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2009(1) Bankmann 616 (H.P.)
HIMACHAL PRADESH HIGH COURT
Rajiv Sharma, J.
Himachal Gramin Bank —Appellant
versus
Narain Gir and Ors. —Respondents
RSA No. 250 of 1998
Decided on 28.11.2008
Counsel for the Parties:
For the Appellant:Ms. Devyani Sharma, Advocate.
For the Respondents:Mr. Ashwani Sharma, Advocate.
IMPORTANT POINT
The term “excessive” is a relative term; what may be excessive is one case may not be so in another. Much will depend on the circumstances of each case.
Headnote:(i) Banking Regulations Act, 1949—Sections 21 and 35—Civil Procedure Code, 1908—Section 34—Grant of interest.
(ii) Suit for recovery of Rs. 31,307—Decreed with costs and future interest @ 14% p.a. with quarterly rests from rate of filing of suit til realization of decree amount—Appeal against decree—Appeal—Appellate court directed the JD to pay Rs. 31,307 with costs on or before 30.9.1998 or else future interest @ 14% p.a. from date of decree till realization.
(iii) Civil Procedure Code, 1908—Section 110—RSA on substantial question of interest—Held: Appellate Court could not slash the rate of interest and the period “from the date of filing of suit” to “from the date of decree”—Future interest could not be made conditional—Impugned order is modified.
Rajiv Sharma, J—This Regular Second Appeal is directed against the judgment and decree dated 17.12.1997 passed by the learned District Judge, Mandi in Civil Appeal No.6 of 1995.
2. Brief facts necessary for the adjudication of this Regular Second Appeal are that the appellant-plaintiff (hereinafter referred. to as ‘the plaintiff’ for convenience sake) filed a suit in the Court of learned Sub-Judge, 1st Class (1), Mandi, H.P. for recovery of Rs. 31,307. The suit was resisted by the respondents defendants (hereinafter referred to as ‘the defendants’ for convenience sake). The learned Sub-Judge decreed the suit on 30.12.1994 with costs for recovery of Rs.31,307 with future interest @ 14% per annum with quarterly rests from the date of filing of the suit till the final realization of the decretal amount. The defendants feeling aggrieved by the judgment dated 30.12.1994 preferred an appeal before the learned District Judge, Mandi. The learned District Judge, Mandi came to a conclusion that the defendants could not escape from the liability to pay the loan amount along with interest. However, the learned District Judge directed the defendant to pay a sum of Rs.31,307 along with costs on or before 30.9.1998 and in the event he failed to pay the amount by 30.9.1998, the plaintiff-Bank was entitled to future interest from the date of decree @ 14% per annum till the realization of the decretal amount in full. The Regular Second Appeal has been filed only on the question of interest. The Regular Second Appeal was admitted on the following substantial question of law:
1. Whether the impugned judgment and decree can be passed by the learned lower appellate Court particularly in view of the provisions of the Banking Regulation Act as amended from time to time and Section 34 of the Code of Civil Procedure?
3. Ms. Devyani Sharma, Advocate has strenuously argued that the learned District Judge could not alter the judgment and decree passed by the learned Sub-Judge whereby he had directed the payment of interest @ 14% per annum with quarterly rests. She has strongly relied upon Corporation Bank v. D.S. Gowda and Anr.1 and State Bank of India v. M/s. Himalaya Engineer Works and Ors.,1997(2) Sim LC 373. She has further argued that the directions/circulars issued by the Reserve Bank of India under the Banking Regulation Act, 1949 are binding and they cannot be deviated from. She lastly contended that the District Judge could not alter the contract by making the payment of interest conditional.
4. Mr. Ashwani Sharma, Advocate has supported the judgment and decree dated 17.12.1997 passed by the District Judge whereby the defendants have been directed to pay the decretal amount by 30.9.1998 failing which the Bank could recover interest @ 14 per annum till the realization of the decretal amount in full.
5. I have heard the learned counsel for the parties and perused the record carefully. The defendants have admitted taking of loan from the plaintiff Bank and execution of all the documents i.e. Ex. PW1C, Ex. PW1B, Ex. PW2B, Ex. PW2C, Ex. PW2D, Ex. PW2E, Ex. PW 2F, Ex. PW2H, Ex. PW4A, Ex. PW3A, Ex. PW5A, Ex. PW5C and mark ‘X’. The learned Sub-Judge decreed the suit with future interest @ 14% per annum with quarterly rests. The learned District Judge taking a sympathetic view had directed that the interest would be payable if the decretal amount is not paid on or before 30.9.1998.
6. The question raised in this Regular Second Appeal is no more res integra in view of the law laid down by their Lordships of the Hon’ble Supreme Court in Corporation Bank v. D.S. Gowda and Anr. (supra). Their Lordships have held as under:
“The real question, therefore, is whether the charging of interest at 16.5% per annum with quarterly rests is so obnoxious as would attract the provisions of the Usurious Loans Act, in this case the Mysore Act, Section 3(1) indicates that if in any suit the Court has reason to believe that the transaction in question was substant
