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PUNJAB & HARYANA HIGH COURT
G.R.Majithia and S.K.Jain JJ.
Chhaju Ram
Versus
State Bank Of India
Regular Second Appeal No. 1148 of 1989,
Decided On : FEBRUARY 8, 1994
INTEREST - SECTION 34, CIVIL PROCEDURE CODE - SUMMARY OF JUDGEMENT - THE COURT HELD THAT THE TRIAL JUDGE WAS RIGHT IN AWARDING INTEREST PENDENTE LITE AND FUTURE INTEREST ON THE PRINCIPAL AMOUNT CLAIMED IN THE SUIT. THE EXECUTING COURT COULD GO INTO THE QUESTION, IN EXECUTION PROCEEDINGS, WHETHER FUTURE INTEREST WAS AWARDED IN CONFORMITY WITH THE PROVISIONS OF SECTION 34, CIVIL PROCEDURE CODE OR NOT.
Fact of the Case:
THE BANK FILED SUITS FOR RECOVERY OF LOANS ADVANCED BY THEM IN TERMS OF LOAN DOCUMENTS. THE TRIAL JUDGE AWARDED INTEREST PENDENTE LITE AND FUTURE INTEREST ON THE PRINCIPAL AMOUNT CLAIMED IN THE SUIT. THE EXECUTING COURT, WHILE ALLOWING THE OBJECTION PETITION FILED BY THE JUDGMENT-DEBTORS, HELD THAT THE DECREE-HOLDER IS ENTITLED TO RECOVER FUTURE INTEREST AT RATE AWARDED IN THE DECREE.
Finding of the Court:
THE COURT HELD THAT THE TRIAL JUDGE WAS RIGHT IN AWARDING INTEREST PENDENTE LITE AND FUTURE INTEREST ON THE PRINCIPAL AMOUNT CLAIMED IN THE SUIT. THE EXECUTING COURT COULD GO INTO THE QUESTION, IN EXECUTION PROCEEDINGS, WHETHER FUTURE INTEREST WAS AWARDED IN CONFORMITY WITH THE PROVISIONS OF SECTION 34, CIVIL PROCEDURE CODE OR NOT.
Issues: WHETHER THE TRIAL JUDGE WAS RIGHT IN AWARDING INTEREST PENDENTE LITE AND FUTURE INTEREST ON THE PRINCIPAL AMOUNT CLAIMED IN THE SUIT.
Ratio Decidendi: THE COURT RELIED ON THE JUDGMENT IN DEVINDER KUMAR AND OTHERS V. SYNDICATE BANK AND ORS., (1994-1) 106 P.L.R. 1, WHEREIN IT WAS HELD THAT THE PLAINTIFF-BANK WILL BE ENTITLED TO RECOVER INTEREST PENDENTE LITE AND FUTURE INTEREST TO BE DETERMINED AS UNDER: (I) INTEREST PENDENTE LITE IS PAYABLE ON THE PRINCIPAL SUM ADJUDGED, BUT NO INTEREST IS PAYABLE ON THE AMOUNT OF INTEREST ADJUDGED ON SUCH PRINCIPAL SUM. (II) FUTURE INTEREST WILL BE AWARDED ON THE CONTRACTUAL RATE OF INTEREST AND IF THE CONTRACTUAL RATE OF INTEREST IS NOT ESTABLISHED, AT THE RATE AT WHICH THE MONIES ARE LENT OR ADVANCED BY THE NATIONALISED BANKS IN RELATION TO COMMERCIAL TRANSACTIONS.
Final Decision: THE COURT MODIFIED THE JUDGMENTS AND DECREES OF THE COURTS BELOW IN THE LIGHT OF THE RULE OF LAW LAID DOWN IN DAVINDER KUMAR'S CASE (SUPRA). THE APPEALS WERE DISPOSED OF ACCORDINGLY. THE ORDERS PASSED IN CIVIL REVISIONS WERE SET ASIDE AND THE CASES WERE REMITTED TO THE EXECUTING COURT FOR DISPOSING OF THE OBJECTIONS PETITIONS IN THE LIGHT OF THE ABOVE OBSERVATIONS.
G.R.Majithia, J.
1. This judgment disposes of Regular Second Appeals Nos. 1148 of 1989 and 970 of 1990 and Civil Revisions No. 3655 and 3656 of 1989, 287 of 1991,589 of 1989 and 2385 of 1992.
2. Regular Second Appeal No. 1148 of 1989 is directed against the judgment and decree of District Judge, Jind affirming , on appeal, those of Additional Senior Subordinate Judge, Jind, passing a decree for recovery of Rs. 1,75,826.90 in favour of State Bank of India, Jind (for short, the Bank) and allowing it to recover future interest at the rate of 11 per cent per annum on the principal sum from the date of filing of the suit till realization.
3. Regular Second Appeal No. 970 of 1990 is directed against the judgment and decree of District Judge, Jind, modifying, on appeal, the judgment and decree of the trial Judge decreeing the suit of the Bank for the recovery of an amount of Rs. 1,48,842.80 and allowing future interest at the rate of 12.5 percent per annum on the amount of Rs 44,300/- from the date of filing of the suit till realization.
4. In civil Revision No. 3655 of 1989, the Executing Court, while allowing the objection petition filed by the judgment-debtor, observed thus:-
"For the aforesaid reasons, I partly accept this objection petition and hold that the decree dated 29.10.1986 awarding interest at the rate of 11 1/2% per annum is not executable and that the plaintiff/decree holder shall be entitled to interest pendente lite and future interest at the rate of 6% per annum only."
5. In C.R. 3656 of 1989 the Executing Court While allowing the objection petition filed by the judgment-debtors against the execution of decree dated November 8, 1986, observed thus:-
"For the aforesaid reasons, I partly accept this objection petition and hold that the decree dated 30-9-1986 awarding interest at the rate of 12 1/2% per annum is not executable and that the plaintiff/decree holder shall be entitled to interest pendente lite and future interest at the rate of 6% per annum only."
"C. R. Nos. 287 of 1991 and 589 and 2385 of 1992 have been filed by the judgment-debtors against the orders of the Executing Court dismissing their objections Under Section 47, Civil Procedure Code, against the execution of the decrees. In the decrees, future interest had been allowed at the rate of 11% per annum from the date of filing of the suit till realization of the decretal amount.
R.S.A. No. 1148 of 1989 came up for motion hearing before a learned single Judge on September 8, 1989 and the following order was passed:-
"Admitted to D.B. in view of the difference of opinion between the judgments of this Court in 1989 P.L.J. 329 and 1987 (1) Cur. LJ. 778 vis-a-vis 1989(1) P.L.R. 460 and A.I.R. 1988 Punjab and Haryana 45, and some other High Courts which support the later view. Since the point is likely to arise in bank cases every day, it will be desirable to constitute a Division Bench as early as possible and for that matter, orders of Honble Chief Justice be obtained.
R.S.A. No. 970 of 1990 came up for motion hearing on July 10, 1990 and while admitting the appeal the motion Bench directed that the appeal be set down for hearing with R.S.A. No. 1148 of 1989.
6. When the civil revision petitions Nos. 3655 and 3656/89 came up for motion hearing, the learned Single Judge Passed the following order on April 16, 1991 :-
"The sole point raised in this revision petition is, whether the interest beyond 6 per cent per annum Under Section 34 of the Code of Civil Procedure, or the agreed rate from the date of decrees till payment it to be granted especially in case of suits filed by the Banks for recovery of loans advanced by them in terms of loan documents. Mr. Gupta, appearing for the petitioner has brought to my notice various judgments reported as 1989 P.L.J. 329 and 1988 P.L.J. 351 taking one view and 1989 (1) P.L.R. 460, A.I.R. 1989 Pb and Hr. 45,1982 P.L.R. 472, and 1989 Simla Law Journal 772 taking a contrary view. It has also been brought to my noti
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