State Bank Of Patiala vs Zenith Systems Buildings Pvt. Ltd.

J.M. Malik, J

The genesis and sequence of this case is as follows. Mr. B.S. Mathur, learned ADJ vide his order dated 27.11.1995 had decided the case between the parties. The operative paras of the said order run as follows:

In the light of the above and in view of the admission of the defendants in unequivocal terms supported with loan documents, the case of the plaintiff stands proved. I, therefore, pass a decree for sum of Rs. 4,01,950.40 in favour of the plaintiff and against the defendants.

However, in the present circumstances, I feel that awarding of 10% interest simple will meet the ends of justice. Accordingly, the suit of the plaintiff is decreed as aforesaid with interest at the rate of 10% simple interest pendente lite and future. However, if the decretal amount with the rate of interest is not paid within a period of six months from today, then in that case, the defendants will not be entitled to the benefit given to them and the plaintiff will be entitled to recover the interest on the outstanding decretal amount at the rate of 16.25% p.a. as agreed between the parties.

The said amount was not paid within six months. There was delay of three days only. Till 30.5.1996 full amount was not deposited. A sum of Rs. 1.50 was still due. Counsel for the appellant has invited my attention towards the statement of accounts which goes to show that Rs. 1.50 were pending as on 30.5.1996 and again on 6.9.1996. However, it has transpired that this was statement of accounts in respect of "protested bill account" which did not include the interest which amount as a matter of fact was Rs. 80,614/- as per letter sent by the Bank to the respondent/ borrower dated 19.6.1996.

Thereafter, before March 2001, the Bank posted another letter to the borrower which goes to reveal that the demand was reduced to Rs. 37,741.50 as per guidelines issued by the Reserve Bank of India. The said scheme was available till 31.3.2001 but the borrower did not opt for the same.

Thereafter, the Bank requested the respondent vide letter dated 5.8.2002 to make the payment of the said amount which had swelled up to Rs. 1,35,982/-. The respondent was further given option that in case he was going to pay the amount till 20.8.2002 the interest @ 10% would be charged failing which the Bank would charge interest at the contractual rate of interest @ 16.25% p.a. with quarterly rests but the respondent did not respond to the said letter.

The Bank gave yet another offer to the respondent vide undated letter but it mentioned that the opportunity detailed in this letter was available till 30.9.2003. The respondents were directed to deposit Rs. 3,86,2937- plus interest but they did not avail the same.

The execution petition was filed before the learned District Judge and the execution petition was transferred to the Court of DRT-III.

Thereafter, the appellant Bank issued notice under Section 13(2) of the SRFAESI Act on 6.11.2007 wherein a demand in the sum of Rs. 28,58,857.03 as on 31.10.2007 was raised. However, vide the impugned order the respondent was required to pay to the Bank a sum of Rs. 3 lacs and the appeal stood disposed of.

There is question of payment of pendente lite and future interest. Counsel for the appellant Bank insists that contractual rate of interest should be imposed @ 16.25% p.a. with quarterly rests.

I see no force in his arguments. In the cases reported in State Bank of India v. Sarathi Textiles & Ors., II (2009) BC 696: 2008 (3) SCALE 409, C.K. Sasankan v. Dhanalakshmi Bank Ltd., : I (2009) CLT 368 (SC): I (2011) BC 122 (SC): 2009 (2) DRTC 320 (SC) and Sardar Associates and Others v. Punjab & Sind Bank and Others, : III (2009) BC 705 (SC): III (2009) CLT 186 (SC): AIR 2010 SC 218, it was held that it is the discretion of the Court to award the pendente lite and future interest which has to be exercised fairly. Section 19(20) of the DRT Act runs as follows:

19(20) The Tribunal may, after giving the applicant and the defendant an opportunity of being heard, pass such interim or final order, including the order for payment of interest from the date on or before which payment of the amount is found due up to the date of realization or actual payment, on the application as it thinks fit to meet the ends of justice.

No rate of interest under the circumstances can be made a rule of thumb.

However, this is admitted that the loan was obtained for commercial purposes and the respondent has been dodging the Bank for the last 16 years. Counsel for the respondents further submits that as a matter of fact the business was closed in 1988. However, the record reveals that number of opportunities were granted to the respondent to pay off the loan but they waddled out of their commitments.

Keeping in view all the facts and circumstances, I hereby order that the respondent would pay a sum of Rs. 80,614/- as is demanded by the Bank vide letter dated 19.6.1996. I also award future and pendente lite interest @ 16% p.a. simple and also award the costs throughout in favour of appellant Bank and against the respondent. After hearing the Counsel for the parties, I hereby direct that the total costs of the case will not exceed a sum of Rs. 1 lac.

The appeal stands disposed of.

Copies of this order be furnished to the parties as per law and one copy be sent to the learned DRT forthwith.