ANDHRA BANK Vs. VALLURIPALLI NAGARJUN

JUDGEMENT

(1.) AGGRIEVED against the order passed by the PO, DRT, Hyderabad disallowing pendente lite interest, the appellant Bank has come forward with this appeal. So, the appeal is confined only with regard to pendente lite interest.

(2.) The Counsel for the appellant Bank submits that even for pendente lite interest, the Bank is entitled for contractual rate of interest since the borrower respondent is not an agriculturist, it is not a sick unit and the respondents are residing abroad and they are making good profit in their business and they are not entitled for any concession for the pendente lite interest. He further pointed out that the capacity of debtors, value of security, conduct of parties., etc., have to be taken into consideration while deciding the pendente lite interest. He further submits that even pendente lite interest, the Bank is entitled for contractual rate of interest.

(3.) THE Counsel for the appellant Bank relies upon the decision of Madras High Court reported in 1990-I Law Weekly Page 9 and 2000-1 Law Weekly Page 644 and he submits that even pendente lite interest has been given at contractual rate of interest in 1990-1 Law Weekly Page 9, it has been held that "fixing the rate of interest at contractual rate at 13% from the date of plaint till payment is correct". In 2000-1 LW Page 644, the Madras High Court has held that "Order of the Tribunal restricting rate of interest on the decree amount is set aside and contractual rate of 16% is granted and functioning of co-operative societies will come to standstill if they are not able to collect interest at contract rate." Relying upon these decisions, the Counsel for appellant Bank submitted that the appellant Bank is entitled for the contractual rate of interest pendente lite.