RSA No.1756 of 2008(O&M) 1. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.1756 of 2008(O&M) Date of decision: 29.1.2010 Suba and others ......Appellant(s) Versus State Bank of India ......Respondent(s) CORAM:- HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Sandeep Goyal, Advocate for the appellants. Rakesh Kumar Garg, J.(Oral) CM No.5430-C of 2008 For the reasons mentioned in the application, delay of 36 days in refiling this appeal is condoned. CM stands disposed of. RSA No.1756 of 2008 This is defendants' second appeal challenging the judgment and decrees of the Courts below whereby suit of the plaintiff-respondent for recovery has been decreed with interest @ 14 % per annum with half yearly rests as per the contract. As per the averments made in the suit, the appellants were granted a loan of Rs.1,98,000/- for purchase of a tractor on collateral security of hypothecation of the tractor to be purchased and mortgage of land. Since the amount was not repaid by the appellants to the plaintiff- Bank, suit for recovery for the aforesaid amount along with interest was filed. The defendant-appellants resisted the claim of the plaintiff- respondent taking various preliminary objections and alleged that the RSA No.1756 of 2008(O&M) 2. plaintiff-Bank had granted the loan to the defendant-appellants @ 6% per annum interest being an agriculture loan and the defendants had already paid a sum of Rs.2,25,000/- in six monthly instalments. Dismissal of the suit was prayed. On appreciation of evidence, both the Courts below found that the appellants had taken the loan from the plaintiff-respondent on the terms and conditions as agreed between them and while decreeing the suit, the Courts below also ordered for payment of interest pendente lite and future , with half yearly rests @ 14% per annum as per the terms and conditions of the loan. Still not satisfied, the appellants have filed the instant appeal raising the grievance that the Courts below were not justified in awarding future interest @ 14% per annum especially when the loan was only for agriculture purposes and in such a situation, the future interest could not exceed 6% per annum. On the basis of the aforesaid argument, learned counsel for the appellants submitted that the following substantial questions of law arises in this appeal: “Whether the respondent is entitled to recover future interest @ 14 % per annum?” I have heard learned counsel for the appellants and perused the impugned judgment and decree. The contention raised by the learned counsel for the appellants is without any merit. This Court in the case of Gurnam Singh versus UCO Bank 1996 (3) PLR 624 has held that advancement of loan for purchase of a tractor is not a loan for agricultural purpose only and in such cases the provisions of Section 34 of the Code are not applicable and the bank is entitled to charge interest at the rate of interest prescribed in RSA No.1756 of 2008(O&M) 3. the contract. This controversy has also been set at rest by the Hon'ble Supreme Court in the case of N.M. Veerappa v. Canara Bank (1998-1) P.L.R. 503, wherein it has been observed that the suits where the question of mortgage is involved will be governed by the contract between the parties and the question of interest would have to be in accordance with the provisions of Order 34 rule 11 of the Code and not Section 34 of the Code. Thus, I find no merit in this appeal. No substantial question of law arises in this appeal. Dismissed. January 29, 2010 (RAKESH KUMAR GARG) ps JUDGE