RSA No. 1748 of 2011 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. RSA No. 1748 of 2011 (O&M) Date of Decision: 19.4.2011. Bank of India .......Appellant Vs. Hari Singh and others ......Respondents CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr. Arvind Kashyap, Advocate for the appellant. ..... SABINA, J. Appellant-plaintiff bank had filed a suit for recovery against the defendants. The case of the plaintiff in brief was that the defendants had taken a loan from the plaintiff bank for construction of four godowns at Patiala for renting them to Food Corporation of India (hereinafter referred as FCI). The limit of loan facility, sought by the defendants, was ` 27,00,000/-. On the said request, initially a term loan for an amount of ` 24,00,000/- was granted by the bank to the defendants with a stipulation that they would repay the same in monthly installments of ` 58,000/- along with interest @ 1½% OBR with minimum of 10½% with half yearly/quarterly rests on the balance due. The defendants executed a loan agreement dated RSA No. 1748 of 2011 (O&M) -2- 27.8.1980, letter of declaration and undertaking dated 27.8.1980. Defendant No.1 mortgaged the land, mentioned in para No. 7 and 8 of the plaint along with structure of godowns, to be built thereon, with the plaintiff. The defendants had acknowledged an amount of ` 26,87,711.89 as an outstanding amount with interest on 3.6.1981 but had failed to repay the loan. Hence, the suit for recovery was filed by the plaintiff. Defendants No. 1, 4 to 13, 17, 21 to 37 and 43 contested the suit, whereas the other defendants were proceeded ex parte. Defendants, in their written statement, averred that the loan was not disbursed to them in terms of the agreement dated 27.8.1980. The defendants were not supplied with the construction material at the controlled rates by FCI. Due to this reason, godowns could not be constructed within the stipulated period. The bank did not collect the rent from the FCI. On the pleadings of the parties, following issues were framed by the trial Court:- “1. Whether L.D.Samant is the Principal Officer of the plaintiff bank and is duly authorized to file the present suit? OPP 2. Whether the plaintiff bank is entitled to recover total amount of Rs. 40,45,453.58 Ps with interest and at what rate? OPP 3. Whether the rights of the defendants No. 9 to 17, 26, 34 and 37 and 43 have been purchased by other defendants except defendants Nos. 18 to 20 and the above said defendants have been RSA No. 1748 of 2011 (O&M) -3- wrongly joined as defendants? If so, its effect? OPP 4. Whether the suit is bad for non joinder of necessary parties? OPP 5. Whether the suit is not maintainable in the present form? OPD 6. Whether the suit is premature? OPD 7. Whether the plaintiff is not entitled to enforce the penal clause of the agreement? OPD 8. Whether the suit is false, frivolous and vexatious and that the defendants are entitled to special costs? OPD 9. Whether the defendants Nos. 18 to 20 are not liable for the recovery of the loan amount? OPD 10. Whether the suit is bad for misjoinder of defendants nos. 2 to 43? OPD Nos. 18 to 20. 11. Whether the plaintiff bank has no cause of action? OPD 12. Relief.” The trial court vide judgment and decree dated 18.11.1991, decreed the suit of the plaintiff for recovery of ` 40,39,453.58 along with interest @ 10.5% per annum till the date of the suit and future interest @ 6% per annum till realization. Aggrieved by the said judgment and decree, plaintiff preferred an appeal and the Additional District Judge vide judgment and decree dated 11.12.2010 held as under:- “In the interest of justice the impugned decree in RSA No. 1748 of 2011 (O&M) -4- hand is modified to the extent that it shall be a composite decree in the manner that the relief already granted by the court will remain the same. In addition thereto, it is ordered that the plaintiff bank will be entitled to recover the decretal amount with interest, if it remained unpaid for another six months, by way of sale of mortgage property as described in para No. 8 of the plaint. It is made clear that if the defendants failed to pay the outstanding decretal amount with interest within a period of six months from the date of this judgment, the plaintiff bank will be entitled to utilize the mortgaged property for the purpose of satisfying the outstanding amount. In order to facilitate the defendants to repay the outstanding amount, if any, the plaintiff bank will supply to the defendants, the details of the outstanding amount as per the judgment and decree dated 18.11.1991 within one month from today. The appeal is accordingly party allowed.” Hence, the present appeal by the plaintiff bank. Learned counsel for the appellant has submitted that the courts below had erred in not allowing the interest at the agreed rate between the parties. After hearing the learned counsel for the appellant, I am of the opinion that the instant appeal deserves dismissal. Both the courts below after appreciating the evidence led by the parties on record, have held that the defendants had taken loan for agricultural purposes. PW2-Harbans Singh, Officer RSA No. 1748 of 2011 (O&M) -5- of the plaintiff bank, in his cross examination admitted that the loan in question was indirectly an agricultural loan. Learned counsel for the appellant has failed to convince me that the loan had not been advanced for agricultural purposes. In these circumstances, no ground for interference with the rate of interest, allowed by the courts below, is made out. No substantial question of law arises in this appeal. Dismissed. (SABINA) JUDGE April 19, 2011 Gurpreet