1. The appeal by the Bank arises out of judgments and orders passed by the D.R.T., Guwahati, Assam, on 24th October, 2002 and 19th December, 2002. For the purpose of this appeal, however, the grievance of the appellant-Bank primarily stems from the judgment and order of the Tribunal dated 24th October, 2002. By that order though the counter-claim of the defendant-respondents was dismissed by the Tribunal for lack of evidence, the appellant was also deprived of the realization of its full claim with interest since the application by the Bank was only partly allowed. The learned Tribunal below held that the appellant-Bank was only entitled to a certificate for a sum of Rs. 8,76,328.58 only with interest pre-suit at the rate of 16.5% per annum with quarterly rest and pendente lite as well as post-suit @ 12.5% per annum till realization. The reasons for the decision made by the learned Tribunal are analytical and compact and demonstrates proper application of mind in the matter of reduction of the interest and its adjustment on the basis of the evidence on record as exhibited. The relevant portion of the judgment and order runs thus: 10. Exhibit A-17 is the statement of account, which reflects that the rate of interest charged @ 16.5% per annum till 30th June. 1990, but interest at the enhanced rate of 19% per annum charged from 1st July, 1990 till August, 1990 and from September, 1990 interest charged at the very higher rate of 21.5% till the filing of the suit. From the sanctioning letter as referred to earlier, it is found that the rate of interest to be charged at 16.5% per annum with quarterly rests but the applicant has charged higher rate of interest 19% from 1st July, 1990 and 21.5% from September, 1990 without any supporting document. It i s pleaded for the applicant that the defendants in their fresh D.P. Note dated 27th February, 1991 agreed to pay 19% interest with monthly rests but I am not convinced to accept this proposition, as because it is very well stated in the plaint as well as affidavit that Exhibit A-12 was executed by the defendants as a token of acknowledgement and their debt to the extent mentioned therein. It wages not a fresh covenant as because Exhibits A-2 and A-7 (earlier D.P. Notes) reflect the rate of interest to be paid at 16.5% per annum with quarterly rests.
Thus, it is clear that the statement of account on which the applicant relies, is tainted with higher rate of interest than the agreed rate. Another aspect is that it is found in the plaint itself that erstwhile Purbanchal Bank was put under moratorium oft three different occasions from 1989 to 1990 and during that period, all accounts were frozen and quite obviously defendants were deprived from day-to-day transaction with the Bank in respect of their working capital. The Bank was put under moratorium not for the fault of the defendants but because of inherent defect in the Bank itself and thus the defendants cannot be made to suffer by asking them to pay interest at a higher rate even for the period of moratorium of Bank. It is found in the statement of account that the interest calculated for the period of moratorium and reflected in the sheet (bearing N. 070820) as Rs. 42,895.32, Rs. 37,855.30, Rs. 38,572.50 and Rs. 40,587.85 and the total thereof comes to Rs. 1,59,910.97. As a natural justice, the applicant Bank ought to have deducted this amount from the outstanding balance. The applicant Bank stepped into the shoes of erstwhile Purbanchal Bank w.e.f. 28th August, 1990 and from the materials on record, it is found that the moratorium was withdrawn on 28th August, 1990. Thus, the applicant Bank is entitled to charge interest at the agreed rate only from 28th August, 1990.
Apart from the above, in the absence of any averment in the plaint or statement in the affidavit as to the ground for charging higher rate of interest from 1st July, 1990 @ 19% and from September, 1990 @ 21.5 %, the Tribunal cannot accept such change in the rate of interest. The applicant is entitled to charge interest @ 16.5% as per agreement till filling of the suit.
11. In view of the above, the application is partly allowed on contest with proportionate cost and the counter-claim of the defendants dismissed for want of evidence. The applicant is entitled to recover an amount of Rs. 8,67,328.58 that stood on 29th August, 1990 after deduction of the amount of interest charged during the moratorium and pointed out in the foregoing para and thereafter interest on the said amount of Rs. 8,67,328.58 w.e.f. 29th August, 1990 @ 16.5% per annum with quarterly rests till filing of suit before the Civil Court. The interest during the pendency of the suit right from the date of filling of the suit before Civil Court and till actual payment shall be @ 12.5% per annum. The amount shall be recovered from defendant Nos. 1, 2, 3, and 5 who are jointly and severally liable to repay the amount. Defendant Nos. 4(a) and 4(b) are exonerated from the purview of liability because of the claim against defendant No. 4 awaited prior to filing of the prayer for impleading the heirs and the heirs being implead improperly.
12. Issue certificate in favour of the applicant Bank for realization of Rs. 8,67,328.58 that stood on 28th August, 1990 (after deduction done in respect of interest for the moratorium period) and interest thereon @ 16% per annum from 29th August, 1990 till filing of the suit before the Civil Court. The applicant is also entitled to get interest on the amount so calculated on the date of filling of the suit @ 12.5% per annum from the date of filing of the suit before the Civil Court and till actual payment.
Applicant is also entitled to proportionate cost of the suit.
2. Now, the main submission of the learned Advocate for the appellant-Bank is this: 1. The learned D.R.T. could not interfere in respect of the rate of charging interest by the appellant ignoring the provisions of Section 21A of the Banking Regulation Act, 1949 and the Apex Court's judgment in State Bank of India v. Tasangi Venkateswara Rao .
2. The Tribunal could not ignore the agreed contractual rate of interest between the parties, charged on the loan account as per terms of sanction and the duly executed document of loan.
3. The Tribunal could not direct the appellant-Bank to charge another rate of interest in a whimsical and arbitrary manner.
4. The Tribunal ignored the provisions of Sections 45 and 50 of the Banking Regulation Act, 1949 and decided arbitrarily that during the period of moratorium interest could not be charged.
5. The impugned judgment and order passed by the Tribunal are unreasonable and arbitrary and thereby the appellant-Bank is deprived of realizing the full amount of its dues which the Bank was legally entitled to.
3. In my view, the grievance of the appellant-Bank is neither legitimate, nor is based on sound legal principles. The facts of the Apex Court judgment in AIR 1999 SC 896, that pertain primarily to agricultural indebtedness and the provision of Section 21A of the Banking Regulation Act (10 of 1949) are not applicable here. There can be no doubt that an excessive rate of interest was slapped on the respondents. From the statement of account, Exhibit A-17 it is made clear that rate of interest was charged @ 16.5% per annum till 30th June, 1990 but interest at an enhanced rate of 19% per annum was charged from 1st July, 1990 till August, 1990. From September, 1990 there was a hefty hike in the interest rate @ 21.5% till filing of the suit. The sanctioning letter clearly spelt out an agreed rate of interest @ 16.5% per annum but the higher rate of interest clamped at the rate of 19% and at the rate of 21.5% had no legal basis, nor supported by any document worth considering. The fresh D.P. Note dated 27th February, 1991 relied upon by the Bank to justify the enhanced rate was not a fresh covenant to turn around from the earlier. Earlier D.P. Notes in Exhibits A-2 and A-7 which speak of an interest 16.5%, as agreed upon by and between both the parties. Also, the learned Tribunal below rightly found on sound reasoning and based on equitable consideration that during the period of moratorium, all accounts of the defendants were frozen and they were obviously deprived from day-to-day transaction with the Bank in respect of their working capital. How could the Bank make the respondents doubly suffer by imposing the enhanced rate of interest? No specific reasons were shown by the Bank at all justifying the enhanced rate of interest. I find no reason at all to interfere with the findings of the learned Tribunal below.
I find no merits in this appeal and accordingly the appeal is dismissed ex parte without cost. The impugned judgment and orders passed by the Tribunal below is hereby affirmed.