The main legal principle established in the judgment is the discretion of the court in awarding interest in mortgage suits and the applicability of Order XXXIV Rule 11 of CPC. The judgment emphasized that the exclusion of Section 34 of CPC did not preclude the court from exercising its discretion in awarding interest.

The interesting point that has been raised in this case is, as to whether the interest as awarded in the judgment of the learned Prl. District Judge, Erode, in an appeal filed under Section 152 of the Tamil Nadu Co-operative Societies Act, 1983, which is payable at the rate of 6% per annum from the date of the suit as against the contractual rate of interest, is permissible in law?

2. The Nasiyanur Co-operative Housing Society is the petitioner in this writ petition challenging the judgment of the fourth respondent dated 2.02.2006 rendered in CMA.No.69 of 2004 and to quash the same.

2(a). The first respondent, borrowed a sum of Rs.1,20,000/-from the petitioner Society for the construction of house on 20.09.1995 and the borrowal was based on the mortgage deed, by which she agreed to repay the loan with interest at the rate of 16.5% per annum. Since the said amount was not paid by the first respondent, the petitioner Society preferred an arbitration suit before the third respondent, the Arbitrator, for recovery of an amount of Rs.1,48,540/-together with interest thereon and the same was numbered as ARC.No.62 of 1999-2000 and a decree was passed for a sum of Rs.2,33,209/- on 110. 2002.

2(b). Thereafter, the petitioner Society filed an execution petition to implement the said decree and it was at that time, as against the award of the Arbitrator, the first respondent filed an appeal under Section 152 of the Tamil Nadu Co-operative Societies Act,1983 before the Prl.District Judge, Erode, the 4th respondent herein.

2(c). The main contention of the first respondent in the appeal was that some of the amounts paid by the first respondent had not been given credit to and the petitioner Society ought not to have charged 16.5% interest. The said appeal was allowed by the 4th respondent, setting aside the award of the third respondent, holding that the rate of interest, viz., 18% per annum awarded by the Arbitrator is not valid in law and remanded the matter back to the Arbitrator with direction that interest to be calculated only at the rate of 6% per annum from the date of the suit and that the waiver of Rs.63,500/- towards penal interest is to be properly accounted for and also directed the third respondent to pass fresh orders, after giving opportunity to both the parties.

2(d). It is, as against the said Judgment of the 4th respondent, the present writ petition is filed by the petitioner Society on the ground that the order is against the provisions of the Tamil Nadu Co-operative Societies Act, 1983; that the above judgment was made in gross erroneous appreciation of facts and circumstances; that the direction to waive penal interest is without basis; that the discussion in respect of Order XXXIV Rule 11 of the Code of Civil Procedure relates to the Scheduled Banks and Nationalised Banks and not the Co-operative Societies, since the Co-operative Societies themselves are borrowing money at the rate of 15. % per annum and what is charged from the parties is 1% excess, viz., 16.5% and that therefore, the impugned judgment is not valid in law.

3. It is the main contention of the learned counsel for the petitioner Mr.P.K.Rajagopal that, in the arbitration proceedings and appeals under the provisions of the Tamil Nadu Co-operative Societies Act,1983, (in short, "the Act") either Section 34 of the Code of Civil Procedure (CPC) or Order XXXIV Rule 11 of CPC, has no application. According to him, the decree in arbitration suit is a money decree and it cannot be said to be a decree against a mortgage debt. Therefore, it is the agreed interest, which is liable to be paid by the first respondent/borrower.

3(a). It is his further submission that the judgments reported in N.M.Veerappa vs. Canara Bank (AIR 1998 SC 1101) and A.S.Ramakrishnan vs. Bank of Baroda (2001 (1) CTC 662), on which reliance was placed by the learned District Judge, have no relevance to the facts of the present case, since they arose under Section 21-A of the Banking R