STATE BANK OF INDIA Vs. DEEPTHI CEMENTS P LTD

JUDGEMENT

(1.) THE appellant Bank filed original application (OA) for recovery of Rs. 11,51,996.50 p. with interest at 15.25% per annum. THE DRT allowed the application holding that the Bank is entitled to Rs. 7,50,000/- with Simple Interest @ 10% per annum from the date of lending till realisation. Aggrieved against the order the appellant Bank has filed this appeal.

(2.) Counsel for the appellant Bank submits that as per the ledger extract the outstanding amount as per the loan and interest up to the date of filing of the OA, the amount due from the defendants to the Bank is Rs. 11,51,996.50 p and only for that amount the OA was filed but the Presiding Officer, DRT, allowed the application only for Rs. 7,50,000/- with simple interest @ 10% per annum. The respondents remained absent. Counsel for the appellant Bank submitted that as per the documents and agreement entered into between the Bank and the defendants, the defendants arc liable to pay interest at the rate of 15.25% and the Presiding Officer, DRT, has reduced the interest to 10% from the date of lending till realisation and the PO, DRT, has no right to reduce the rate of interest from the date of lending till realisation and even as per the Supreme Court judgment, the Presiding Officer, DRT, has right to reduce the interest for the period pendente lite and post decree and the Presiding Officer, DRT, has no right to reduce the rate of interest from the date of lending. He drew my attention to the documents Exs. A3, A4 and A5. In Ex. A4 agreement, Clause 9 of the agreement provides for charging of interest at enhanced rate. Clause 9 reads as follows:

(3.) ON a perusal of Ex. A4, it is revealed that the Bank is entitled to charge compound interest. Under Ex. A3, the defendants have agreed to pay interest at 15.25% per annum so, it is clearly borne out by documents that the defendants have agreed to pay interest at 15.25% and the Bank is also entitled to charge at quarterly rests. So, the defendants are liable to pay Rs. 11,51,996.50 p. and the Bank is entitled for that amount. The order passed by the Presiding Officer, DRT, directing charging simple interest at 10% p.a. from the date of lending till realisation and also holding that the Bank is entitled to charge Rs. 7,50,000/- with simple interest at 10% from the date of lending till realisation, is not sustainable and it is liable to be set aside and it is set aside. ON a perusal of the entire records, it is crystal clear that the Bank is entitled for Rs. 11,51,996.50 p. i.e. the amount claimed in the OA. With regard to the interest during pendente lite and post decree, the award of interest at 10% is allowed.