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State Bank of Mysore Vs. G.P. Thulasi Bai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberRFA No. 333 of 1985
Judge
Reported inILR1985KAR2976
ActsCode of Civil Procedure (CPC) , 1908 - Sections 34 - Order 34, Rule 11
AppellantState Bank of Mysore
RespondentG.P. Thulasi Bai
Advocates:C.B. Srinivasan, Adv.
DispositionAppeal rejected
Excerpt:
..... has discretion to reduce the contractual rate of interest to 6 per cent from the date of suit till date of realisation, even in mortgage suit.;loan was secured by the respondents by mortgaging their immoveable property. the contractual rate of interest is 2.5% above the reserve bank rate of interest subject to a minimum of 14%, the trial judge awarded 6% interest from the date of the suit till realisation of the decretal dues. contended that contractual rate of interest from the date of the suit till realisation ought to have been awarded under order 34 rule 11 cpc without reduction to 6%.;it has been observed that the scope of the interaction of section 34 and order 34 rule ii is that after the period for redemption has expired the matter passes from the domain of contract to..........j.1. the dispute in this appeal relates only to the rate of interest charged from the date of suit till the date ofrealisation on a loan secured by mortgaging the immoveable property of the first respondent. the contractual rate of interest is 2.5% above the reserve bank rate of interest subject to a minimum of 14%. the trial judge has awarded 6% interest from the date of suit till realisation of the decretal dues.2. mr. c. b. srinivasan, counsel for the appellant, passionately pleaded that the court below ought to have granted the contractual rate of interest from the date of suit till realisation as required under order 34 rule 11 cpc and ought not to have reduced the rate to 6%.3. this contention would have been accepted if the trial court could not call into aid the provisions.....
Judgment:
ORDER

Jagannatha Shetty, J.

1. The dispute in this appeal relates only to the rate of interest charged from the date of suit till the date ofrealisation on a loan secured by mortgaging the immoveable property of the first Respondent. The contractual rate of interest is 2.5% above the Reserve Bank rate of interest subject to a minimum of 14%. The Trial Judge has awarded 6% interest from the date of suit till realisation of the decretal dues.

2. Mr. C. B. Srinivasan, Counsel for the appellant, passionately pleaded that the Court below ought to have granted the contractual rate of interest from the date of suit till realisation as required under Order 34 Rule 11 CPC and ought not to have reduced the rate to 6%.

3. This contention would have been accepted if the Trial Court could not call into aid the provisions of Section 34 in a case governed by Order 34 Rule 11. The scope of the interaction of Section 34 and Order 34 R.11wasconsidered by the Supreme Court in Soli Pestonji Majoo v.Gangadhar Khemka, : [1969]3SCR33 in which after approving the principles stated by the Privy Council in jagannatha Prasad Singh Chaudhury v. SurajmalJalal and the Federal Court in Jaigobind Singh v. Lachmi Narain Ram observed that after the period for redemption has expired the matter passes from the domain of contract to that of Judgment. The right of the mortgagee will henceforth depend not on the contents of his bond but on thedirections of the decree. Order 34, Rule 11 gives a certain amount of discretion to the Court so far as interest pendente lite and subsequent interest is concerned and it is no longer absolutelyobligatory on the Courts to decree interest at the contractual rates upto the date of redemption in all circumstances even if there is no question of the rate being penal, excessive or substantially unfair.

In view of these observations, we do not think that the Trial Court has committed an error in exercising thediscretion in reducing the contractual rate of interest to 6% from the date of suit till the date of realisation. The defendants have not even contested the suit, perhaps they were financially not in a position to do so. The interest awarded by the Court appears to be also in accordance with the terms of the order of the Supreme Court in S.P. Majoo'scase where the interest at 6% per annum on the principal amount adjudged from the date of suit till the date of preliminary decree and also at the same rate till the date of realisation was awarded.

5. We, therefore, see no reason to admit this appeal.

The appeal is accordingly rejected.


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