IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD WEDNESDAY THE NINETH DAY OF JUNE TWO THOUSAND AND TEN PRESENT: THE HONOURABLE SRI JUSTICE P. S. NARAYANA * * * APPEAL SUIT No. 1 3 0 1 of 1990 Between: Indian Bank, Punganur Branch, Represented by its Zonal Manager, Sri M. Sukumaran, Hyderabad … Appellant-Plaintiff V/s. M/s. Prameela Silk Industries Represented by its Proprietor Sri U. Munirathnam & 2-Ors. … Respondents-Defendants Counsel for the Appellant : Sri P.L. Narasimha Sarma Counsel for the Respondents : Sri R. Radhakrishna Reddy The court made the following : Judgment (follows 2nd page) THE HONOURABLE SRI JUSTICE P. S. NARAYANA APPEAL SUIT No., 1301 OF 1990 J U D G M E N T : The Indian Bank represented by its Zonal Manager had preferred this appeal as against the judgment and decree made in OS.No.142 of 1987 on the file of Subordinate Judge, Madanapalle. Though the said suit was decreed being aggrieved of the aspect of interest, this appeal had been preferred. 2. Sri Suresh, the learned counsel representing the appellant had taken this court through the grounds of appeal and also pointed out Order-34, Rule-11 of CPC and also Section 34 of CPC and would maintain in-as- much-as Order-34, Rule-11 of CPC alone is applicable and Section 34 CPC has no application. The Court has no jurisdiction or discretion except the grant of contractual obligation from the date of suit and till the date of redemption. 3. On the contrary, Sri Radhakrishna Reddy, the learned counsel representing the respondents had taken this court through the findings recorded by the learned Subordinate Judge, Madanapalle and would maintain that in the light of convincing reasons recorded, since this being the discretion of the Court, the findings are to be confirmed and the appeal to be dismissed. 4. Heard the counsel on record. In the light of the submissions made by the counsel on record, the following points arise for consideration in this appeal. 1) Whether the findings recorded by the trial court even in relation to the interest to be confirmed or to be set aside in the facts and circumstances of the case? 2) If so, to what relief the parties would be entitled to ? 5. Point No.(1) : For the purpose of convenience, the parties had been referred to as shown in OS.No.142 of 1987 on the file of Subordinate Judge, Madanapalle. The suit was filed by the appellant-plaintiff on the strength of a mortgage. It was pleaded in the plaint that the first defendant as principal borrower and defendants 2 and 3 as guarantors to the first defendant borrowed a sum of Rs.10,000/_ (Rs.Ten thousand only) under open Loan cash credit facility promising to pay the same at 4.5% interest per a num over the official rate of the RBI with a minimum of 13.50% per annum and evidencing the same the first defendant executed the suit promissory note and an agreement for Demand Cash credit on the hypothication of movable property on 26-2- 1981. The loan was obtained by the first defendant to run the silk Industry. On the same day, the third defendant also executed an agreement of gurantee in favour of the Plaintiff – Bank while the second defendant voluntarily agreed to create an equitable mortgage of the properties described hereunder and the second defendant also delivered the original sale deed to the plaintiff bank on 27-2-1981 on the following day i.e., 28-2-1981. The second defendant also acknowledged having created equitable mortgage of the schedule property in favour of the bank as Security to the loans advanced to the first defendant. The first and second defendant further executed renewal promissory notes and acknowledgement and confirmation of debt on 31-12- 1983 and 31-12-1985 and thus acknowledged the debt due by them to the plaintiff-bank. Inspite of several repeated demands, the defendants did not discharge the debt. The balance due by the defendants is shown in the ledger extract filed along with the plaint which may be read as part and parcel of this plaint. On the same day, i.e. , 26-2-1981 the first defendant as principal borrower and 2 and 3 defendants as guarantors to the first defendant borrowed another sum of Rs.20,000/- (Rs. Twenty thousand only) from the plaintiff-bank as medium term loan and in evidence thereof first and third defendants executed the suit promissory note promising to pay the same at 2.85% per annum over the official rate of RBI with a minimum of 11.85% interest p.a. The first defendant also executed an agreement of guarantee on 26=2=1981 besides being a co-obligant. The second defendant on the same day i.e., 26-2-1981 agreed to be a guarantor to the first defendant and she also mortgaged the schedule properties in respect of the loan as well and the second defendant also delivered her documents of title and confirmed and acknowledged having deposited her title deeds in respect of the schedule property on 28-2-1981. The said acknowledgement dated 28-2-1981 is one consolidated document to cover the transactions by the first defendant with the plaintiff bank viz., the open loan credit facility explained in para 3 of the plaint and the loan described above. The first defendant and the second defendant also acknowledged the said debt on 20-2-1984 and 08- 2-1986 and also executed necessary documents of renewal I n favour of the plaintiff bank. The ledger extract filled in respect of the said account separately shows the amount due by the defendants to the plaintiff-bank interest at 13./5% from 26-2-1981 to 31-12-1981 at 15% from 01-1-1982 to 31-3-1983 and at 14% from 01-4-1983 till the date is charged as per the norms of the Reserve Bank of India. The rate of charge of interest in respect of the transaction under O.c.c. and M.T.L. are one and the same. It is further pleaded that the first defendant as principal borrower and second defendant as guarantor to the first defendant borrowed a sum of Rs.20,000/- (Rs. Twenty thousand only) on 22-2-1983 and in evidence thereof the first defendant executed a demand promissory note while the second defendant executed an agreement of guarantee on 22-2-1983. The first defendant also executed a deed of hypothecation on the same day. The second defendant agreed to keep the schedule property as security and also created equitable mortgage of the schedule property, and in evidence thereof the second defendant also acknowledged and confirmed the creation of equitable mortgage in respect of this loan also. Defendants 1 and 2 also acknowledged the debt due to the plaintiff-bank on 31-12-1983 and 31- 12-1985 and executed necessary documents in favour of the plaintiff bank and thus acknowledged the debt. The debt due in respect of this loan is shown in the ledger extract filed separately along with the suit. Interest is charged at 15% p.a. from 22-2-1983 to 30-9- 1983, at 14% from 01-10-1983 till 30-9-1983 at 16% from 01-10-1983 till 30-6-1985 at 14% from 01-7- 1985 till date is charged as per the norms of the Reserve Bank of India. Inspite of several repeated demands and requests made by the plaintiff bank and legal notice dated 03-9-1986, the defendants did not discharge the debt described above and hence the suit is filed for recovery of the suit amount with interest, covered by the above explained three transactions. Particulars of mortgage: a) Name of the Mortgagee: Indian Bank, Pugnaur branch, Punganur, represented by its Zonal Manager, Sri M.Sukumaran b) Name of the Mortgagor: The second defendant, viz. Rani Prameela c) Date of Mortgage : 27-02-1981 d) Sum secured : Detailed as above in the Plaint e) Rate of Interest : Detailed as above in the Plaint f) Property mortgaged : vide plaint schedule g) Amount due : vide particulars of valuation 6. The suit was resisted and ultimately the learned Judge after recording the reasons, decreed the suit as hereunder: i) that the defendants do pay into court on or before the 7th day of January 1989 or any later date upto which time for payment may be extended by the court, the said sum of Rs.1,29,125-00 with further interest on Rs.50,000/- at 6% per annum from 08-1-1989 till the date of realization. ii) that on such payment and on payment thereafter before such date on the court may fix of such amount as the court may adjudge due in respect of such costs of the suit and such costs, charges and expenses as may be payable under Rule 10 together with such subsequent interest as may be payable under Rule 11 of Order XXXIV of the First schedule to the Code of Civil Procedure 1908, the plaintiff shall bring into court all documents in his possession or power relating to the mortgaged property in the plaint mentioned, and all such documents shall be delivered over to the defendants or to such person as he appoints, and the plaintiffs shall, if so required, recovery or retransfer the said property from the said mortgage and clear of and from all encumbrances created by the plaintiff or any person claiming under him or any person under whom he claim and shall, if so required, deliver unto the defendants quiet and peaceful possession of the said property. iii) And it is hereby further ordered and decreed that in default of payment as aforesaid, the plaintiff may apply to the court for a final decree for the sale of the mortgaged property and on such application being made, the mortgaged property or a sufficient part thereof shall be directed to be sold and for the purpose of such sale the plaintiffs shall produce before the court or such officer as it appoints all documents in his possession or power relating to the mortgaged property. iv) And it is hereby further ordered and decreed that the money realized by such sale shall be paid into court and shall be only applied (after deduction therefrom of the expenses of the sale) in payment of the amount payable to the plaintiff under this decree and under any further orders that may be passed in this suit and in payment of any amount which the court may adjudge due to the plaintiff in respect of such costs of the suit, and such costs charges and expenses as may be payable under Rule 10, together with such subsequent interest as may be payable under Rule 11 of Order XXXIV of the First schedule to the Code of Civil Procedure 1908 and that the balance, if any, shall be paid to the defendants or other persons entitled to receive the same. v) And it is hereby further ordered and decreed that, if the money realized by such sale shall not be sufficient for payment in full of the amount payable to the plaintiff as aforesaid, the plaintiff shall be at liberty (where such remedy is open to him under the terms of his mortgage and is not barred by any law for the time being in force) to apply for a personal decree against the defendants for the amount of the balance and that the parties are at liberty to apply to the court from time to time as they may have occasion and on such application or other wise the court may give such directions as it thinks fit. 7. Aggrieved by the awarding of interest and decreeing thereof, this appeal had been preferred. 8. Point No. (ii): Though certain submissions had been made in the light of the relevant portions of the Code of Civil Procedure since this being the discretion of the court. In the light of the reasons recorded by the trial, this court does not see any reason and accordingly the said findings are confirmed. 9. In the result, the appeal being devoid of merits and the same shall stand dismissed. No costs. __________________________ JUSTICE P. S. NARAYANA. 09-06-2010. I s L THE HONOURABLE SRI JUSTICE P.S. NARAYANA A.S.No. 1301 of 1990 Circulation Entry No. 33 Date: 09-06-2010 Computer No. 43 Court Master: I s L