Delhi High Court
Punjab National Bank vs Satinder Kumar Chopra & Anr. on 7 October, 2009
Author: Hima Kohli
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 249/1997
Date of decision : 07.10.2009
IN THE MATTER OF :
PUNJAB NATIONAL BANK ..... Appellant
Through: Mr. Pankul Nagpal, Advocate for
Mr. Y.P. Chandra, Advocate
versus
SATINDER KUMAR CHOPRA & ANR. ..... Respondents
Through: Nemo
CORAM
* HON'BLE MS.JUSTICE HIMA KOHLI
1. Whether Reporters of Local papers may
be allowed to see the Judgment? Yes.
2. To be referred to the Reporter or not? Yes.
3. Whether the judgment should be
reported in the Digest? Yes.
HIMA KOHLI, J. (ORAL)
1. The present appeal is preferred by the appellant Bank against
the judgment and decree dated 26.04.1997 passed by the learned ADJ in a
suit registered as Suit No. 697/93 instituted by the appellant against the
respondents.
2. Briefly stated, the facts of the case are that a suit for recovery of
Rs.2,48,825/- was filed by the appellant/Bank against the
respondents/defendants in the year 1990. The respondents filed a written
statement. After the pleadings were completed and the documents filed by
the parties were yet to be admitted or denied, efforts for arriving at a
negotiated settlement were initiated. In the course of the proceedings
itself, the respondents paid the amount of Rs.2,49,000/- to the appellant
thus, leaving only the question of payment of interest from the date of
institution of the suit till the date of realization of the suit amount. It is
pertinent to note that the entire amount of Rs.2,49,000/- was liquidated in
four installments between the period w.e.f. 29.03.1996 to 02.04.1997.
3. The learned Addl. District Judge relied upon a judgment passed
by the High Court of Delhi in the case of State Bank of India vs. P.K. Sethi &
Ors. reported as 54 (1994) DLT 659 and awarded interest in favour of the
appellant @ 6% per annum, apart from the costs of suit on the ground that
as per the law laid down in the aforesaid judgment, the suit amount had
been paid by the respondents to the appellant/Bank during the pendency of
the suit proceeding and hence, the respondents were entitled to reduction of
the rate of interest for the period from the date of institution of the suit, till
the date of realization thereof.
4. Counsel for the appellant states that the impugned judgment is
erroneous as the trial court failed to take into consideration the fact that in
terms of the loan documents, the agreed minimum rate of interest was
17.5% per annum and any reduction of interest contrary to the agreed rate
of interest was unjustified. In this regard, he relies upon the judgment
rendered in the case of Corporation Bank vs. M/s Rama Industries & Ors.
reported as 73 (1998) DLT 724.
5. Section 34 of the Code of Civil Procedure, 1908 (CPC) leaves the
discretion to the Court to order interest at such rate as the Court may
consider reasonable to be paid on the principal sum adjudged, from the date
of institution of the suit to the date of the decree, not exceeding 6% per
annum with the proviso that when the liability in relation to the sum so
adjudged had arisen out of a commercial transaction, the rate of such
further interest may exceed 6% per annum, but it shall not exceed the
contractual rate of interest and where there is no contractual rate, the rate
at which moneys are lent or advanced by nationalized banks in relation to
commercial transaction.
6. It is quite clear that the award of interest under Section 34 CPC
after the date of the institution of the suit is in the discretion of the Court.
Unlike the facts in the case of Corporation Bank (supra), where the
defaulting party had not paid any amount to the plaintiff Bank therein,
during the pendency of the suit except for expressing their readiness and
willingness to do so, the respondents in the present case had liquidated the
entire amount during the pendency of the suit itself, between the period,
March 1996 to April 1997. Thus, the facts and circumstances of the present
case justified a reduction of interest. Such facts did not exist in the case of
Corporation Bank (supra). "Exceptional circumstances" referred to by the
learned Single Judge in the above case is a variable factor and in each case,
depends on the facts and circumstances specific to that case. In the present
case, having regard to the exceptional circumstances mentioned above, the
court below exercised its discretion and awarded interest in favour of the
appellant Bank @ 6% per annum from the date of institution of the suit till
the realization of the amount.
7. This Court does not find any illegality in the rate of interest
awarded by the trial court in favour of the appellant Bank, which deserves
interference in the present appeal. The discretion exercised by the trial
court in awarding the interest is tempered by reason and based on the
peculiar facts and circumstance of the case and cannot be termed as
arbitrary.
8. For the aforesaid reasons, the prayer made in the appeal is
rejected and the same is dismissed with no orders as to costs.
The trial court record be released.
(HIMA KOHLI)
OCTOBER 07, 2009 JUDGE
rkb
