IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID FRIDAY, THE 30TH JULY 2010 / 8TH SRAVANA 1932 SA.No. 203 of 1998(G) --------------------- AS.140/1991 of I ADDL.SUB COURT, TRIVANDRUM OS.691/1988 of II ADDL.MUNSIFF COURT, TRIVANDRUM .................... APPELLANTS/RESPONDENTS/DEFENDANTS 1 & 2: ------------------------------------------------------ 1. KOCHU THRESSIA, JULIE VILAS, MANVILA, KULATHUR. 2. J.ESTHAPANOSE, JULIE VILAS, MANVILA, KULATHUR. BY ADV. MR.PIRAPPANCODE V.S.SUDHIR RESPONDENT/APPELLANT/PLAINTIFF: ------------------------------------------ STATE BANK OF INDIA, SREEKARIYAM BRANCH, REPRESENTED BY ITS BRANCH MANAGER. ADV. MR.R.S.KALKURA THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 30/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: HARUN-UL-RASHID, J. ------------------------ S.A.No.203 Of 1998 ---------------------- Dated this the 30th day of July, 2010. J U D G M E N T Defendants 1 & 2 in O.S.No.691 of 1988 on the file of the II Additional Munsiff Court, Thiruvananthapuram are the appellants. The appeal is directed against the decree and judgment in A.S.No.140 of 1991 on the file of the I Additional Sub Court, Thiruvananthapuram. The plaintiff bank sued the defendants for money. The trial court dismissed the suit. The decree and judgment passed by the trial court was set aside by the appellate court and decreed the suit allowing the plaintiff to recover a sum of Rs.12,478.05/- with interest thereon at 16% per annum from the date of suit till realization and costs. The parties hereinafter are referred to as the plaintiff and defendants as arrayed in the suit. 2. Plaintiff bank inter alia stated that the defendants availed a cash credit loan facility to the tune of Rs.10,000/- from the bank for starting a firewood vending business upon the personal guarantee and collateral security over the property offered by the second defendant and on executing necessary S.A.No.203 Of 1998 ::2:: documents. The defendants agreed to repay the amount with interest at the rate of 16% per annum with quarterly rests. Since the amount was not paid in spite of repeated demand, the suit was filed. 3. The first defendant contested the suit inter alia contending that she did not receive any amount as per the amount sanctioned to her and that the cheque was issued in favour of a contractor for supplying firewood to the first defendant. Since the defendants did not receive any amount the documents presented by them with the bank are liable to be returned to them and that the plaintiff is not entitled to recover any amount from the defendants. Quite contrary to the above contentions it is also pleaded that the agreed rate of interest was only 12% per annum. 4. PW1 was examined on behalf of the plaintiff. The plaintiff also produced Exts.A1 to A5 namely, demand pro-note, agreement for hypothecation and guarantee, DP note delivery, loan application and statement of accounts. The first defendant was examined as DW1. S.A.No.203 Of 1998 ::3:: 5. Suit claim is based on a loan sanctioned to the first defendant on the strength of a demand pro-note executed by him in favour of the second defendant, endorsed the same in favour of the plaintiff bank. Ext.A1 is the demand pro-note. The court below relied on Exts.A1 to A5 documents and the oral evidence of PW1. 6. As DW1 the first defendant deposed before the court that she had applied for starting a business of firewood vending business. Ext.A4 is the loan application. It is also admitted by the first defendant that the loan was sanctioned and a cheque for Rs.10,000/- admittedly issued in the name of a contractor for supply of firewood to first defendant for doing the said business. The then manager of the plaintiff’s bank deposed that the first defendant came to the bank with a contractor and she instructed to issue the cheque to the contractor and accordingly, the cheque was issued to him. The lower appellate court rightly observed that this appears to be the usual practice in relation to a loan sanctioned by the bank and it is sworn to by PW1. Plaintiff had produced the reply notice sent by the first defendant. As DW1 S.A.No.203 Of 1998 ::4:: she admitted the issuance of reply notice. The learned judge observed that the learned Munsiff has not marked the reply notice and stated no reason for not marking in spite of the fact that it was dealt with in detail in cross examination of DW1. Finding that the non-marking of the document is an omission and since it bear the signature of the first defendant, the lower appellate court admitted the reply notice in evidence and marked the notice as Ext.A6. A reading of Ext.A6 would also clearly reveal the transaction. From the facts discussed in detail by the lower appellate court and after considering Exts.A1 to A6 documents the court below reached the conclusion that Ext.A1 is supported by consideration and the contractor had supplied the firewood to the first defendant, after encashing the cheque. The trial court observed that on an analysis of the entire evidence that the pro-note would necessarily draw an inference that the pro-note is supported by consideration. The lower appellate court also held that in spite of several notices issued calling upon the first defendant to repay the loan amount the first defendant did not sent any reply stating that she has not received any S.A.No.203 Of 1998 ::5:: amount under the loan transaction. The appellate court in reversal of the decree passing by the trial court held that the plaintiff had granted a loan of Rs.10,000/- as averred in the plaint to the first defendant and therefore the plaintiff is entitled to recover the said amount with interest and costs. The findings are entered by the lower appellate court after considering and relying on the oral and documentary evidence adduced by the parties. I agree with the factual findings entered by the lower appellate court. I find that there are no reasons for interference in second appeal. No question of law muchless any substantial question of law arises for consideration in the appeal. 7. The learned counsel for the appellants submitted that the rate of interest awarded by the lower appellate court is excessive and unjust and requested this Court to fix reasonable rate of interest. 16% per annum is the agreed rate of interest and since this is a small commercial transaction there is nothing wrong in the lower appellate court granting interest at the rate of 16% per annum. At the same time taking into account the fact that the first defendant who borrowed money is a very small S.A.No.203 Of 1998 ::6:: trader and the transaction is in respect of only Rs.10,000/-, I am of the view that the submission made by the counsel has some force. Being a poor customer she may find it difficult to repay the loan amount with 16% interest. Therefore, the interest rate is reduced and re-fixed at 9% per annum. In all other respects, the decree and judgment is confirmed. In the result, the appeal is partly allowed. No order as to costs. HARUN-UL-RASHID, Judge. bkn/-