 10/06/97, an amount of Rs.25,000/- on 18/11/97 and a further amount of Rs.25,000/- on 06/01/98 making in all an amount of Rs.1 lakh. The suit has been filed by the plaintiff for recovery of each of those instalments so paid with interest thereon at R. S. A. No.59 of 2004 -2- the rate of 18% per annum from the respective dates of payments of those amounts till date of suit and thereafter also till realisation at the same rate of interest on the plaint claim of Rs.1,22,125/-. The trial court decreed the suit for the said amount of Rs.1,22,125/- with 18% interest per annum from the date of suit till realisation and with charge over the scheduled property. On appeal by the first defendant the first appellate court vide judgment in A.S.103/02 modified the above decree holding that the interest to which the first respondent/plaintiff would be entitled shall only be at the rate of 15% on the decreetal amount. It is not being satisfied with the said judgment that the first defendant has further come up before this Court filing this R.S.A. 2. The R.S.A was admitted on the following substantial question of law:- R. S. A. No.59 of 2004 -3- “Is it not illegal for the lower appellate court to grant 15% interest on the principal sum adjudged which includes the interest calculated at the rate of 18% per annum?” 3. It is vehemently contended by the learned counsel for the appellant that interest should have been allowed for the period after suit only at the rate of 6% per annum in view of Section 34 of the C.P.C. 4. Heard submissions of counsel for the first respondent as well. 5. The first respondent was surety to the appellant for the loan transaction the appellant had with the second respondent/Bank. It is for reason of the appellant not having paid the amounts due to the second respondent/Bank that the first respondent plaintiff who was the surety was compelled to make payments to the second respondent/Bank on behalf of the appellant. Even in case the amount due to the bank was to be remitted by R. S. A. No.59 of 2004 -4- the appellant he was to make payment of interest on the amount adjudged at the rate at which Bank used to advance money. The suit is one of 1998 and was being decreed by the trial court on 29/11/01 and the appeal was being disposed of by the first appellate court on 26/09/03. During all these times, the interest rate was very high and it is thereafter for the last three years that the interest rate has come down. For that reason the appellant who was the principal debtor to the Bank cannot contend that his liability is only to pay interest at 6% per annum as provided under Section 34 of the C.P.C. The circumstances of this case justify award of interest at the rate at which monies are advanced by Nationalised Banks in relation to commercial transactions. Obviously during 2003 the rate at which monies were being advanced by the bank was certainly not below 15% interest per annum. It was therefore, that appellate court R. S. A. No.59 of 2004 -5- which granted concession in the rate of interest has fixed the rate of interest at 15% per annum. It cannot be forgotten that the rate at which interest is being granted is taking into account the rate of interest at which monies are advanced by Banks and by reason of decrease in the rate of interest after several years the decree shall not be liable to be amended as in that event, the benefit will be to the person who has not complied with the decree for a pretty long time. Such benefit cannot be allowed to a judgment debtor who has not paid up the amounts covered by the decree within a reasonable time. The decree of the trial court is dated 29/11/01 and that of the appellate court is dated 26/09/03 and had the appellants discharged the debt within a reasonable time that was not a time when the interest rate had gone down. It is by non-payment of the decree debt within a reasonable time that it so R. S. A. No.59 of 2004 -6- happened that in the meanwhile, there was a fall in the interest rate. However, at present again the interest rate is on the increase and has reached 15% by this time. I am not of the view that any leniency in the matter has to be extended to the appellant and any relief granted in this appeal. This R.S.A in the circumstances, is devoid of any merit and deserves only to be dismissed. 6. In the result, I dismiss this R.S.A with costs to the contesting first respondent. K.P.BALACHANDRAN, JUDGE kns/-