THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT NO.731 OF 2001 Date: 02-02-2011 Between: Nadipalli Vijayalakshmi .. Appellant And Vijaya Bank and others .. Respondents THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT NO.731 OF 2001 JUDGMENT: The 4th defendant in O.S.No.50 of 1992 on the file of the Additional Senior Civil Judge, Rajahmundry, is the appellant herein. 2. The suit was filed by the bank against the 1s t defendant and 7 others, who are said to be joint borrowers of property of loan for agricultural purposes and all of them are mutually guarantors and the appellant is said to have taken a loan of Rs.25,000/-. As the defendants did not pay the money, the suit was filed for recovery of money. 3. The defendants contended before the Court that they are agriculturists and that the suit is barred by time and some of the benefits of waiver of the loan have to be granted to them. 4. On the above pleadings, the following issues were framed for trial: 1. Whether the plaintiff is entitled for the suit amount from the defendants? 2. Whether there is valid creation of equitable mortgage? 3. Whether the suit is bad for multiferiousness? 4. Whether the interest claimed is usurious and penal? 5. Whether the defendants are entitled for benefits of any debt relief enactments? 6. To what relief? 5. On behalf of the plaintiff, P.W.1 was examined and marked Exs.A- 1 to A-56 and on behalf of the defendants, D.W.1, who is defendant No.8, was examined and no documents were marked. 6. After considering the evidence on record, the learned Additional Senior Civil Judge, Rajahmundry passed the judgment and decree dated 18.11.1999 for the suit amounts due by granting future interest at 14% per annum simple in nature on the principal sum of Rs.1,75,000/- consisting of Rs.25,000/- availed by each of the defendant Nos.1 to 7. Questioning the grant of the future interest at 14% per annum, the present appeal is filed. 7. The point for consideration is whether there are any grounds to interfere with the interest granted by the lower Court subsequent to the suit? POINT: 8. Evidently, as can be seen from the pleadings and material on record, the defendants are agriculturists and the loan was said to have taken for agricultural purposes under Section 21-A of the Banking Regulation Act, it is found by the lower Court that the interest rate cannot be reduced. However, under Order XXXIV Rule 11 of Civil Procedure Code, discretion has been granted to the Court to grant such rate of interest, which the Court feels just and reasonable. Under Section 34 of Civil Procedure Code, in case of commercial transactions, the Court has got power to grant contractual rate of interest but, however, in this case, the transaction between the parties is not a commercial transaction and since it is only a loan for agricultural purposes and when the contractual rate of interest was granted till the date of the suit, I feel the defendants can be given the benefit of the discretion available under Order XXXIV Rule 11 of Civil Procedure Code and I feel that the interest of justice would meet if the future interest on principal amount is directed to be paid at 6% per annum at simple rate from the date of the suit till the date of realization. With the above modification, the appeal is allowed. No costs. ________________________ N.R.L.NAGESWARA RAO, J 2nd February, 2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT NO.731 OF 2001 Date: 02-02-2011 MR