Court has power even to alter contractual rate of interest.

M. Thanikachalam, J.

In a suit for recovery of a sum of Rs.82,613.85, with subsequent interest, filed by the plaintiff bank, the first defendant unable to resist the same successfully, suffered a decree and the result is this appeal.

2. The first respondent in this appeal as plaintiff had filed a suit against the appellant and others, for recovery of a sum of Rs.82,613.85 with interest thereon at 14« percent per annum. According to the first respondent/ plaintiff, the first defendant on his behalf, and as the power of attorney for other defendants, borrowed a sum of Rs.10,000/- on 27.11.1973 as crop loan, that they have borrowed a further sum of Rs.50,000/-, for the purchase of a tractor and other farm implements, as per the agreement dated 18.2.1975. It is the further case of the plaintiff, that the defendants though agreed to repay the loan amount on instalment basis, failed to pay the same, despite repeated request and demand. The first defendant as the power agent, had acknowledged the liability, by executing the revival letters on 16.1.1978, 25.12.1980, 12.12.1983 and 20.10.1984 and in this view, according to the plaintiff, the suit is in time. The effort of the bank, to realise the amount outside the Court failed despite notice and therefore, a suit came to be filed, for recovery of the above said amount.

3. The first defendant opposed the claim of the plaintiff bank, admitting the borrowing, that he did not agree to pay compound interest, then adding the interest to the principal at regular intervals, that if at all, the plaintiff could claim only simple interest at reasonable rate and in this view, the amount claimed in the plaint should be scaled down substantially. The defendant challenged the inclusion of some sundry expenses such as, inspection charges, insurance amount, etc. It is the further contention of the appellant/first defendant, since he had not executed any revival letters, as alleged in the plaint, the suit is barred by limitation. The further defence of the appellant is that, since the amounts were advanced for agricultural purposes, as such, the plaintiff bank is not entitled to claim interest, especially the subsequent interest at 14 «%.

4. On the above pleadings, the parties went on trial before the learned Subordinate Judge, Krishnagiri. In order to substantiate the plaint allegations, one Ramachandran has been examined as P.W.1, seeking aid from nine documents, exhibited as A1 to A9. The first defendant/appellant has been examined as D.W.1, to nullify the effect of the above evidence.

5. The learned Subordinate Judge, carefully scanning the oral and documentary evidence and also considering the other attending circumstances, came to the conclusion,

(i) that in view of the specific clauses in the agreement, the plaintiff bank is entitled to add interest to the principal amount and in this view, question of scaling down the claim made by the plaintiff is not available to the contesting defendant,

(ii) that the first defendant had executed revival letters (Exs.A5 to A8) under which he had acknowledged the liability, as well as paid a sum of Rs.25,000/- on 25.3.1986 and in this view, the suit is well within in the time,

(iii) that though the loan was advanced, for the purchase of a tractor for agricultural purpose, the first defendant had every chance to utilise the Tractor for commercial purpose, such as lending the same to third parties and in this view, the transaction should come within the meaning of commercial transaction, thereby enabling the bank to claim contractual rate of interest, de hors section 34 of C.P.C. and

(iv) that the plaintiff bank is entitled to claim the sundry expenses incurred, such as insurance amount and other expenses.

Thus holding, a decree has been granted as prayed for, awarding interest at 14% per annum from the date of the plaint till the date of realisation.

6. The first defendant ,aggrieved by the decree and Judgment of the trial Court, has preferred this appea