1. The appellant-applicant Bank filed the Suit for Recovery of Rs. 15,71,519/-. The respondent-defendants sought relief before the DRT, Chennai, only with regard to the rate of interest i.e. at simple interest. The appellant-applicant Bank did not agree for that and insisted on contractual rate of interest. The defendants paid a sum of Rs. 15,42,945/- and they agreed to pay the entire balance amount with 6% simple interest from the date of plaint till 29.11.1999 and also the Court fee and Advocate fee. The total interest amount, adding the Court fee and Advocate fee comes to Rs. 5,23,488/- and the balance amount of the suit claim was Rs. 28,574/-. The learned Presiding Officer found that the balance payable comes to Rs. 5,52,062/- after giving credit to the amount already paid by the defendants. The defendants paid the entire balance amount of Rs. 5,52,0627- by way of Cheque. Since the entire amount was paid, the learned Presiding Officer ordered on 30.11.1999 to pay 6% simple interest from the date of plaint till 29.11.1999 in view of the judgment of the Apex Court reported in N.M.Veerappa v. Canara Bank, II (1998) SLT 361=I (1998) CLT 88 (SC)=AIR 1998 SC 1101. The learned Presiding Officer thus passed the order stating that subject to realisation of the Cheque issued by the defendants for an amount of Rs. 5,52,062/-, the TA is closed and the defendants are liable to be discharged from their liability and are discharged and the learned Presiding Officer has also ordered for return of title.
2. Unsatisfied with the award of interest at 6% simple interest from the date of entry till 29.11.1999, the appellant has come forward with this appeal. Counsel appearing for the appellant submitted that the Bank is entitled to the rate of interest as per the contract and the future interest from the date of plaint till realisation ought to have been awarded at the contractual rate. He relies upon the decision of the Apex Court reported in State Bank of India v. Yasangi Venkateswara Rao, I (1999) SLT 284=I (1999) CLT 105 (SC)=( 1999) 2 SC Cases 375, wherein the apex Court has held that rate of interest is a matter of contract between parties and thus an agreement that compound interest is to be charged in respect of the amount advanced against a mortgage cannot be interfered with by a Court. The Apex Court in this decision has observed that Section 21-A of the Banking Regulation Act had been validly enacted and if the parties agreed that in respect of the amount advanced against the mortgage, compound interest will be paid and the Court cannot possibly interfere and reduce the amount of interest agreed to be paid on the loan so taken.
3. Section 21-A of the Banking Regulation Act states that "Notwithstanding anything contained in the Usurious Loans Act, 1918 or any other law relating to indebtedness in force in any State, a transaction between a Banking company and its debtor shall not be reopened by any Court on the ground that the rate of interest charged by the Banking company in respect of such transaction is excessive." 4. Relying upon this section the learned Counsel appearing for the appellant Bank argued that the Court cannot reduce the rate of interest and there is a contract between the Bank and the debtor with regard to the payment of interest at 22.75% per annum with compounded quarterly rests. The DRT has awarded 6% simple interest only from the date of plaint till the date of realisation.
5. Counsel for the respondents relying upon the decision of the Supreme Court in Central Bank of India v. Ravindra and Ors., VII (2001) SLT 400=IV (2001) CLT 127 (SC)=AIR 2001 SC 3095, submitted that the Tribunal has got discretionary power under Section 34, CPC to award future interest and the Presiding Officer, DRT, has rightly exercised his discretionary power in awarding future interest and the order passed by the learned Presiding Officer does not warrant any interference.Central Bank of India v. Ravindra and Ors. (supra), that "While decreeing a suit if the decree be for payment of money, the Court would adjudge the principal sum on the date of the suit. The Court may also be called upon to adjudge interest due and payable by the defendant to the plaintiff for the pre-suit period which interest would obviously be other than such interest as has already stood capitalised and having shed its character as interest, has acquired the colour of the principal and having stood amalgamated in the principal sum would be adjudged so. The principal sum adjudged would be the sum actually loaned plus the amount of interest on periodical rests which according to the contract between the parties or the established Banking practice has stood capitalised. Interest pendente lite and future interest (i.e. interest post-decree not exceeding 6 per cent per annum) shall be awarded on such principal sum i.e. the principal sum adjudged on the date of the suit. It is well settled that the use of the word "may" in Section 34 confers a discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit. Such interest, so far as future interest is concerned may commence from the date of the decree and may be made to stop running either with payment or with such earlier date as the Court thinks fit." 7. In AIR 2001 SC Page 3119 Para 55(8), the Apex Court has observed that "A ward of interest pendente lite and post-decree is discretionary with the Court as if is essentially governed by Section 34 of the CPC de hors the contract between the parties. In a given case if the Court finds that in the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post-decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner." 8. The learned Counsel appearing for the appellant Bank submitted that even the discretion shall be exercised fairly and judiciously and it should not be arbitrary and in the case on hand the Presiding Officer, DRT has awarded 6% simple interest from the date of plaint till the date of realisation. The defendants have paid the entire suit claim and they also agreed to pay the entire balance amount with 6% simple interest from the date of plaint till the date of realisation and since they have paid the entire suit claim the Presiding Officer, DRT has awarded 6% simple interest from the date of plaint till the date of realisation. The Presiding Officer, DRT has exercised his discretion fairly and judiciously and for reasons recorded in his order. He has not exercised his discretion in an arbitrary or fanciful manner.N.M. Veerappa v. Canara Bank (supra), that the simple interest from the date of plaint till the date of realisation is proper. Even though SBI v. Yasangi Venkateswara Rao (supra), supports the case of the appellant Bank, applying the principles laid down by the Apex Court in the decisions of AIR 1998 I SC 1101 and AIR 2001 SC 3095 which are the direct decisions on this point, I am of the view that the learned Presiding Officer, DRT has exercised his discretionary power under Section 34, CPC and has passed the order awarding simple interest from the date of plaint till the date of realisation. The order passed by the DRT does not suffer from any infirmity.