Sri Kishore K. Vasu & Anr. vs Union Bank Of India & Ors.

This appeal is filed against the order passed in OA 341/2011 by the learned Presiding Officer, DRT, Karnataka at Bengaluru.

Learned counsel for the appellants submitted that the appellants availed loan facility from respondents 1 and 2. Respondents 1 and 2 filed OA 341/2011 for recovery of Rs.17,56,241/- together with pendente lite interest and future interest at 13% and a sum of Rs.3,51,54,750/- together with pendente lite interest and future interest at 13.75% and also a sum of Rs.1,87,89,685/’- together with pendente lite interest and future interest at 12.25%. The interest was claimed compounding monthly rests. The learned Presiding Officer, DRT, Karnataka at Bengaluru passed an order as prayed for in the claim application with pendente lite interest and future interest to be compounded with monthly rests. The main ground on which, this appeal is filed against the grant of interest compounded with monthly rests from the date of the OA till the date of complete realization.

It is the submission of the learned counsel for the appellants that there is no agreement entered into between the appellants and the respondents 1 and 2 with regard to charge of interest compounded with monthly rests. In the absence of any such agreement, the prayers made for compounding the interest at monthly rests and passing orders as prayed for is not correct and therefore, this appeal.

Learned counsel for the respondents 1 and 2 objected this appeal on the ground that as per the hypothecation agreement, the interest chargeable at 11% p.a. with 2% penal interest, in case, there is default in payment or over due.

There is no document produced before this Tribunal to justify the prayers sought for compounding the interest with monthly rests. In such circumstances, this Tribunal is of the view that the order of the learned Presiding Officer, DRT, Karnataka at Bengaluru, ordering interest compounding with monthly rests from the date of OA till the date of realization is not legally tenable. In this view of the matter, this Tribunal set asides the order of the learned Presiding Officer, DRT, Karnataka at Bengaluru in OA 341.2011 insofar as ordering interest compounding with monthly rests from the date of the said OA till the date of realization on the amount claimed and instead, this Tribunal passes an order to the effect that the respondents 1 and 2 are entitled to claim interest at 13% p.a. , 13.75% p.a. and 12.25% p.a. simple from the date of OA till the date of the order passed in the OA and thereafter, at 6% p.a. simple from the date of the order till the date of realization. In all other aspects, the order of the learned Presiding Officer, DRT, Karnataka at Bengaluru will hold good.

In the result, this appeal is allowed as indicate above. The learned Presiding Officer, DRT, Karnataka at Bengaluru is directed to issue revised recovery certificate to the amount decreed at the rate of interest at 13%, 13.75% and 12.25% p.a. simple, from the date of OA 341/2011 till the date of the order and thereafter 6% p.a. simple from the date of the order till the date of realization. Parties shall bear their own costs. Pending IAs, if any, shall stand closed.