H.P.STATE COOPERATIVE BANK LTD. Vs. THE DEPUTY SECRETARY TO THE GOVT.
LAWS(HPH)-1997-6-39
HIGH COURT OF HIMACHAL PRADESH
Decided on June 02,1997

H.P.STATE COOPERATIVE BANK LTD. Appellant
VERSUS
THE DEPUTY SECRETARY TO THE GOVT. Respondents





Cited Judgements :-

RATAN CHANDRA SARKAR VS. KUSHKANTA SARKAR & ANR. [LAWS(CAL)-2016-9-176] [REFERRED TO]
GOBINDA CHANDRA MAITY VS. RABINDRA NATH BERA AND ANOTHER [LAWS(CAL)-1998-2-58] [REFERRED TO]


JUDGEMENT

M.SRINIVASAN, J. - (1.)In C.W.P. No. 590/88, the HP. State Cooperative Bank Ltd., which is hereinafter referred to as the Bank is the petitioner. Respondents No. 3 to 6 therein are the petitioners in C.W.P. No. 31/90, which are hereinafter referred to as the respondents. There is a dispute between the Bank and the respondents, which was referred for arbitration by the District Cooperative Supplies Officer, Chamba. By an award dated 29.6.1983, the Arbitrator held that the respondents were liable to pay a sum of Rs.4, 29, 787.06. He granted time to the respondents for payment of the said amount as follows: First installment on or before 31.12.1983. Rs.1,00,000.00 Second installment on or before31.12.1984. Rs.2,00,000.00 Third and final instalment on or before 30.6.1985. Rs.1,29,783.06 He added, however, that the exoneration of interest is only subject to the repayments as per instalments fixed above and in case of defalcation in payment timely by the respondents at any stage, the plaintiff -Bank shall be entitled to recover simple interest at the rate of 14% per annum on the principal amount of Rs.4, 29, 783.06 w. e. f. 1.7.1977 onwards along with penal interest at the rate as may be in vogue in the plaintiff -Bank as on 29.6.1983 from the date of the award.
(2.)The Bank was aggrieved by the said award and filed an appeal before the Deputy Secretary (Cooperation) under Section 93 of the Himachal Pradesh Cooperative Societies Act, 1968. Two contentions were urged in the main by the Bank. The first was with regard to splitting of the liability of the respondents and the second related to the interest payable on the amount found due by the Arbitrator In so far as splitting of the liability is concerned, an undertaking was given by Shri Kuldeep Chowfla, who was one of the legal representatives of the original respondent Shri Srikanth Chowfla that he would be responsible for payments of the amount, as decided in the appeal on behalf of all the respondents. With regard to interest, the Appellate Authority held interest in favour of the Bank. The Appellate Authority proceeded to hold that there was an agreement in the promissory note dated 16.9.1974 to pay the interest at the rate of 12% per annum on the loan with monthly rests. Hence, the Appellate Authority held that the Bank would be entitled to get interest at the rate of 12% with monthly rests. However, the Appellate Authority proceeded to take the view that the respondents had tendered a sum of Rs.40, 000/ -on 24.12.1983 towards the amount due under the award, but the Bank refused to receive it. On that footing, the Appellate Authority held that the bank will not be entitled to get interest from the date of the Arbitators award till the date of the Appellate order. The Appellate Authority further held that the respondents shall pay the entire amount on or before 31.12.1988 and till that date, the respondents were liable to pay interest at 14% per annum on the unpaid amount on the basis of the monthly rests. On a reading of the order of the Appellate Authority in entirety, it is clear that what has been awarded by him is interest from 30.7.1988 till the date of payment of the entire amount at 14% per annum with monthly rests. He has dis -allowed interest from 29.6.1983, till 30.7.1988.
(3.)The aggrieved Bank has preferred C.W.P. No. 390/88 challenging the decision of the Appellate Authority on both the grounds. The respondents have preferred C.W.P. No. 31/90. Though they did not file any appeal against the Arbitrators award, they have chosen to challenge in the writ petition not only the order of the Appellate Authority, but also the award passed by the Arbitrator. The ground on which they have challenged the award is that the Arbitrator has no jurisdiction to grant interest and penal interest. Reliance is placed by the respondents on the judgment of the Supreme Court in Executive Engineer, Irrigation, Galimala and others Vs. Abnaduta Jena, AIR 1988 S.C. 1520."


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