1. Even though the appeal is listed for admission, with consent, it is taken for final disposal.

2. The appeal is admitted to consider the following substantial question of law:

(i) Whether the judgment and decree of Appellate Court is vitiated for not meeting the reasoning given by Trial Court?

(ii) Whether the Appellate Court was justified in awarding interest @ 18% on the decreetal amount in the absence of any contract?

3. The facts necessary for the disposal of this appeal can be summarized as follows:

4. During the course of the judgment parties will be referred to as per their ranking before the Trial Court.

5. The plaintiff files a suit for recovery of Rs.25,000/- with interest at the rate of 18% from 5.3.1992 to 5.3.1995. Thus, the total amount recoverable by the plaintiff would be Rs.38,500/-. The plaintiff would aver that defendant had borrowed a sum of Rs.25,000/-as a hand loan from the plaintiff in the month of November 1991 promising to repay the same within a period of three months. Since, the defendant was closely known to the plaintiff he obliged and paid the above said amount. In order to show his good gesture defendant issued a post dated cheque dated 5.2.1992 drawn on Syndicate Bank, Sirigere Branch, Chitradurga District. When the time agreed upon for the repayment of the said amount was about to expire the defendant personally contacted the plaintiff and requested him to grant further time and also requested him not to present the cheque for realization. In the month of March 1992, the plaintiff once again contacted the defendant to ascertain as to whether the said cheque can be presented for realization. The defendant consented and accordingly, the plaintiff through his bankers United Bank of India presented the cheque for realization. The said cheque was returned with an endorsement ‘account closed’. This fact was communicated by the plaintiff to the defendant on 17.3.1992. In the circumstances, the plaintiff was convinced that defendant had closed the account only to avoid to pay the amount borrowed and to defraud the plaintiff. Hence, a notice was issued on 26.6.1992. Notwithstanding the said notice the defendant did not choose to pay the amount. But however, an untenable reply was sent on 16.4.1992. The plaintiff also filed a criminal case in C.C.No.337/1992 on the file of CJM, Shimoga, for recovery of the amount. Incidentally, it is to be noticed that the said criminal case was filed for the offences punishable under Section 138 of the Negotiable Instruments Act, 1881 and also Section 420 of Indian Penal Code. It is not in dispute that the said criminal case is dismissed inasmuch as the subject matter is one of civil nature for recovery of money. Since, the amount was not paid the present suit is filed.

6. The defendant enters appearance files written statement inter alia contending that the said post dated cheque of 5.2.1992 was given by the defendant only towards the discharge of the loan, which was borrowed earlier in the year 1986. It is the specific plea that in the year 1986 the defendant had borrowed a sum of Rs.15,000/- from the plaintiff undertaking to pay the same with interest whenever the plaintiff demands the same. In the circumstances, the cheque was issued and the same had been presented and the amount borrowed in the year 1986 had been realized by the plaintiff. Hence, in the circumstances, the question of plaintiff basing his claim for recovery of money on the cheque dated 5.2.1992 would not arise. Another contention raised by the defendant is that the suit is barred by limitation inasmuch as the transaction has taken place in the year 1991 and the suit having been filed on 6.3.1995 is bared by statute.

7. On these spacious pleadings, the learned Trial Judge has framed the following issues:

(i) Whether plaintiff proves that defendant borrowed a sum of Rs.25,000/- from plaintiff in the month of November 1991 and issued a post-dated cheque bearing No.140414, drawn on Can