Delhi High Court
Smt. Gun Malla Devi Rajgarhia vs Canara Bank And Anr. on 11 August, 1999
Equivalent citations: 81 (1999) DLT 545
Bench: S Variava, S Mahajan
ORDER
1. This appeal is against an order dated 23rd October, 1998. By this order the plaintiff's/appellant's suit has been dismissed.
2. Briefly stated the facts are as follows:
The appellant/plaintiff had mortgaged her property bearing No. B-42, Maharani Bagh, New Delhi with the 1st respondent Bank as and by way of guarantee for the dues of one M/s. Venus Paper Mills Limited (respondent No. 2 herein). The said mortgage was for dues under a Term Loan Facility which had been granted to respondent No. 2. The appellant/plaintiff filed this suit for redemption of mortgage. However, in the suit it was claimed that the appellant was not liable for more than Rs. 24 lacs. In the suit it was claimed that on payment of a sum of Rs. 24 lacs the 1st respondent Bank should be directed to return all the documents of title to the appellant/plaintiff. The learned Single Judge did not accept the case that the liability was restricted to Rs. 24 lacs and dismissed the suit.
3. We were also not inclined to accept the case that the liability was restricted to Rs. 24 lacs. Therefore before us Mr. Chandhiok has, on instructions, made a statement that the appellant/plaintiff is willing to redeem the mortgage by paying up the entire amount due under the Term Loan Facility.
4. Between the parties there was a dispute in respect of a sum of Rs. 4,70,000/-. According to the appellant the same had been paid to the 1st respondent Bank on 17th June, 1987. The 1st respondent Bank admitted receipt of this amount. The 1st respondent Bank however claimed that this amount had been received towards another liability of respondent No. 2 and had thus been created into some other account. Credit, for his amount, had been given to respondent No. 2 in Bill of Exchange facility. We had called for the pay-in-slip and the cheque. Both the pay-in-slip and the cheque disclose that this sum of Rs. 4,70,000/- was specifically directed to be deposited into account No. ML-5/82 i.e. the Term Loan Account. In view of this specific direction the 1st respondent Bank could not have credited this amount into any other account. The 1st respondent Bank was bound to credit this amount into this account. The 1st respondent Bank was therefore directed to credit this amount into this account with effect from 17th June, 1987.
5. The question then arose about the rate of interest. Parties were informed that till date of filing of suit the 1st respondent Bank would be entitled to charge contractual rate. This included compound interest. Parties were told that after the date of the suit interest should be @ 15% p.a. The parties were then directed to recalculate the amount due.
6. On this basis the total amount comes to a sum of Rs. 76,14,563.38p. Appellant has brought into Court a pay order bearing No. 872773 dated 10th August, 1999 in favour of the 1st respondent Bank in a sum of Rs. 75,92,069.77p. Mr. Chandhiok stated that the balance amount of Rs. 22,493.51 would be paid to the 1st respondent Bank or deposited in Court latest by tomorrow i.e. 12th August, 1999.
7. The 1st respondent Bank is not willing to accept the pay order or the balance amount. We are told that the 1st respondent Bank is opposed to allowing redemption unless they receive the entire amount with interest, including compound interest, at the contractual rate even after the date of filing of the suit and till today.
8. Reliance is placed upon the case of Delhi Financial Corporation v. B.B. Behel, reported in I (1999) BC 574 (SC) and the case of State Bank of India v. Yasangi Venkateswara Rao, reported in I (1999) SLT 284 (SC). In our view, neither of these authorities support the proposition sought to be made. In both cases the principles set out by the Supreme Court are in respect of interest prior to the date of the filing of the suit. As already stated above, prior to the date of the filing of the suit, contractual rate of interest, including compound interest, is being given. In our view it is settled law that, after the date of the filing of the suit, what rate of interest should be granted, is in the discretion of the Court. Of course the discretion has to be judicially exercised.
9. In this case we are exercising our own discretion and fixing interest @ 15% per annum because we find that as far back as 14th April, 1988 the appellant herein had written to the 1st respondent Bank calling upon them to let the appellant know what was the amounts due under the Term Loan Facility. The appellant clarified that she was interested in paying the amount due and redeeming the mortgage. No reply was sent to this letter. No details or particulars are furnished to the appellants. Thus the 1st respondent Bank prevented the appellant from redeeming the mortgage in 1988. As a result of this the appellant has to now pay interest till today. Taking this factor into consideration, in our view, simple interest @ 15% p.a. is sufficient.
10. We accordingly pass a decree for redemption, on payment to the 1st respondent Bank, of a sum of Rs. 76,14,563.38p.
11. As the 1st respondent Bank is not willing to accept the pay order and the balance amount of Rs. 22,493.51p. we direct the appellant to bring a fresh pay order in the name of the Registrar of the High Court. We realise that the appellant will have to spend for getting another pay order. However appellant agrees to do so. The fresh pay order to be in the sum of Rs. 76,14,563.38p. The same to be deposited in the office of this Court by 12th August, 1999. 1st respondent Bank is at liberty to withdraw the amount. In case 1st respondent Bank does not withdraw the amount, within four weeks from today the same to be kept invested in a fixed deposit with a Nationalised Bank.
12. The 1st respondent Bank has to be directed to deposit in Court the title deeds in respect of the suit property. We are told that the title deeds are lying with the Debt Recovery Tribunal. The Debt Recovery Tribunal to forthwith send the title deeds to this Court. The Registrar to send a copy of this order to the Debt Recovery Tribunal directly to the appellants. Liberty to the appellant to apply for permission to take away the title deeds after four weeks from today.
13. This disposes of this appeal. However, there are certain clarifications which are required to be given. As we have directed the 1st respondent Bank to credit the sum of Rs. 4,70,000/- to Account No. ML-5/82 with effect from 17th June, 1987 it necessarily follows that the credit which had been given into Bill of Exchange Account stands cancelled. To that extent the claim of the 1st respondent Bank against respondent No. 2 in the Bill of Exchange Account will go up. As the directions were given now it follows that the claim of 1st respondent Bank to Rs. 4,70,000/- would not be time barred as it arises only on these directions. We also clarify that the 1st respondent Bank would also be entitled to interest on the sum of Rs. 4,70,000/- from 17th June, 1987.
14. Interim order dated 2nd February, 1999 will now stand vacated.
15. we also clarify that the Debt Recovery Tribunal is at liberty to fix such rate of interest, in the proceedings before it, as it considers just and equitable. We are sure that the Debt Recovery Tribunal would not be guided by the rate of interest fixed in this order. It is, however, clear that in the proceedings before the Debt Recovery Tribunal the claim against the appellant/plaintiff will no longer survive.
16. The appellant is directed to pay Court Fees on the basis that the suit for redemption was for a sum of Rs. 76,14,563.38p. Such Court Fees is to be paid within one week from today.
