Partly allowed

K.K.Davis v. Federal Bank Ltd., Kalady

Kerala HC29 Jun 2009RFA/387/2009

Case brief

AI extract

What is this about?

This regular first appeal challenges the future interest rate awarded in a bank recovery suit. The High Court held the 19.38% rate exorbitant and reduced it to 12% until the date of decree and 10% thereafter up to realization.

What did the court decide?

Future interest rate of 19.38% per annum set aside; decree modified to 12% p.a. until decree date and 10% p.a. until realization.

K.K.Davis Vs Federal Bank Ltd., Kalady — Contract and Commercial Disputes | Kerala HC (2009)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE P.R.RAMAN

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THE HONOURABLE MR. JUSTICE P.BHAVADASAN

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MONDAY, THE 29TH JUNE 2009 / 8TH ASHADHA 1931

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RFA.No. 387 of 2009()

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--------------------OS.59/2003 of PRINCIPAL SUB COURT,PARAVUR

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APPELLANTS/DEFENDANTS(S):

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K.K.DAVIS, AGED 49 YEARS,

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S/O. KUNJU VAREED, KOLENCHERRY HOUSE,

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MATOOR, KALADY.

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SALY DAVIS,

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AGED 38 YEARS,

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W/O. K.K. DAVIS DO. DO.

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BY ADV. SRI.M.A.ABDUL HAKHIM

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SRI.JYOTHISH.J.KALLINGAL

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RESPONDENT(S)/PLAINTIFFS & DEFENDANTS 3, 5 & 6:

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FEDERAL BANK LIMITED, KALADY BRANCH.

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MOLY VARGHESE, AGED 42 YEARS,

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W/O. LATE SRI. M.K. VARGHESE,

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MENACHERRY HOUSE,

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MAROTTICHODU, MATTOOR, KALADY.

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NEJU VARGHESE,

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S/O. LATE SRI. M.K. VARGHESE,

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MENACHERRY HOUSE,

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MAROTTICHODU, MATTOOR, KALADY.

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KUMARY NEETU VARGHESE, AGED ABOUT 16 YEARS (MINOR), D/O. LATE SRI. M.K. VARGHESE, MENACHERRY HOUSE, MAROTTICHODU, MATTOOR, KALADY, REPRESENTED BY HER MOTHER AND NATURAL GUARDIAN MOLY VARGHESE.

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ADV. SRI.A.ANTONY FOR R1

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SMT.LEELAMMA ANTONY FOR R1

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SRI.V.RAJENDRAN (PERUMBAVOOR) FOR R2 SRI.GEORGE VARGHESE KIZHAKKAMBALAM FOR R2

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION ON 29/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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P.R. RAMAN & P. BHAVADASAN, JJ.

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- - - - R.F.A. No. 387 of 2009

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- - - - Dated this the 29th day of June, 2009.

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JUDGMENT

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Bhavadasan, J,

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First and second defendants in O.S. 59 of 2003

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before the Principal Sub Court, North Paravur, who along with the other defendants suffered a money decree, are the appellants. Parties and facts are hereinafter referred to as they are available before the court below.

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The first defendant is a partnership firm registered under the Indian Partnership Act. Defendants 2 and 3 are its partners. The firm availed of financial accommodation by the Bank to the limit of Rs.3,50,000/-. Later the loan was rescheduled. Necessary documents were executed in favour of the Bank. Equitable mortgage was also created. Since the loan amount remained unpaid, the Bank instituted a suit for money.

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R.F.A. 387/2009.

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Defendants 1, 2 and 4 resisted the suit. They

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disputed their liability. They pointed out that the bank had no authority to charge compound interest. They also contended that

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certain payments made by them were not seen accounted by the Bank. They therefore prayed for dismissal of the suit.

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A written statement was filed by respondents 3, 5 and 6. They contended that the suit is barred by limitation. They

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denied the execution of the promissory note. According to them even if the Bank is entitled to recover the amount, defendants 1, 2 and 4 alone are liable.

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Court below raised the necessary issues for

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consideration. Before the court below P.W.1 was examined and

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Exts.A1 to A10 marked on the side of the plaintiffs. Defendants examined D.W.1 and had Ext.B1 marked. On an appreciation of the evidence, the court below found that money was due from the defendants and accordingly decreed the suit directing defendants to pay a sum of Rs.6,38,194/- with future interest at the rate of

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R.F.A. 387/2009.

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19.38% per annum from the date of suit till realisation. In case the amount was not paid, the Bank was given liberty to proceed against the property mortgaged to them. The said judgment and decree are assailed in this appeal.

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When the matter was taken up for hearing, learned counsel appearing for the appellants pointed out that the appellants are aggrieved by the rate of future interest awarded by the court below. It was pointed out that it is an exorbitant rate and by no stretch of imagination such interest could be levied from the appellants.

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Learned counsel appearing for the respondent Bank pointed out that that was the contract rate of interest and the court below has not committed any mistake in awarding the interest.

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May be that the contract rate of interest is 19.38%.

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But the fact remains that the properties are mortgaged to the Bank and that the amount availed of initially was only Rs.3,50,000/-. The grievance of the appellants that the future interest awarded is

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R.F.A. 387/2009.

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exorbitant and excessive appears to be fully justified. Considering the various aspects, the future interest awarded at 19.38% per

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annum from the date of suit till realisation is set aside and instead the Bank is given a decree for an amount of Rs.6,38,194/- with future interest at 12% per annum from the date of suit till the date of decree and at 10% per annum from the date of decree till realisation of the amount. Rest of the decree of the court below shall stand. There will be no order as to costs.

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P.R. Raman, Judge

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P. Bhavadasan, Judge

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sb.

K.K.Davis v. Federal Bank Ltd., Kalady

Case brief

What is this about?

What did the court decide?

K.K.Davis v. Federal Bank Ltd., Kalady

Case brief

What is this about?

What did the court decide?

What the court decided

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