Decided on March 06,2006



P.K.Deb, - (1.) THIS appeal has been preferred against the judgment and order dated 11th November, 2003 passed by the learned Presiding Officer, D.R.T., Jabalpur in Original Application No. 373 of 1999, whereby and whereunder the claim of the respondent-Life Insurance Corporation of India has been allowed to the tune of Rs. 13,75,646/- together with interest pendente lite, future and cost and other usual reliefs have also been granted regarding realization of the outstanding by sale of mortgaged properties.
(2.) This appeal has been preferred against only the portion of the judgment, whereby allegedly excessive interest has been granted by the learned Tribunal beyond the scope of contractual agreement. The other point regarding bar of limitation, although was raised, but the appeal has been admitted only with regard to the interest matter and not the other matters. Taking of loan to the tune of Rs. 2.50 lacs for extension of the premises, etc. of the borrower-defendant No. 1 whose partners are defendant Nos. 2 to 4 is admitted. According to the appellants as per the contract, no interest was payable compoundedly or on half yearly rest basis, as offer of contract law enumerated in Exhibit No. A-2 for the loan under M-1 scheme did not provide for interest at the quarterly rest and as such compound interest as claimed was beyond the scope of contract. In support of the contention of the appellants, Clause No. 4 of the Exhibit No. A-2 has been referred to wherein it is submitted that word 'rests' was never written, rather it was written as rates and hence the Tribunal and the respondent-L.I.C. had misread the provisions of contract and hence excessive interest have been claimed on compound basis.
(3.) THE second point is that Exhibit A-2 is only an offer and contract becomes complete, when the offer is accepted by the other party. Here although no express acceptance was there of the offer, but from the documents executed by the borrower, such as D.P. Note, etc., it can be presumed that acceptance was there of the offer for calculating interest at 15% per annum only as D.P. Note does not say anything about quarterly rests. THE second point as raised from the side of the appellant is that the contract was invoked originally on 29th July, 1991 and again it was further invoked on 1st December, 1998 and the Original Application was filed in the year 1999. No reasonings have been given from the side of the respondent as to the delay in filing of the suit and thus accumulating interest for long 8 years and thrust upon the appellant and in that way this Court should consider the excessive interest claimed in the light of Section 19(20) of the RDDBFI Act. THE last point has been urged to the effect that respondent No. 5 was only an attorney of the borrower-defendant Nos. 2 to 4 and as such no decree can be passed cither jointly or severally against the defendant No. 5 as he was not personally responsible for the outstanding dues of the firm or their partners. This point has got much force on the face of the records itself and admission being made from the side of the respondents that defendant No. 5 was only an attorney of the other defendants. But it appears that appellant No. 2 died during the pendency of the proceeding and his name was struck off and his heir defendant No. 5 has already been there on record, no substitution was made. In that way, the liability of defendant No. 2 goes to the defendant No. 5 and hence even though he might be attorney of other defendants, but his personal liability also remains as being heir of defendant No. 2, when the property of defendant No. 1 comes to defendant No. 5 by way of inheritance. Regarding offer and acceptance as has been urged by Mr. V.D. Chauhan, it is the principle of law that offer made by one party may be expressly accepted by the other party or by conduct and doing the some act, acceptance can be inferred from the action of the other party concerned. In the present case on the offer being made by exhibit No. A-2, the loan was taken by the appellants and nowhere it is there that they have ever raised any objection, regarding the compounding of the rate of interest half early as mentioned in Clause 4. It is true that under that clause the word 'rests' had not been mentioned specifically, but when the halfyearly rate of interest has been said to be compounding, then the meaning remains that half yearly interest shall be compounded and it would be added to the principal, hence, although the word 'rests' is not mentioned in Clause 4 but when the clause is being read in between the lines, it becomes clear that the loan was granted with 15% half yearly interest compounding thereof. Hence on this point I do not find that the appellants could be able to make out any case in their favour. THE judgment of Karnataka High Court as referred by Mr. V.D. Chauhan as reported in Syndicate Bank v. Mahalaxmi Ginning Factory II (2005) BC 230 : 2005(2) Bank C.L.R. 41 (Kant.), has got no application in view of the wording of the Clause 4 as mentioned in Exhibit A-2.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.