AI Structured Summary
Not yet generated for this judgment
Judgment
K.A. Swami, J.—This appeal is preferred against the judgment and decree dated October 18, 1983, passed by the learned Principal Civil Judge, Belgaum, in O.S. No. 24 of 1979.
The respondent/plaintiff filed the aforesaid suit for recovery of a sum of Rs. 2,33,752.10 with future interest at 15 per cent. per annum on the aforesaid sum.
The trial court has decreed the suit of the plaintiff for a sum of Rs. 1,26,560.93 with future interest at 15 per cent. per annum from October 22, 1981, the date on which the plaintiff-bank received the compensation amount under the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as "the Act").
It is contended on behalf of the appellants by learned counsel, Sri A. V. Albal, that the very basis of the amount arrived at by the trial court is not correct; that at any rate, in the light of the Karnataka Act, 17 of 1990, the decree is required to be modified. The correctness of these contentions is disputes by Sri Kamath, learned counsel for the plaintiff-bank. It is contended by Sri Kamath that the suit as decreed by the trial court is in accordance with law.
In the light of the aforesaid contentions, the following points arise for consideration :
(1) What is the effect of sub-section (4) of section 11 of the Act which has been inserted by the Karnataka Act 17 of 1990 with retrospective effect from the date the Act came into force ?
(2) What was the amount due by the defendants to the plaintiff on the date when the Act came into force ?
(3) Whether the decree passed by the trial court for a sum of Rs. 1,26,560.93 with costs and interest at 15 per cent. from October 22, 1981, is justified in law ?
Point No. 1. - The Act came into force on January 30, 1976. The contract carriage vehicle bearing registration No. MYA 8784 hypothecated to the plaintiff-bank for the suit loan advanced to the defendants was acquired by the State Government under the Act on January 30, 1976, itself, and, from that date, it came to be vested in the State Government. The Act provides for determination of the amount for the acquired vehicle and manner of payment of such amount. Sub-section (4) of section 11 came to be inserted by the Karnataka Act 17 of 1990, with retrospective effect from January 30, 1976. The said sub-section reads thus :
"11. (4) The amount deducted under clause (iii) of sub-section (3) of section 10 shall be paid in cash in one lump sum to the secured creditors with interest at the rate of six per cent. per annum from the date of vesting of the acquired property in the Government to the date of payment and on such payment, the secured creditor shall have no right to claim from the contract carriage operator any more amount by way of interest on such amount."
Interest at the rate of 6 per cent. annum came to be enhanced to 12 per cent. with retrospective effect from January 30, 1976, by the Karnataka Act No. 25 of 1991.
A close reading of the aforesaid sub-section (4) of section 11 of the Act makes it clear that the secured creditor - the plaintiff is not entitled to claim interest on the amount payable towards the acquired property vesting in the State Government, i.e., the contract carriage, at the contractual rate from the date vesting till the date of payment of the amount but would be entitled to interest only at 12 per cent. per annum from the date of vesting till the date of payment of the amount. The amount referred to in the aforesaid sub-section (4) of section 11 of the Act is the amount that is payable to the secured creditor towards the contract carriage acquired under the Act and vesting in the State Government. The words "interest at the rate of 12 per cent. per annum from the date of vesting of the acquired property in the Government to the date of payment". read with the words "and, on such payment, the secured creditor shall have no right to claim from the contract carriage operator any more amount by way of interest on such amount" make it clear that the secured creditor would be entitled to claim interest at the rate of 12 per cent. per annum on the amount determined as payable to the secured creditor for the acquired vehicle vesting in the State Government at 12 per cent. from the date of vesting till the date of payment of the amount and he would not be entitled to claim any further amount by way of interest on the amount determined as payable towards the acquired vehicle to the secured creditor irrespective of the contractual rate of interest. Thus, the contractual rate of interest from the date of vesting till the date of payment of the amount determined as payable to the secured creditor towards the acquired vehicle vesting in the State Government has been modified by the Legislature by inserting sub-section (4) in section 11 of the Act. Therefore, the plaintiff - the secured creditor shall have to calculate interest on the amount determined as payable to it under the Act from the date of vesting till the date of its payment only at 12 per cent. Of course, if the amount payable towards the acquired vehicle vesting in the State Government to the secured creditor is less than the amount due by the defendants to the plaintiff on the date of vesting, on the excess amount, the plaintiff would be entitled to claim interest at the contractual rate till the date of filing of the suit. In other words, the contract would be operating in respect of that amount as such excess amount is not covered by sub-section (4) of section 11 of the Act. Therefore, it follows that the claim as made by the plaintiff in the plaint requires to be modified because, in the plaint, the plaintiff has calculated the interest at 17.5 per cent. from the date of advancing the loan till the date of filing of the suit. Accordingly, point No. 1 is answered as follows :
"Sub-section (4) of section 11 of the Act modifies the contractual rate of interest and fixes the interest at 12 per cent. per annum from January 30, 1976, on the amount determined as payable to the secured creditor towards the acquired vehicle vesting in the State Government till the date of payment of such amount. Therefore, the secured creditor like the plaintiff is not entitled to claim any more amount by way of interest on such amount, i.e., the amount determined as payable to the secured creditor towards the acquired vehicle vesting in the Government from January 30, 1976, till payment."
Points Nos. 2 and 3. - These points are inter-connected and, therefore, they are taken up together for consideration.
Learned counsel for the plaintiff-respondent, with the assistance of the bank official who is present in court, submitted as follows :
Rs. Rs. On 18-11-1975 loan advanced 1,50,000.00 On 23-12-1975 insurance premium paid 487.50 1,50,487.50 On 27-12-1975 amount received 588.00 1,49,899.50 Interest calculated at 17.5 per cent. on Rs. 1,49,899.50 from 18-11-1975 to 30-1-1976 5,201.67 1,55,100.67 Less : Instalment received on 21-1-1976 10,000.00 10,000.00 ----------------- 1,45,100.67 -----------------
Thus, as on January 30, 1976, the defendants were due to pay to the plaintiff a sum of Rs. 1,45,100.67.
From the order of the Deputy Commissioner, Bijapur, dated June 27, 1982, bearing No. MVT. Sr. 18/76(24), it is clear that a sum of Rs. 1,73,200 was determined as the amount payable to the secured creditor - the plaintiff towards the acquired vehicle plus interest. This amount, i.e., Rs. 1,73,200 plus interest at 6 per cent. amounting to Rs. 31,591.03, total Rs. 2,04,791.03 was paid to the plaintiff on October 22, 1981. Thus, the amount due from the defendants to the plaintiff as on January 30, 1976, was less than the amount determined as payable towards the acquired vehicle. Therefore, in the light of the provisions contained in sub-section (4) of section 11 of the Act, the plaintiff was entitled to claim interest on a sum of Rs. 1,45,100.67 at the rate of 12 per cent. per annum from January 31, 1976, to October 22, 1981. The interest so calculated, as submitted by both sides, was to the tune of Rs. 99,749.75. Thus, as on the date of payment of the amount the total amount due to the plaintiff-bank from the defendants was Rs. 2,44,850.42 (i.e., Rs. 1,45,100.67 plus interest of Rs. 99,749.75). Out of this amount, as already pointed out, the plaintiff was paid on October 22, 1981, a sum of Rs. 2,04,791.03 on calculating the interest at 6 per cent. on the amount of Rs. 1,73,200 from January 30, 1976, till payment. After deducting the said amount from the sum of Rs. 2,44,850.42, the balance remaining as on October 22, 1981, was in a sum of Rs. 40,059.39. It may be relevant to notice, as per sub-section (4) of section 11 of the Act that the plaintiff would be entitled to interest at 12 per cent., whereas it has been paid interest at 6 per cent. Therefore, it would be entitled to further interest at the rate of 6 per cent. per annum or Rs. 1,45,100.67 from January 31, 1976, to October 22, 1981, as the Act has been amended enhancing the rate of interest from 6 per cent. to 12 per cent. with effect from January 30, 1976. The interest so calculated, as per the submission made on both sides, was to the tune of Rs. 40,059.39. Whereas the further interest at 6 per cent. per annum payable on the sum of Rs. 1,73,200, as per the submission made by both sides from February 1, 1976, to October 22, 1981, would come to Rs. 50,853.43. Whereas the plaintiff would be entitled to recover only a sum of Rs. 50,853.39. If that be so, there cannot be any decree against the defendants because the plaintiff would be entitled to recover Rs. 40,059.39 from the State Government. But to enable the plaintiff to recover the said amount there shall have to be a decree in its favour for recovery of the balance or Rs. 40,059.39 from the State Government as per sub-section (4) of section 11 of the Act after adjusting the amount of Rs. 2,04,791.03 already paid to the plaintiff. Thus, having regard to the provisions contained in sub-section (4) of section 11 of the Act which are given retrospective effect from January 30, 1976, the decree passed by the trial court requires to be modified. Accordingly, points Nos. 2 and 3 are answered as follows :
"On January 30, 1976, the amount due from the defendants to the plaintiff was in a sum of Rs. 1,45,100.67
The decree of the trial court in the light of the provisions contained in sub-section (4) of section 11 of the Act is not sustainable in law and it requires to be modified as indicated above."
For the reasons stated above, this appeal is allowed in part. The judgment and decree of the trial court are modified. It is ordered and decreed that, as the plaintiff has already been paid a sum of Rs. 2,04,791.03 on October 22, 1981, it would be entitled to recover the balance amount of Rs. 40,059.39 from the State Government in terms of sub-section (4) of section 11 of the Act. As far as the appellants are concerned, the loan stands discharged.
In the facts and circumstances of the case, there will be no order as to costs in this appeal. However, the costs awarded by the trial court are not disturbed.