INDIAN BANK Vs. VETRIVEL
LAWS(DR)-2003-2-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on February 10,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE Bank filed OA-252/1997 before the DRT for realisation or the amount due to it by the defendants. THE matter was disposed of by the Tribunal and decree was passed by the PO, DRT, Chennai, and the PO, DRT, ordered to issue a Recovery Certificate on the revised Statement of Account with simple interest at 18% per annum throughout i.e. from the date of transaction till the date of filing of the Suit and simple interest at 8% p.a. on the outstanding as per the revised Statement of account as observed in para 9 of the Order, from the date of filing of the suit till the date of realisation with proportionate costs. Aggrieved against the Order passed by the PO, DRT, on the question or award of interest, the appellant Bank has preferred this appeal.
(2.)Counsel for the appellant Bank submitted that two loans were taken by the respondents agreeing to pay interest at the rate or 18% p.a. with quarterly rests in respect of the 1st loan and 17,5% p.a. with quarterly rests in respect of the 2nd loan and the respondents cannot go back to their own volition in paying interest and as per the contractual rate the respondents are liable to pay the interest and the award of interest by the PO, DRT at 18% p.a. simple interest from the date of transaction till the date of filing of the Suit and at 8% p.a. from the date of filing of the Suit till the date of realisation is not sustainable and it is liable to be set aside and contractual rate of interest has to be awarded. Counsel for the appellant Bank further submitted that the loan was availed for construction purpose and after construction even before the discharge of the loan the respondents 1 and 2 sold the property to respondents 3 and 4 and the subsequent purchasers are not entitled for any concessional rate of interest. He also relies upon the documents Exs. A26 and A27. In Ex. A26 loan sanction letter, the rate of interest is stated as 18%. In Ex. A27 sanction letter for additional loan amount, the rate of interest is stated as 17.5% These documents state only 18% interest and 17.5% interest. They do not speak about quarterly rests. So, even as per the sanction letter the contractual rate of interest is 18% and 17.5%. and not with quarterly rests. Exs. A26 and A27 clearly reveal that the contractual rate of interest is only 18% and 17,5%.
Counsel for the appellant Bank relies upon the Demand Promissory Note and submits that the respondents are liable to pay 18% interest with quarterly rests. Of course, in the Promissory note it is stated with quarterly rests. But in the sanction letters Exs. A26 and A27, it is nowhere stated with quarterly rests and only 18% and 17.5% as mentioned. Counsel for the appellant Bank submitted that the respondents 1 and 2 who are the signatories to the Pronote, the borrowers have signed the Pronote agreeing to pay 18% p.a. from the date of loan to the date of payment in full with quarterly rests and so the respondents are liable to pay interest at 18% with quarterly rests. But in the original sanction letter, it is stated only as 18% and 17.5% interest. No quarterly rests is stated.

(3.)COUNSEL for the respondents submitted that the Pronotes are the printed forms and only the rate of interest and names and account are typed and since it is a printed format contains the quarterly rests, but typed matter reveals only 18% and that printed form containing quarterly rests does not hold good inasmuch as the sanction letters reveal only 18% and 17.5% interest without any mention about quarterly rests. In Ex. A28, the RBI has written letter to the Indian Bank which states that the rate of interest is 18% per annum. So, Ex. A28 also clearly reveals that the respondents are liable to pay only at 18% p.a. In the face of Exs. A26, A27 and A28, the mentioning of interest and the quarterly rests in the Pronote does not hold good. Exs. A26, A27 and A28 clearly reveal that the respondents are liable to pay interest only at 18%. The PO, DRT, has round that in terms of the contract as per the sanction letters Exs. A26 and A27 and in view of the RBI letter in Ex. A28, he is of the opinion that the appellant Bank is not entitled to quarterly rests and the Bank is entitled to claim only 18% simple interest per annum throughout all the date of filing of suit. He has found that the applicant Bank is entitled for 8% simple interest from the date of filing, till the date of realisation in the light of the judgment of the Apex Court in N.M. Veerappa v. Canara Bank, II (1998) SLT 36=AIR 1998 SC 1 page 1101.


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