The DRT allowed an appeal against an interest rate of 12% p.a. granted by the DRT, countering the bank's claim for 22.25% p.a. The tribunal dismissed the appeal, holding the lower order was supported by proof affidavit and no evidence was produced for the higher rate.
Appeal RA 44/2017 dismissed; parties to bear their own costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
RA 44/2017
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 07th of February, 2024
PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON
RA 44/2017
(OA 500/2007 on the file of DRT- III, Chennai)
Between
Indian Bank,
Thiruvottiyur Branch, Chennai -19.
(now transferred to Indian Bank, ARMB 2 Zonal Office Building, 4th Floor 55, Ethiraj Salai, Egmore, Chennai- 600 008) Rep. by its Chief Manager.
… Appellant
And
Rep. by its Managing Partner
23, Anna Nagar, I Street, Sathuma Nagar, Chennai – 600 019.
23, Anna Nagar, I Street, Sathuma Nagar, Chennai – 600 019.
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RA 44/2017
Respondents
(R3 to R6 are given up)
Counsel for Appellant : Mr. T. Kamalakannan Counsel for R7 : Mr. S.Nagarajan Counsel for R8 : Mr. Sampathkumar Associates
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ORDER
1. This Appeal is against Order dated 12.10.2012 in
OA 500/2007 of DRT- III, Chennai.
2. Brief facts leading to this Appeal are as follows:-
Appellant herein filed above referred OA for recovery of Rs.26,99,420/- from Defendants 1 to 7, jointly and severally together with interest at 22.25% p.a., with quarterly rests, from the date of Application till payment.
OA was contested by Defendant No.2 and Defendant
No.8.
On a consideration of evidence adduced on behalf of
both parties, Tribunal below allowed OA and granted Recovery Certificate for the amount claimed, with interest at 12% p.a., from the date of OA till realization.
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Aggrieved by rate of interest, Bank preferred present Appeal. Here also, only Respondent No.8 contested the matter, whereas, Appellant has given up Respondent Nos.3 to 6, and other Respondents remained ex parte .
3. Both sides filed Written Arguments and reiterated the
same at the time of oral submissions.
4. Advocate for Appellant submitted that OA is originally
filed before DRT-I, Chennai, and registered as OA 191/1997
and as Defendants 1 to 7 remained ex parte , an ex parte Final Order was passed on 14.07.1998 awarding interest at 15% simple interest. Defendant No.2, filed an Application
to set aside ex parte Order. In the meantime, OA is transferred to DRT-III, Chennai, and renumbered as OA 500/2007, and DRT-III, allowed the Application of Defendant No.2, on 12.12.2007, and thereafter, Defendant No.2 filed Written Statement. Thereafter, the subsequent purchaser
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filed an Application to implead it as Defendant No.8 in OA, and said Application was allowed, and Defendant No.8 was impleaded in OA, which filed Written Statement and Counter Proof Affidavit. On behalf of Bank, Proof Affidavit is filed and Exhibits A1 to A42 are marked, and on behalf of Defendant No.2, only Proof Affidavit is filed, and on behalf Defendant No.8, besides Proof Affidavit, documents Exhibits D1 to D7 are marked. He submitted, Order of Tribunal below is erroneous and failed to consider claim of Bank at contractual rate of interest for pendentelite period. He submitted, interest at 12% p.a., is totally biased, and there are no grounds for reduction of interest. It is further submitted, Tribunal below failed to give any reason for reduction of interest.
5. On the other hand, Advocate for Defendant No.8 submitted, Tribunal below exercised its discretion and granted interest at 12% p.a. for pendentelite period and same is quite reasonable.
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6. I have perused material papers including Proof Affidavit of Bank Officer.
7. The only dispute is with regard to rate of interest granted by DRT. No doubt, Bank claimed interest at 22.25% p.a. with quarterly rests from the date of Application till payment, but in the Proof Affidavit, rate of interest at 22.25% p.a. from the date of loan till the date of Application, alone is stated. Nothing is whispered about pendentelite period. In para 7 of its Proof Affidavit, it is stated, Defendants are jointly and severally liable to pay the following amount by referring to principal and interest from 01.01.1997, till date of Application. There is no prayer in Proof Affidavit to grant 22.25% p.a. from the date of Application till payment. Simply because it is pleaded in the OA, Tribunal below is not expected to grant the same without there being any evidence. When Proof Affidavit of Bank Officer is completely silent, contending that the interest
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granted by Tribunal below is biased and without giving any reason, cannot be accepted. As rightly pointed out by Advocate for Defendant No.8, it is the discretion of Tribunal below to grant pendentelite interest, and while exercising its discretion, if there is any flaw, then only, Appellate Court or Tribunal, has to interfere. But here, when Bank Officer himself has not deposed anything about rate of interest for the period from the date of Application till payment, Tribunal below is perfectly justified in exercising its discretion and granting simple interest. Further, rate of interest granted by Tribunal below is quite reasonable, and I do not find any wrong in the Order of Tribunal below.
8. For the above reasons, it is held that the Appeal is
devoid of merits and liable to be dismissed.
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9. In the result , Appeal RA 44/2017 is dismissed. Parties
shall bear their own costs. All pending IAs, if any, stand closed.
[Dictated to Athistamani, PS, transcribed by her, corrected, signed and pronounced by me in open court, 7th February, 2024]
[ Justice S. Ravi Kumar]
CHAIRPERSON
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2 issues framed by the court
Whether the Debt Recovery Tribunal erred in granting interest at 12% p.a. for the pendente lite period when the Bank did not produce evidence for the contracted rate of interest.
Whether the appellate court is justified in dismissing the appeal without finding any flaw in the Tribunal's exercise of discretion on interest rates.
Indian Bank
M/s. R.S. Construction Company
V. Selvaraja Sekar
V. Gnanasigamani
Saroja Venkatramani
S. M. Gopal Chettiar
S. Ravi Kumar
As recorded by the court registry
14 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
