IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE TUESDAY, THE 9TH DECEMBER 2008 / 18TH AGRAHAYANA 1930 AS.No. 528 of 1996() -------------------- OS.195/1994 of SUB COURT, PATHANAMTHITTA .................... APPELLANT(S): PLAINTIFF -------------- THE FEDERAL BANK LTD., ALWAYE A BANKING COMPANY HAVING ITS REGISTERED OFFICE AT ALWAYE, THROUGH ITS BRANCH MANAGER PATHANAMTHITTA BRANCH. BY ADV. SRI.K.ANAND (A.201) RESPONDENT(S): DEFENDANTS --------------- 1. KOSHY VARGHESE ALIAS VARGHESE KOSHY, S/O T.K.VARGHESE AGED ABOUT 49 YEARS, RESIDING AT THAVALATHIL PUTHEN VEEDU VETTIPURAM MURI, PATHANAMTHITTA VILLAGE 2. ROSAMMA KOSHY, W/O KOSHY VARGHESE, AGED ABOUT 46 YEARS RESIDING AT THAVALATTIL PUTHEN VEEDU, VETTIPURAM MURI PATHANAMTHITTA VILLAGE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 09/12/2008 , THE COURT ON THR SAME DAY DELIVERED THE FOLLOWING: PIUS.C.KURIAKOSE, J. - - - - - - - - - - - - - - - - - - - - - A.S.No.528 OF 1996 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 9th day of December , 2008 JUDGMENT The plaintiff - Federal Bank being aggrieved by the rates of interest pendente lite and future awarded by the trial court in a suit for money has preferred this appeal. Going by the averments in the plaint and the various documents relating to the transaction between the bank and the defendants, the liability of the defendants to the bank arose out of a commercial transaction. The interest both pendente lite and future was claimed @ 24.75 % per annum with quarterly rest on the basis of contract between the parties which is evident from the documents marked on the side of the appellant bank. The respondent defendants remained ex parte in the suit and the learned Subordinate Judge proceeded to decree the suit on the basis of a claim affidavit which was submitted on behalf of the appellant bank by the bank's branch Manager. The plaint claim consisted of the principal amount of Rs. 2,17,541/- ( the amount due to the bank as per the account maintained by the bank in the name of the defendants in respect of the AS.No.528/96 2 suit transaction) together with interest at the rates mentioned above. The learned Sub Judge granted a decree for principal amount claimed in the suit. But without assigning any reason the court reduced the rate of interest both pendent elite and future to 12% per annum. 2. Referring to Section 34 of the Code of Civil Procedure and particularly to the proviso therein, Sri.K.Anand, learned counsel for the appellant would urge that the court was bound to grant interest at a reasonable rate pendent elite on the principal amount claimed in the suit, which was adjudged by the court as correctly due to the bank, as on the date of the suit. Sri.Anand further submitted that as regards the future interest to be granted the normal rule is that the same shall not exceed 6% per annum. The proviso shall apply in this case and there was justification for granting further interest at the contractual rates which in this case 24.75% per annum. 3. Even though the respondents were served with notice, they have not entered appearance before this court and naturally the submissions of Sri.Anand were not resisted by anybody. 4. Having considered the averments in the plaint and the AS.No.528/96 3 evidence adduced on the side of the appellant plaintiff in the light of Section 34 of CPC and the judicial precedents pertaining to the application of Section 34, I am of the view that the submissions of Sri.Anand are meritorious. Under Section 34, the pendente lite interest is to be granted at a rate deemed by the court to be reasonable. In the instant case where the defendant did not contend that the contractual rate of interest is not reasonable, there was every justification for granting pendente lite interest at the contractual rate itself. As for the appellants' claim for future interest the pleadings will show that the liability has arisen out of a commercial transaction. That being the position, even future interest could have been anything between 6% per annum and the contractual rate of interest. Having considered th totality of the circumstances attending on this case, I feel that the appellant bank should have been granted pendente lite interest @ 20% per annum and future interest @ 18% per annum. 5. The result is that the appeal will stand allowed to the following extent: The judgment and decree under appeal are modified to the extent AS.No.528/96 4 they relate to interest granted pendente lite and future. The pendente lite interest ( from the date of suit till the date of decree) will stand modified as 20% simple interest per annum and future interest ( interest from the date of decree till date of realisation) will stand modified as 18% per annum. The decree of the court below will stand confirmed in all other respects. The appellant will be entitled for proportionate costs in this appeal also. PIUS.C.KURIAKOSE JUDGE sv. AS.No.528/96 5