S.B.I. vs Pritam Singh and Others

S.K. Gupta, J.—This appeal arises out of the judgment and decree dated 20.10.1990 passed by the learned District Judge (Bank Cases),

Jammu.

By the aforesaid judgment and decree passed in File No. 231/Civil-169/Civil Bank Cases, titled State Bank of India v. S. Harnam Singh and

Ors., the Trial Court decreed the suit of the plaintiff-Bank for recovery of amount, but declined to award the pendente lite and the future interest.

Facts giving rise to this appeal, in brief, are that a loan was obtained by the (56) Vol. II SBI v. Pritam Singh and Ors. defendants/respondents-1

to 3 for the purchase of a Tractor and executed the required documents. Whereas defendants/respondents 4 and 5 stood sureties to pay the loan

amount in case the borrowers may default in the payment of the loan. The loan amount was to be liquidated in 12 equal instalments within a period

of six years. The defendants, however, paid the instalments of the loan amount of recovery up to June, 1985. They, however, committed default in

payment of loan instalment. The balance sheet of the Bank also speaks that defendants for the liquidation of the loan amount have paid instalments

up to June, 1985. The plaintiff-Bank, however, without waiting for the expiry period of six years, and issuing a notice to the defendants,

commenced a suit for the recovery of the balanced amount against the defendants outstanding on account of the loan advanced for the purchase of

the Tractor. However, defendant No. 1 appeared before the Trial Court in response to the notice on 20.8.1990 and admitted the claim of the

plaintiff-Bank, in submitting that except after the credit of Rs. 10,000 to 12,000, deposited during the currency of the suit with the plaintiff-Bank,

the same be treated to have been liquidated. Another defendant No. 2, Nirmal Singh, also appeared on 23/6/1990. He also admitted the claim of

the plaintiff-Bank for the recovery of the balance amount and stated that the credit of an amount of Rs. 9,000 has already been paid during the

currency of the suit. In the like manner, defendant 3, S. Mohan Singh, borrower also admitted the loan obtained from the Bank for the purchase of

Tractor and had executed the agreement deed and other documents. The defendants, however, admitted and expressed their readiness to liquidate

the balance amount but prayed for the waiver of the pendente lite and future interest. The record further shows that the defendants had paid Rs.

70,051.33 to the plaintiff-Bank in cash through their Counsel in liquidation of the outstanding suit amount in lumpsum at the initial stage of the suit

along with litigation expenses. The Trial Court after taking into consideration the bona fides of the defendants and their financial position, besides

the payment of the suit amount with utmost promptitude, declined to award the pendente lite and future interest, which admittedly had already been

paid by the defendants during the currency of the suit, which became the subject matter of challenge in this appeal.

Heard the arguments and also perused the record meticulously.

Two-fold grievance has been projected in this appeal; first pertains to the declining of the pendente lite interest and the second to the future

interest on the suit amount. It may be pointed out at the first flush that it is the discretion of the Trial Court to award pendente lite and future

interest. The Appellate Court cannot interfere without good reasons. The Appellate Court would interfere only if the trial Judge does not apply his

mind to the facts of the particular case. Mr. M.P. Gupta, learned Counsel appearing for the appellant-Bank, however, vehemently urged that a

creditor would be entitled to pendente lite and future interest unless there are reasons that the creditor should be deprived of it. He further

submitted that the award of interest pending suit is discretionary, it should not be refused in the absence of proper reasons. It is apt to point out that

in money suits, the question of interest after institution of the suit passes from domain of contract into that of judgment, and a plaintiff cannot as a

matter of right claim interest.

Adverting to the factual matrix of the case, the loan sanctioned by the plaintiff-Bank to the borrowers for the purchase of Tractor was to be

liquidated in 12 equal instalments within the given period of six years that was mentioned. It is not in dispute that the plaintiff-Bank has filed the suit

before the expiry of the period of six years. The loan was sanctioned on 29.4.1981 and the last instalment had fallen due on 29.4.1987. No

justification has been given for filing the suit for recovery prior to the expiry of the stipulated period of six years and without giving an opportunity to

the defendants for payment of the balance instalments in the event of any default was committed by giving a requisite notice. The balance sheet

discloses that borrowers, defendants/respondents, regularly paid the instalments. This shows the bonafide intention of the borrowers to liquidate

the loan amount in its all earnest. It is further admitted by the appellant-Bank that after the service, the defendants made an application on

20.8.1990 wherein the claim of the plaintiff-Bank for the recovery of the suit amount was admitted. The defendants also expressed their readiness

to pay the suit amount in lumpsum, but only sought waiver of interest pendents lite, obviously, on the ground that they have been paying the

instalments regularly to clear the arrears of loan, but the plaintiff-Bank had filed a suit before the expiry of stipulated period of six years for the

payment of only last instalment without any justification. Even no notice was served upon the defendants prior to the filing of the suit, demanding the

payment of the instalment. Mr. M.P. Gupta, learned Counsel appearing for the appellant-Bank, candidly conceded that by paying the lumpsum

amount, the defendant-borrowers had made the payment of the suit amount along with the costs of the litigation in lumpsum at the initial stage of

suit. The Trial Court by giving special reasons based on the facts and circumstances referred to above, particularly when the suit amount along with

litigation expenses was already paid, declined the award of pendente lite and future interest.

From the perusal of the record, it transpires that the last payment was to be made in the year 1987 on account of refund of the loan to the

plaintiff-Bank and the suit has been filed even when the period for which the loan was sanctioned has not yet expired. The record further shows

that the lumpsum payment has been made by the defendant-respondents along with the litigation expenses at the initial stage of suit. Defendants are

agriculturists and they mostly depend upon production from land. Sometimes because of bad weather or secondary rain, their earnings get

diminished considerably making them unable to pay the instalment. The irregularity in such event cannot be said to be imputed by wilful intention,

but on account of the inevitable circumstances which come in their way to make the payment of regular instalments. In such circumstances, the

defendant-borrowers cannot be said to be the intentional defaulters. The balance sheet of the plaintiff-Bank also supports the bona fide of the

defendant-borrowers in regard to making of regular payment of instalments. The judgment entitled Bank of Baroda Vs. Shri Subhash Chander

Dutta and Others, relied upon by the learned Counsel appearing for the appellant, has no application to the facts of this case being clearly

distinguishable.

In the aforesaid case, the period of six years during which the amount had to be liquidated had already expired. In the present case, there has

been no attitude shown to disown the loan and there also being no sufficient financial sources available with them other than the earning from

agriculture.

All these facts when taken together in its cumulative are sufficient to reach a conclusion that the discretionary power of the Court, declining the

interest pendente lite and post-decree interest, is to be held sustainable. Pendente lite as well as post-decree interest is in the nature of

compensation or damages, which the Court may or may not award to the plaintiff for being kept out of the money due to him depending upon the

facts and circumstances of each case. The discretion has been exercised by the Trial Court judiciously giving reasons for not awarding the

pendente lite and future interest. The decision of the Trial Court, in my opinion, is sound and unimpeachable and is, therefore, hereby confirmed.

For the foregoing reasons, the appeal possesses no merit and is hereby dismissed, however, with no order as to costs.