A mortgagee is not entitled to charge higher interest rates than those stipulated in the mortgage deed unless it provides evidence of a formal board resolution authorizing the increase, and appellate courts cannot arbitrarily calculate outstanding loan amounts without evidentiary support.

JUDGMENT

1.This appeal has been preferred again the judgment and decree dated 15.12.2014 passed by the fir Appellate Court in A.S.No.161 of 2013 on the file of XV Additional Judge, City Civil Court, Chennai, wherein, the fir respondent herein has preferred the fir appeal again the judgment and decree passed by the trial Court in O.S.No.3542 of 2007. The said suit in O.S.No.3542 of 2007 was filed by the plaintiffs and the same was decreed. Aggrieved by the said judgment, the fir defendant has preferred the fir appeal. The fir Appellate Court has set aside the judgment passed by the trial Court, by enhancing the decree amount. Aggrieved by the same, the plaintiffs have filed the present appeal.

2. The parties are referred to as per their own ranking before the trial Court for the sake of convenience:

3. The brief averments of the plaint are as follows:

The plaintiffs are the owners of the immovable property bearing Door No.24, Second Avenue, Thirumeni Amman Koil reet, Anna Nagar, Chennai. The plaintiffs had approached the fir defendant for a loan of Rs.5,00,000/- (Rupees Five Lakhs Only) on the security of the above property and the 1 defendant after satisfying about the title of the property as well as the solvency of the plaintiffs agreed to advance the required loan of Rs.5,00,000/-. For the said loan amount, the plaintiffs have deposited the original documents of title deeds relating to the said property with the fir defendant and a mortgage deed was executed on 13.11.1995 in respect of the aforesaid property. As per the said mortgage deed dated 13.11.1995, the fir defendant had sanctioned a loan of Rs.5,00,000/- payable with intere at the rate of 21% p.a. The principal loan amount and the intere is repayable on inalments to a sum of Rs.11,000/- per month for 92 months. The plaintiffs were prompt and regular in the payment of dues. The plaintiffs have till date paid a sum of Rs.13,50,000/- towards the repayment of the loan amount.

3.1. The fir defendant has also acknowledged the receipt of various payments made by the plaintiffs. When the plaintiffs expressed their willingness to repay the above said amount and redeem the mortgage, the fir defendant refused to accept the same. As per the terms of mortgage deed, if any default in repayment, the fir defendant is entitled to penal intere at 24% per annum. However, the fir defendant has threatened the plaintiffs that they would bring the aforesaid property for sale by claiming exorbitant intere. The plaintiffs are ready to pay a balance sum of Rs.1,25,000/- due to the fir defendant to redeem the mortgage but the defendants refused to receive the same. Therefore, the plaintiffs have filed the suit.

4. The brief averments of the written atement filed by the 1 defendant are as follows:

The plaintiffs have availed a loan of Rs.5,00,000/- from the 1 defendant by executing a mortgage deed, dated 13.11.1995 in favour of the fir defendant, wherein the intere was fixed at 21% per annum. The plaintiffs have to a pay a sum of Rs.11,000/- per month for a period of 92 months without committing default. If any default, the said intere on unpaid inalment was increased to 24% per annum as fixed by the Board from November 2000 . The plaintiffs have paid the 1 inalment in June 1995 and have arted committing default nd from 2 month of December 1995 to May 1996 for a period of six months. The plaintiffs have paid a sum of Rs.81,999.75 on 25.06.1996 and on that date seven months inalments we