1. This regular appeal is directed as against the order dated 31.5.2006 in OA 35/2006 passed by DRT, Ernakulam.
2. The appellant Bank filed the suit in OS-29/1991 before the Sub-Court, Kottarakara, Kerala for recovery of a sum of Rs. 85,609.75p in respect of Working Capital Term Loan Account and for Rs. 78,034/- due under Cash Credit Account, for a total sum of Rs. 1,63,643.75 together with interest @ 14% p.a. with quarterly rests from the defendants jointly and severally and charge on the schedule of properties. The suit was decreed ex parte on 30.1.1996 and the same was challenged by the respondents in CRP-511/2001, and the High Court of Kerala set aside the ex-parte decree by Order dated 7.7.2004 and the suit was restored to file. That thereafter, the suit was decreed on 20.12.2004, and the judgment reads as under: (A) Allowing the plaintiff to recover Rs. 85,609. 75 as shown in the memo of account 'A' with future interest at the rate of 14% per annum with quarterly rests.
(B) Allowing the plaintiff to recover a sum of Rs. 78,034/- as shown in the memo of account 'B' along with future interest at the rate of 14% per annum with quarterly rests from the defendants and their assets and charged on the mortgaged properties along with costs.
As on 2006, the principal and interest found due more than Rs. 10 lakhs, and hence, the appellant Bank filed an application before the DRT, Ernakulam under Section 31(A) of the RDDB & FI Act, 1993 in OA-35/2006 for issuance of Recovery Certificate, in terms of the decree dated 20.12.2004 claiming a sum of Rs. 13,05,491/-. The respondents did not contest the OA. But, however, the Tribunal had considered the decree and judgment passed by the Civil Court and held that the decree does not provide for payment of interest from 23.1.1991 i.e. the date of filing of the suit to 20.12.2004 the date of decree and it only provides for future interest from the date of decree at 14% p.a. with quarterly rests, and disallowed interest for the pendente lite period.
On a calculation of the principal sum due on the date of suit, plus the interest from the date of decree, plus the costs awarded under the decree, works out to approximately Rs. 4 lakhs only and as it was less than Rs. 10 lakhs, the appellant cannot invoke the provisions of Section 1(4) read with Sections 17 and 18 of the RDDB & FI Act, 1993 and dismissed the OA. Aggrieved by the same, the Bank has preferred this appeal.
I have heard the Authorised Officer of the appellant Bank and the learned Advocate for the respondents.
3. The appellant filed the suit before the Civil Court in the year 1991 and it was decreed ex parte on 30.1.1996, which was challenged before the High Court in CRP-511/2001 and the High Court, by its Order dated 7.7.2004, allowed the CRP and the case was remanded and taken on file by the Sub-Court, Kottarakkara. Subsequently, the Civil Court decreed the suit by decree and judgment dated 20.12.2004, which runs as under: (A) Allowing the plaintiff to recover Rs. 85,609.75 as shown in the memo of account 'A' with future interest at the rate of 14% per annum with quarterly rests.
(B) Allowing the plaintiff to recover a sum of Rs. 78,034/- as shown in the memo of account 'B' along with future interest at the rate of 14% per annum with quarterly rests from the defendants and their assets and charged on the mortgaged properties along with costs.
4. The Authorised Officer of the appellant Bank has submitted that they are entitled, not only to future interest, but also interest for the pendente lite period. The Civil Court never denied the interest for the pendente lite period. The Civil Court did not specifically say in the judgment either allowing the interest or disallowing the interest for the pendente lite period, and therefore, the appellant is entitled to recover interest for the pendente lite period also (i.e. from the date of filing of the suit till the date of decree), which would come to more Rs. 10 lakhs, and therefore, the provisions of the RDDB & FI Act, 1993 get attracted, and the CA filed by the appellant for the issuance of Recovery Certificate, is sustainable.
5. On the contrary, it is the contention of the learned Advocate for the. respondent, that the Civil Court did not grant interest fox pendente lite period i.e. from the date of filing of the suit till the date of decree, and therefore, the amount claimed by the appellant to the extent of more than Rs. 11 lakhs as interest, to bring the proceedings under the canopy of RDDB & FI Act, 1993 is not sustainable.
It is further submitted that, as pendente lite interest was not granted, the amount due by the respondent to the appellant would be only about Rs. 4 lakh and odd, and therefore, the DRT has no jurisdiction to entertain the OA, and the DRT was well within its right in dismissing the OA, and thus, argued in support of the impugned order.
6. In the above said background, I have gone through the plaint in OS-29/1991 and also, the decree passed by the Civil Court. The fact that the suit was instituted in the year 1991 and it was decreed ex parte on 30.1.1996, and the same was set aside by the High Court of Keralain CRP-511/200 by order dated 7.7.2004 and thereafter, the suit was restored to file and decreed on 20.12.2004 are not in dispute. On going through the averments in the plaint, it is made out, that the appellants have prayed for decree by allowing the plaintiff to recover Rs. 85,609.75p with interest @ 14% p.a. with quarterly rests and likewise for Rs. 78,034/- from the defendants jointly and severally. It is the contention of the respondent that there is no specific prayer for the grant of interest for pendente lite period and it would amount to that the appellants have not claimed interest for the said period.
The decree is passed by Civil Court on 20.12.2004 i.e. after the passing of the RDDB&FI Act, 1993, and also after the passing of the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000. The appellants have not made any specific prayer, for the grant of interest from the date of filing of the suit, till the date of decree, but whereas they have claimed interest @ 14% p.a. with quarterly rests from the defendants and it would mean and include, that the interest was claimed for the pendente lite period also i.e. from the date of filing of the suit and till the date of passing of the decree.
7. In this connection, it would be useful to refer the three stages at which the rate of interest could be claimed.
(i) Interest would be claimed from the date of borrowing till the date of institution of suit before Civil Court or in Original Application before the DRT (ii) Interest from the date of institution of the suit/OA to the date of decree (iii) Interest from the date of decree to the date of payment/realisation.
The above said principles find a place in Section 34 of Civil Procedure Code also. As far as the interest for the period from the date of borrowing till the date of filing of the OA, it would be added along with the principal amount, and would be claimed on the date of filing of the suit itself. In respect of interest from the date of filing of the suit till the date of decree, it would also be claimed. The plaint, in the instant case reads, "Allowing the plaintiff to recover Rs. 85,609.75 as shown in the memo of account 'A' hereunder with 14% interest per annum with quarterly rests from the defendants...." If interest for the period from the date of filing of the suit and till the date of decree is not intended for, there is no necessity to claim interest with quarterly rests. The very claim of "quarterly rests" would mean and include that the plaintiff claimed interest for the pendente lite period also, and therefore, the denial of interest for the said period, is not justified.
8. One more aspect also has got to be seen in this case. Original Suit was filed before Sub-Court, Kottarakara and it was decreed ex parte on 30.1.1996. Only at the instance of the defendants, the High Court by Order dated 7.7.2004, set aside the decree and the suit was restored to file, and ultimately decreed on 20.12.2004. The defendants alone are responsible for the delay in granting the decree. If the defendants had not filed the CRP, the plaintiff would have executed the decree soon after the decree was passed by the Civil Court on 30.1.1996 itself and then, the amount recoverable would not have swelled into more than Rs. 10 lakh, attracting the jurisdiction of the DRT. As such, the claim of the appellants that they are entitled to interest for the pendente lite period, cannot be denied. But, on the other hand, the defendants' contention cannot be accepted.
9. In support of their submission, the appellant Bank relied upon the case of State Bank of Punjab v. Ajit Singh and Ors. .
That case arose in arbitration proceedings and that too, in respect of grant of future interest on the amount awarded after the date of realisation. As far as the awarding of future interest, there is no quarrel in this case, and in fact, it was allowed also. Hence, this decision is not relevant.
10. In Himachal Pradesh Financial Corporation, Shimla & etc. v. Tourist Hotel and Restaurant, Dharamsala and Ors. AIR 1990 HP (Full Bench), the High Court had an occasion to consider about the grant of future interest from the date of filing of petition till realisation in respect of State Financial Corporation Act (1951) and it was held that, under Section 32 of the said Act, future interest from the date of filing of the petition till the entire amount paid to be allowed, and this is also not relevant for our case.
11. In the case of Bank of India v. Dr. (Mrs.) Mary George abd Ors.
, the High Court considered about the rate of interest payable for future interest and held that the grant of 12% p.a. as future interest was reasonable. This has no application to our case.
12. The learned Advocate for the respondents has submitted that the appellant is entitled to only future interest and not for pendente lite period, as decree was also not granted to that effect. In respect of his submission, the respondents relied upon the case of Dwarka Das v.State of M.P. and Anr. . That case arose out of the tenders invited by the Government. The work was obstructed by the Superintending Engineer of the Government and ultimately, the contract between the parties was terminated. The appellant claimed damages together with future interest @ 6% p.a. After the decree of the Trial Court, the appellant filed an application under Section 152 of the CPC praying for awarding of interest from the date of the suit till the date of the decree by correcting the decree and the judgment on the ground that non-awarding of interest pendente lite was an accidental omission. In the said (sic), it was held that the appellant is not entitled to correct the decree under Section 152 of CPC, as it is intended only for correction of clerical or arithmetical mistakes in judgments, decrees or orders or errors arising therein from any accidental slip or omission. But, non-granting of interest would not fall within the scope of Section 152, CPC. This judgment has no relevance to the case on hand.
13. In Thirugnanavalli Animal v. P. Venugopala Pillai and Ors. AIR 1940 Madras 29, it was held that, "Where a decree is silent with respect of the payment of further interest from the date of the decree to the date of payment and the decree follows the judgment, the Court must be deemed to have refused it. Hence, even if the decree-holder ought to have had further interest granted to him and this was accidentally overlooked, the Court cannot in face of the provisions of Section 34(2) rectify the omission". This is also not relevant for our case.K. Rajamouli v. A.V.K.N. Swamy , there was also an omission in not granting pendente lite interest to the decree-holder by the Arbitrators and the Trial Court. An application under Section 152 of the Code of Civil Procedure was filed.
In the said connection, the Court had followed the earlier judgment of the Supreme Court in the case of Dwarka Das v. State of M.P. and Anr., referred supra and held that the decision in the said case is squarely applicable to the present case and refused to allow the application filed under Section 152 of CPC. This case is also of no relevance to the case on hand.
15. I have carefully considered the rival submissions and also the rulings relied upon by both the parties and also the averments in the plaint. The rulings relied upon by both the parties are of no help to arrive at a conclusion, as they speak only about the powers of the Court in allowing the application to amend the decree under Section 152 of CPC and also grant of future interest i.e. from the date of filing of the suit/OA till the date of realisation. But, whereas, the question involved in our case is the grant of interest for the pendente lite period. We have already seen that the appellant filed the suit for the recovery of the amount together with interest with quarterly rests. On the date of filing of the suit itself, the appellant had claimed interest with quarterly rests. That indicates that the appellant had claimed interest with quarterly rests from the date of filling of the suit also. Though it was not stated in so many words, it could easily be perceived and inferred that the appellant made a claim for interest for the pendente lite period also. Secondly, it is not the case of the respondents that the interest claimed by the appellant for pendente lite period was specifically refused or disallowed by the Civil Court at the time of passing of the judgment. As such, it cannot be said that the interest claimed by the appellant for the pendente lite period was refused or disallowed by the Civil Court. On that account also, I am inclined to accept the case of the appellant, that they are entitled to claim interest for the pendente lite period also, and the finding of the DRT, is not proper.
16. For the reasons stated above, I come to the conclusion that the Orders passed by the DRT disallowing the interest for the pendente lite period, is not proper and correct, and the same is liable to be set aside, and accordingly, it is set aside. The appellants have already claimed interest @ 14% p.a. with quarterly rests. The Tribunal has got the discretionary power to grant interest as provided under Sub-section (20) to Section 19 of the RDDB & FI Act, 1993. As the appellants have claimed interest @ 14% p.a. with quarterly rests, the same is awarded for the pendente lite period also. But, however, future interest i.e.
interest from the date of decree till the rate of realisation, the interest is being awarded @ 14% simple.