IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 10TH AUGUST 2009 / 19TH SRAVANA 1931 AS.No. 511 of 1995(F) ------------------- OS.86/1990 of PRL.SUB COURT,KOTTAYAM .................... APPELLANT/PLAINTIFF: ------------------------- STATE BANK OF TRAVANCORE REPRESENTED BY THE MANAGER, KANJIKUZHY BRANCH, KOTTAYAM. BY ADV. SRI.R.S.KALKURA RESPONDENTS/DEFENDANTS: --------------------------------- 1. K.I.THOMAS, S/O.K.E.IYPE, PROPRIETOR, BENGAL SPICES & CHEMICALS HAVING OFFICE AT KODIMAHA, KOTTAYAM & 9 C NEW CASIA, BAGAN LANE, CALCUTTA – 17 NOW RESIDING AT KALATHIL HOUSE, MUTTAMBALAM.P.O., MUTTAMBALAM KARA & MUTTAMBALAM VILLAGE. 2. SMT.SARALA THOMAS , W/O. K.I.THOMAS, RESIDING AT KALATHIL HOUSE, MUTTAMBALAM P.O. MUTTAMBALAM KARA, MUTTAMBALAM VILLAGE. ADV. SRI.BECHU KURIAN THOMAS FOR R1 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 10/08/2009, HE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: A.K.BASHEER & P.S.GOPINATHAN, JJ. = = = = = = = = = = = = = = AS.No.511 of 1995. = = = = = = = = = = = = = = Dated this the 10th day of August, 2009. J U D G M EN T Basheer, J. The appellant is the plaintiff in a suit for realisation of money. The court below decreed the suit in the following terms: “In the result, the suit is decreed with costs at confessional rate, for Rs.9,43,696-50ps. along with interest at 6% per annum, for the principal sum of Rs.7,95,741-10ps. from date of suit till date of realisation from the defendants 1 and 2 and out of all their movable and immovable assets and by sale of plaint schedule properties. Defendants 1 and 2 are allowed six months' time to pay off the decree debt failing which plaintiff can bring the plaint schedule properties for sale to realise the decree debt. Refund half court fee as per rules.” 2. The grievance of the appellant-Bank is that the court below committed serious illegality in awarding interest only at the rate of 6% from the date of suit till the date of realisation, especially since the contract rate was admittedly 20%. It was not in dispute that the transaction was commercial. More importantly the defendants had withdrawn all their contentions and confessed to a decree. 3. However, it is contended by learned counsel for the defendants that the court below had exercised the discretion vested in it in a proper and legal manner and therefore the contention now raised by the appellant bank is wholly unsustainable. AS.No.511 of 1995. :: 2 :: 4. It is beyond dispute that the defendants had availed of “bill discounting facility” from the plaintiff in the year 1989 on the strength of an agreement, undertaking to pay interest at the rate of 20%. The suit was instituted in 1990 when defendants committed default. 5. In the written statement filed by the defendants it was contended that they were ready and willing to pay off the outstanding balance in instalments. Though the defendants had raised a contention that plaintiff was not entitled to claim interest at the rate of 20%, the said contention along with all others were withdrawn when the suit came up for trial. A statement was in fact filed by the defendants in this regard. It was in terms of the said statement that the court below had passed the decree in question. Half court fee was also refunded to the plaintiff. 6. It is contended by learned counsel for the defendants that the Plaintiff/Bank having already recovered the entire amount covered under the decree in the year 1995 itself, it will be highly unjust and inequitable to modify the decree at this belated stage. 7. It is revealed from the affidavit filed by the Plaintiff before this court in November 1995 in support of CMP No.4742 of 1995 that the plaint schedule property mortgaged in favour of the bank was sold for an amount of Rs. 16,58,000/-. The amount due under the decree ( with interest at the rate of 6% per annum) to the tune of Rs. 11,90,957/- was already disbursed by the Execution court in October 1995 itself. The balance amount of Rs. 4,67,043/- is stated to be lying in court deposit. It is in the above context that the learned counsel for the defendants has contended before us that the plaintiff may not be justified now in demanding its pound of flesh at this belated stage. AS.No.511 of 1995. :: 3 :: 8. Per contra, learned counsel for the appellant has invited our attention to a number of decisions of the apex court as well as that of this court in support of his contention that the court below was not justified in refusing to grant the contractual rate of interest from the date of suit till the date of realization especially since it was admittedly a commercial transaction. Learned counsel has placed heavy reliance on a decision rendered by a Division Bench of this court in Indian Bank v. Abyson Rubber Industries reported in 1994 (2)KLT 909 wherein it was held, following the decision in B.Shivananda v.Anthra Bank Ltd. Reported in 1994(4)SCC 368, that transaction between the parties being commercial it was just and proper to direct the defendant to pay simple interest at the rate of 16% per annum from the date of suit till the date of realization. 9. However learned counsel for the defendants while inviting our attention to a decision of the apex court in Central Bank of India v. Ravindra and Ors. (2002(1) SCC 367) contended that the award of interest pendente lite and post decree is entirely at the discretion of the court as it is essentially governed by Section 34 of the Code of Civil Procedure dehors the contract between the parties. He further submits that the court below had apparently kept in view all the attending circumstances while decreeing the suit even though reasons were not stated in the judgment in so many words. 10. Learned counsel has also invited our attention to yet another decision of the apex court in N.M.Veerappa v.Canara Bank and Ors. reported in 1998(2)SCC317. In this decision the apex court held that so far as mortgage suits are concerned, the special provision in Order 34, Rule 11 alone will be applicable and not Section 34 of CPC. AS.No.511 of 1995. :: 4 :: 11. We have considered the submissions made by learned counsel for the parties. Having carefully considered the rival contentions of the parties, we are of the view that the decree passed by the court below calls for some modification to the extent it pertains to the rate of interest. It has to be remembered that the then prevailing bank rate was applicable to the transaction in question. It may be true that the lending rates have come down drastically over the years. Indisputably the defendants had agreed to pay interest at the rate of 20%. The discounting facility was availed of in the year 1989. The suit was instituted in 1990. The decree was passed by the court below when ultimately the defendants withdrew all their contentions, in November 1992. As mentioned earlier the mortgaged property was put to sale in 1995. Admittedly the bank has recovered the decree debt with interest at the rate of 6% per annum from the defendants. Having regard to the above and other facts and circumstances of the case we are of the view that interest of justice will be met if plaintiff is awarded interest at the rate of 12% from the date of suit till the date of decree and at the rate of 9% from the date of decree till realization. The decree and judgment of the court below are modified to the above extent. In all other respects the decree and judgment passed by the court below are sustained. A.K.BASHEER, JUDGE P.S.GOPINATHAN JUDGE kvs/pkk