Punjab-Haryana High Court
Pritam Singh vs Punjab And Sind Bank on 7 November, 2025
RSA-3139-1996 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RSA-3139-1996 (O&M)
RESERVED ON: 04.11.2025
PRONOUNCED ON:07.11.2025
PRITAM SINGH
.....APPELLANT
VERSUS
PUNJAB AND SIND BANK AND ANR.
.....RESPONDENTS
CORAM: HON'BLE MS. JUSTICE MANDEEP PANNU
Present: Mr. S.K. Arora, Advocate
for the appellant.
Mr. H.K. Talwar, Advocate
for respondent No.1.
Respondent No.2 proceeded against ex parte
vide order dated 12.08.2025.
*****
MANDEEP PANNU, J
1. The present Regular Second Appeal has been preferred by
Pritam Singh (defendant No.1) assailing the judgment and decree dated
28.10.1992 passed by the learned Sub Judge Ist Class, Faridkot, whereby the
suit of the plaintiff-bank for recovery of ₹95,787/- along with future interest
at the rate of 12.5% per annum with half-yearly rests was decreed, and the
judgment and decree dated 24.08.1996 passed by the learned Additional
District Judge, Faridkot, dismissing the appeal and affirming the findings of
the trial Court.
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BRIEF FACTS
2. The brief facts of the case are that the plaintiff-Punjab and Sind
Bank, a body corporate constituted under the Banking Companies
(Acquisition and Transfer of Undertakings) Act, filed a suit for recovery of
₹95,787/- against defendants Pritam Singh and Sardool Singh. Defendant
No. 1 approached the plaintiff-bank for a loan of ₹60,000/- for the purchase
of an International Tractor. The plaintiff-bank sanctioned and disbursed the
said amount by cheque to M/s Punjab Agro Industries Corporation Ltd.,
Ferozepur.
3. Defendant No. 1 executed the usual set of loan documents
including a demand promissory note, letter of waiver, letter of request, letter
authorising the bank to charge penal interest, and a hypothecation deed. The
tractor so purchased was hypothecated in favour of the bank. As a further
security, defendant No. 1 mortgaged land measuring 72 kanals in favour of
the bank.
4. Defendant No. 2 stood as guarantor for repayment of the loan.
The defendants failed to repay the dues despite repeated demands. At the
time of filing of the suit, an amount of ₹95,787/- was outstanding.
5. The defendants, in their written statement, admitted most of the
averments but disputed the execution of certain documents and contended
that some payments made by them were not accounted for. It was also
pleaded that the suit was barred by limitation.
FINDINGS OF THE COURTS BELOW
6. The learned trial court, on the basis of the pleadings, framed
appropriate issues. On appreciation of the oral and documentary evidence
led by the plaintiff-bank, particularly the testimony of Gurmail Singh (PW-
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1), Narinder Singh (PW-2), Ranjit Singh, Manager (PW-3), and Jagdev
Singh Sandhu, Senior Manager (PW-4), as well as the loan documents (Ex.
P-1 to P-17), it was held that Pritam Singh had executed all relevant loan and
hypothecation documents and acknowledged his liability.
7. The court found no material on record to disbelieve the
documents, and the defendant failed to lead any expert evidence to challenge
the genuineness of his thumb impressions. The suit was accordingly decreed
for ₹95,787/- with future interest at 12.5% per annum with half-yearly rests,
and the defendants were held jointly and severally liable.
8. The First Appellate Court, while affirming the decree, rejected
the appellant's plea that interest should be confined only to the principal
amount of ₹60,000/- and not to the amount outstanding at the time of suit. It
held that once the amount of ₹95,787/- was due as on the date of suit, that
amount constituted the principal for purposes of calculating further interest.
The appeal was thus dismissed.
9. Feeling aggrieved by the above-said judgments, the appellant-
Pritam Singh preferred the present Regular Second Appeal.
10. Upon notice, respondent No.1 appeared and contested the
appeal and respondent No.2 proceeded against ex parte vide order dated
12.08.2025.
SUBMISSIONS ON BEHALF OF THE APPELLANT
11. Learned counsel for the appellant contends that both the courts
below have erred in decreeing the suit for the entire claimed amount without
properly accounting for certain payments made by the appellant. It is
submitted that the deposit voucher (Ex. D1) evidencing payment of ₹7,000/-
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was not considered, and that another amount of ₹6,000/- was struck off from
the ledger without justification.
12. It is further argued that the rate of future interest granted by the
courts below is excessive, particularly since the transaction pertains to an
agricultural loan for purchase of a tractor. It is submitted that as per the
settled principles under Section 34 of the Code of Civil Procedure, 1908, the
rate of pendente lite and future interest should not exceed 6% per annum in
case of agricultural advances. Reliance is placed upon the judgment of the
Madhya Pradesh High Court in 'Kok Singh v. Punjab & Sind Bank', First
Appeal No.27, 32 of 1987, where it was held that pendente lite and future
interest on an agricultural transaction should be restricted to 6% per annum.
SUBMISSIONS ON BEHALF OF RESPONDENT NO.1-BANK
13. Learned counsel for the respondent-bank has supported the
judgments of the courts below, submitting that the appellant has admitted the
sanction, disbursement, and hypothecation of the tractor, and has failed to
produce any credible evidence to show that the alleged payments were made
beyond the bank records. The ledger entries were duly proved by competent
witnesses and there was no manipulation or suppression.
14. It is further contended that the rate of interest was agreed to be
12.5% per annum with half-yearly rests, and the same has been applied as
per the contract between the parties. Therefore, there is no ground for
interference with the concurrent findings of fact.
FINDINGS OF THIS COURT
15. This Court has heard learned counsel for both sides and perused
the record carefully.
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16. The concurrent findings of fact recorded by both the courts
below are based on appreciation of evidence and are neither perverse nor
contrary to record. The appellant has not produced any cogent material to
disprove the loan documents or the acknowledgment of debt executed by
him. His own admission in cross-examination establishes the advancement
of the loan and execution of documents. The finding that the amount of
₹95,787/- was due on the date of the suit is fully justified.
17. The plea regarding non-accounting of certain deposits has
rightly been rejected. The alleged deposit voucher (Ex. D1) for ₹7,000/-
does not inspire confidence in absence of corroboration from the bank's
account records. Similarly, the alleged deletion of ₹6,000/- entry has not
been substantiated.
18. The only surviving question pertains to the rate of pendente lite
and future interest.
19. The loan was advanced for purchase of a tractor, which is an
agricultural implement, and thus the transaction partakes the nature of an
agricultural advance. While the contractual rate of 12.5% per annum with
half-yearly rests is binding up to the date of suit, the Court has discretion
under Section 34 CPC to determine reasonable interest pendente lite and
post-decree.
20. In Kok Singh's case (supra), it was held that:
"In case of agricultural loans, the pendente lite and future
interest should not exceed 6% per annum, as the transaction is agricultural in
nature."
21. This view finds support from the equitable principle underlying
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Section 34 CPC, which seeks to prevent undue enrichment through
compound interest beyond the period of adjudication.
22. Considering that the loan was agricultural in nature and keeping
in view the settled legal position, it would be just and proper to reduce the
rate of pendente lite and future interest to 6% per annum (simple interest)
from the date of filing of the suit till realization. The contractual rate shall,
however, apply only up to the date of filing of the suit.
CONCLUSION
23. In view of the above discussion, this Court finds no merit in the
appeal insofar as it challenges the concurrent findings of fact recorded by the
courts below. The decree for recovery of ₹95,787/- is upheld. However, the
decree is modified to the extent that the rate of pendente lite and future
interest shall stand reduced to 6% per annum (simple interest) from the date
of institution of the suit till realization.
24. Subject to the above modification, the appeal is dismissed.
25. All pending miscellaneous application(s), if any, stands
disposed of.
(MANDEEP PANNU)
07.11.2025 JUDGE
Poonam Negi
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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