IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID MONDAY, THE 8TH MARCH 2010 / 17TH PHALGUNA 1931 AS.No. 636 of 1994 -------------------- OS.280/1988 of II ADDL.SUB COURT,KOZHIKODE .................... APPELLANT/DEFENDANT: ---------------------------- K.P.NEELAKANDAPILLAI, KANGARAKKATTU HOUSE, KAKKODI VILLAGE, KOZHIKODE TALUK, KOZHIKODE DISTRICT. BY ADV. MR.K.RAMAKUMAR, SENIOR ADVOCATE RESPONDENT/PLAINTIFF: --------------------------- CANARA BANK, KAKKODI BRANCH, KOZHIKODE DISTRICT. ADV. MR.V.M.KURIAN, MR.A.V.THOMAS, MR.E.K.DILRAJ MR.MATHEW JOHN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 08/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AS.No. 636 of 1994 ORDER ON C.M.P.NO.855/1993 IN A.S.NO.636/1994 DISMISSED. 8.3.2010 SD/- HARUN-UL-RASHID, JUDGE. // TRUE COPY // P.A TO JUDGE. HARUN-UL-RASHID, J. ----------------------------------- A.S.No.636 of 1994 --------------------------------- Dated this the 8th day of March, 2010 J U D G M E N T The defendant in O.S.No.280 of 1988 on the file of the Sub Court, Kozhikode, is the appellant. The suit is for realisation of money. The trial court passed a decree in favour of the plaintiff allowing him to realise a sum of Rs.50,973.52/- with future interest at the rate of 15% per annum on the principal amount from 3.6.1988 till realisation. Aggrieved by the decree and judgment the plaintiff has preferred the appeal. The parties are hereinafter referred to as the plaintiff and defendant as arrayed in the suit. 2. No oral evidence is adduced by either side. Exts.A1 to A15 and Ext.B1 were marked. 3. The appellant/defendant was an employee of the bank. While he was in service, a loan of Rs.45,000/- was granted on 3.4.1982. Ext.A1 is the agreement executed by the defendant in favour of the plaintiff bank. The defendant was paying the monthly instalments. The defendant was compelled to retire A.S.No.636 of 1994 2 from service on 21.1.1985. Originally, the defendant was dismissed from service for certain misconduct. But, subsequently, the Labour Court modified the dismissal and held that the dismissal shall be substituted as compulsory retirement. On account of the defendant leaving the service, the plaintiff bank demanded the loan amount due relying on clauses 9 and 10 of the loan agreement. Ext.A1 is the agreement dated 3.4.1992 executed by the defendant in favour of the plaintiff bank. Going by the relevant clause in Ext.A1, it is seen that being an employee of the bank he availed housing loan with concessional rate of interest, namely, payable at the rate of 3.80% per annum. Clauses in Ext.A1 further shows that the concessional rate of interest shall continue only till the employee is in service. Now, the bank wanted to realise the further sum due from the defendant. Therefore, the present suit was filed for realisation of the principal sum with interest at the rate of 15% per annum on the balance principal sum from the date of filing of the suit and thereafter. 4. The defendant contended that the plaintiff can recover the amount only in monthly instalments though he retired from A.S.No.636 of 1994 3 service. Clause 9 of Ext.A1 agreement provides that if the employee ceases to be in service before the loan is fully cleared the entire balance or so much of it as may then remain unpaid shall immediately become repayable to the bank. Therefore, the court below held that the plaintiff is entitled to recover the balance entire amount in lump from the defendant. The court below further examined the rate of interest payable by the defendant. During the period of service the defendant repaid the loan amount with simple interest at the rate of 3.80% per annum. The court below referred to clause 10 of Ext.A1 which provides that the rate of interest shall be at the rate of 3.80% per annum so long as the employee is in service and thereafter 6% above the RBI rate with a minimum of 15% simple interest per annum from the date on which he ceased to be an employee of the bank. Therefore, the court below rightly held that the employee who ceases to be an employee of the bank is liable to pay interest at the rate of 15% per annum. In the plaint, the plaintiff bank calculated interest at the rate of 15% per annum on the balance amount of principal from 21.1.1985. A.S.No.636 of 1994 4 5. The learned counsel for the appellant submitted that the suit was filed for realisation of the principal balance sum due and the interest is worked out at 15% interest. The plaint claim of Rs.50,973.52/- includes the balance principal amount plus 15% as on the date of suit. In view of the relevant clause, I do not find any reason to find that the claim of the plaintiff at the agreed rate is not tenable. At the same time the counsel pointed out that the court below granted interest at the rate of 15% interest on the principal amount from the date of suit till realisation. According to the learned counsel for the appellant, the grant of 15% from the date of suit till realisation is unrealistic and unfair. I find that the submission of the learned counsel has some force. Section 34 of the Code of Civil Procedure conferred discretion on the civil court to order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree and with further interest at such rate not exceeding 6% per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the court thinks fit. As I said earlier, I do not propose to A.S.No.636 of 1994 5 interfere with the plaint claim which consists of balance principal sum plus interest at the agreed rate of 15%. At the same time the interest granted at the rate of 15% from the date of suit till realisation is not proper. Therefore, in the interest of justice, I find that the plaintiff is entitled to interest at the rate of 9% from the date of suit till date of decree and future interest at the rate of 6% from the date of decree till realisation. In the result, the appeal is partly allowed. The judgment and decree passed by the court below is modified to the above extent. The plaintiff is entitled to realise a sum of Rs.50,973.52/- with 9% from the date of suit till date of decree and future interest at the rate of 6% from the date of decree till realisation. There will be no order as to costs. HARUN-UL-RASHID, JUDGE. bkn/-