RSA No.3976 of 2008 1 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. RSA No.3976 of 2008 Date of decision:January 21,2010 Chhinder Singh .....Appellant vs. M/S Ravindera Trading Company .....Respondent CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG. --- Present: Mr. S.S.Brar, Advocate, for the appellant. None for the respondent. Rakesh Kumar Garg,J. This is defendant's second appeal challenging the impugned judgment and decrees of the Courts below whereby suit of the plaintiff- respondent for recovery of a sum of Rs.8,40,549/- along with pendente lite and future interest @ 12% per annum was decreed. At the time of motion hearing, learned counsel for the appellant has inter alia stated that keeping in view the fact that the appellant is an agriculturist the interest rate granted by the Courts below was exorbitant and on the higher side. On the basis of the aforesaid argument notice of motion was issued to the respondent. An offer given by learned counsel for the respondent that plaintiff-respondent was agreeable to charge interest @ of 10% instead of 12%. Since an amicable settlement was in sight, vide order dated 27.5.2009, the case was referred to the Permanent Lok Adalat of this Court keeping in view the provisions of Section 21 of the Legal Services RSA No.3976 of 2008 2 Authorities Act, 1987. However, no settlement could be reached between the parties before the Permanent Lok Adalat, and the matter was returned to this Court. It may also be mentioned at this stage, that appellant also filed Civil Miscellaneous Application No.8017-C of 2009, for recalling of the aforesaid order dated 27.5.2009. However, the aforesaid application was dismissed by this Court vide order dated 6.8.2009. It is also pertinent to mention that the appellant also challenged the aforesaid order in the Hon'ble Supreme Court in Special Leave to Appeal No.CC 16194/2009, and the same was dismissed by the Hon'ble Supreme Court vide its order dated 3.11.2009. Thus, keeping in view the aforesaid development and the order of Hon'ble the Supreme Court, I proceed to decide the appeal on merits. The brief facts of the case are that plaintiff-respondent filed a suit for recovery of an amount of Rs.8,40,549/- (i.e., Rs.4,89,175/- as principal amount and Rs.3,51,384/- as interest thereon calculated at the rate agreed rate of 24% per annum upto the date of filing of the suit i.e., 30.4.2004). The plaintiff-respondent also claimed further interest with effect from 1.5.2004 till its realization at the rate of 24% per annum. Upon notice, appellant-defendant appeared and filed written statement. It was asserted by the appellant that he was an agriculturist and being customer of the respondent, he used to bring his agricultural produce for sale through the respondent, and the appellant also used to borrow money in case of need and the account was being maintained in his name. In the year 1999, he settled whole of his account with the respondent and every amount was paid, and thereafter nothing remained towards him. He also started his dealings for taking money and returning the same with the Agricultural Rural Bank at Rania. It was further asserted that the loan RSA No.3976 of 2008 3 account shown by the respondent was false, fictitious and signatures of the appellant were also fictitious and forged. Thus, the dismissal of the suit was prayed for. On the basis of the pleadings of the parties, the following issues were framed by the trial Court:- 1. Whether the plaintiff is entitled to recover a sum of Rs.8,40,549/- along with interest from the defendant ?OPP 2. Whether the suit is within limitation ?OPP 3. Whether the suit is not maintainable in the present form ? OPD 4. Relief. On appreciation of evidence and hearing learned counsel for the parties, the trial Court decreed the suit against the appellant for recovery of Rs.8,40,549/- along with pendente and future interest at the rate 12% from the date of filing of the suit till its realization. Feeling aggrieved from the aforesaid judgment and decree of the trial Court, appellant filed an appeal which was dismissed by the Additional District Judge, Sirsa vide impugned judgment and decree dated 1.8.2008, affirming findings of the trial Court on all the issues. It may be noticed that the appellant has not addressed any arguments on issues No.2 and 3 before the trial Court as well as lower Appellate Court. The lower Appellate Court on appreciation of evidence had found that no fault can be found with the findings of the trial Court on issue No.1, as case of the plaintiff was fully proved and there was no evidence that appellant had not taken any loan from the respondent the year 1999, and in fact no evidence in this regard had come forward on behalf of the RSA No.3976 of 2008 4 appellant to prove his assertion, as pleaded in the written statement. The Courts below also recorded a finding of fact that appellant had agreed to pay interest at the rate of 24% per annum on the borrowed amount, and therefore, in view of the said agreed rate, the pendente lite and future interest at the rate of 12% cannot be termed to be exaggerated one. As noticed above, initially at the motion stage the appellant had raised the grievance that the Courts below have granted exaggerated rate of interest upto the date of filing of the suit at the rate of 24% per annum without any evidence on record.However, in addition of the aforesaid argument, learned counsel for the appellant has further raised his grievance that in any case after the passing of the decree the Courts below could not have granted future rate of interest on the decretal amount more than 6% per annum. Moreover, the loan was taken for agricultural purposes, therefore, charging more than 6% per annum was not to be allowed after institution of the suit. The learned counsel for the appellant has relief upon the judgments of this Court in the case of Sukhchain Singh v. Punjab and Sind Bank, Ferozepur Branch, (1990-1)PLR 702 and Hari Ram v. Shashi Jain (2009-4)PLR 828. It may also be noticed that in the grounds of appeal, learned counsel for the appellant had submitted that the following law points are involved in this appeal:- 1. Whether the entries of the respondent firm are forged and liable to be set aside ? 2. Whether the respondent plaintiff should approach debt recovery board in view of Haryana Relief of Agricultural Indebtedness (Miscellaneous Provision)Act, 1989 ? 3. Whether the interest could be imposed at the rate of 24% RSA No.3976 of 2008 5 which were not agreed between the parties ? 4. Whether the suit of the plaintiff is not maintainable in view of Haryana Relief of Agriculture Indebtedness (Miscellaneous Provision) Act 1989 ? However, on the basis of the argument raised above, the following substantial questions of law are framed in this appeal:- (i)Whether the interest at the rate of 24% per annum upto the date of filing of the suit has been granted by the Courts below without any evidence, and therefore, the finding of the Courts below are perverse ? (ii)Whether the Courts below erred at law while granting interest pendente lite and future interest at the rate of 12% per annum on the loan taken for agricultural purposes, as alleged ? (iii)Whether interest at the rate of more than 6% per annum can be awarded after passing of the decree ? It may be noticed that plaintiff-respondent in his pleadings had specifically pleaded that the defendant-appellant had agreed to pay the interest at the rate of 2% per month on the balance amount due towards him. In the written statement filed on behalf of the appellant the rate of interest was not disputed as the stand taken by the appellant was that in fact he had settled his dues with the plaintiff-respondent in the year 1999 and thereafter he had not taken any loan. However, the aforesaid plea of the appellant had not found favour with the Courts below. Neither any issue with regard to the rate of interest which is now being disputed was claimed by the appellant. Not only this, there was ample evidence brought on the record by the plaintiff-respondent by way of his own statement as PW1, resolution of the market Ex.P9 dated 8.4.1979 with regard to the rate of interest and statement of PW2 Janak Raj who also deposed in connection RSA No.3976 of 2008 6 with the rate of interest in the market. On the basis of the aforesaid evidence the trial Court decreed the suit for recovery of Rs.8,40,549/- which includes an amount of Rs.3,51,384/- as interest upto the date of filing of the suit. There is no rebuttal to the aforesaid evidence to controvert the findings to the effect that the agreed rate of interest between the parties was 24% per annum. Even before the lower Appellate Court the argument raised on behalf of the appellant was to the effect that excessive rate of interest has been awarded by the trial Court and nothing was pointed out to substantiate the same. Even before this Court, learned counsel for the appellant has failed to substantiate his argument that the Courts below have granted interest up to the date of filing of the suit at the rate of 24% per annum without any evidence on record. In fact, from the argument raised by the learned counsel for the appellant, it can be made out that there is no error in the findings of the Courts below to the effect that the agreed rate between the parties was 2% per month, and in fact the grievance raised is that the same is excessive. However, the learned counsel for the appellant ha failed to raise any argument as to how the rate of interest as aforesaid was exorbitant when the same was agreed between the parties. It is well settled that the Court is competent to grant agreed rate of interest between the parties. Thus, there is no merit in the plea raised by the learned counsel for the appellant. The second argument of the learned counsel to the effect that the rate of interest more than 6% per annum cannot be charged after filing of the suit on a loan taken for agricultural purposes, is without any basis. In fact, there are no such pleadings in the case on behalf of the appellant on the RSA No.3976 of 2008 7 basis of which the aforesaid argument can be raised on his behalf. It is not his case that the loan advanced to him was for some agricultural purposes. The defence taken by him is only to the extent that he is an agriculturist and he used to borrow money from the plaintiff-respondent. Moreover, there is no evidence on record to support the plea of the appellant that loan taken by him was for agricultural purposes. In fact, it is a case of total denial. Thus, in view of the aforesaid facts that neither any plea was raised in the pleadings, nor any such plea was proved, the argument in this regard and the second question of law, as raised by the appellant does not arise in the present case. Even otherwise, the Hon'ble Supreme Court in Bachaaj Nahar v. Nilima Mandal and another, JT 2008 (13) S.C.255, has authoritatively laid down that no substantial question of law can be raised in the Regular Second Appeal based on an argument which was neither raised nor pleaded before the Courts below. The Third substantial question of law as raised by the learned counsel for the appellant is also without any merit, as it is well settled that the trial Court is competent to grant interest at the agreed rate of interest and bar of section 34 of the Code of Civil Procedure will not come in its way. This Court in the case of Gurnam Singh verus 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 to claim compound interest at the rate of interest prescribed in the contract. This controversy has also been set at rest by the Hon'ble Supreme Court in the case of Central Bank of India versus RSA No.3976 of 2008 8 Ravindra and others AIR 2001 Supreme Court 3095 wherein it has been authoritatively held that the expression “principal sum adjudged” includes the amount of interest, charged on periodical rests, and capitalized with the principal sum actually advanced so as to become a amalgam of principal in such case where it is permissible as per contract between the parties and the principal sum so adjudged shall be treated as principal sum within the meaning of Section 34 CPC on which interest pendente lite and future interest may be advanced by the Court. Thus the aforesaid judgments of the Hon'ble Supreme Court and this Court also permit charging of pendente lite and future interest on the rate prescribed in the contract. Even otherwise, the learned counsel for the appellant has not referred to any evidence on record or referred to any judgment to show that the loan advanced on the tractor amounts to agricultural loan. No substantial question of law arises. For the reasons recorded hereinabove, I find no merit in this appeal and the same is dismissed. ( Rakesh Kumar Garg) Judge January 21, 2010 rk