Bank Of Baroda Vs. Jagannath Pigment And Chemicals And Others On 21 September, 1994

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Bank Of Baroda v. Jagannath Pigment And Chemicals And Others

Bank Of Baroda
v.
Jagannath Pigment And Chemicals And Others

(Supreme Court Of India)

Civil Appeal No. 2785 Of 1987 | 21-09-1994

1. Intervention applications are dismissed

2. The appellant-bank had filed a suit to recover a sum of Rs. 1, 66, 759.29p with interest and costs. The suit was decreed for the said amount with proportionate cost. Future interest was awarded at the rate of 13 1/2 per cent per annum on the said amount of Rs. 1, 66, 759.29p from the date of the suit till payment or realisation. Against the said decree the borrower preferred an appeal, First Appeal No. 364 of 1986, in which one of the contentions raised was that the bank was not entitled to claim compound interest and convert the principal sum claimed as inclusive of interest and that the Court was not justified in granting future interest on the said principal sum-adjudged. The High Court accepted the contention and modified the decree in that it held that future interest should be calculated on the sum borrowed, viz., Rs. 1, 20, 675.59p and not the principal sum-adjudged i.e. Rs. 1, 66, 759.29p. Counsel for the appellant-bank states that this approach of the High Court runs counter to this Court's decision in Corporation Bank v. D. S. Gowda [(1994) 3 Scale 46] [LQ/SC/1994/573] . The respondents though served have not chosen to enter an appearance and contest this appeal

3. The premise on which the High Court based its impugned decision no longer holds the field in view of the decision in Corporation Bank. Therefore, the said decision of the High Court must be reversed and the decision of the trial court restored. The appeal is allowed accordingly with no order as to costs.

Advocates List

For

Bench List

HON'BLE JUSTICE A. M. AHMADI

HON'BLE JUSTICE R. M. SAHAI

Eq Citation

(1996) 112 (1) PLR 193

(1996) 5 SCC 280

LQ/SC/1994/903

HeadNote

A. Debt, Financial and Monetary Laws — Interest — Future interest — Calculation of — High Court modifying decree of trial court by holding that future interest should be calculated on sum borrowed and not on principal sum-adjudged — Validity — Held, premise on which High Court based its impugned decision no longer holds the field in view of decision in Corporation Bank, (1994) 3 Scale 46 — Decision of trial court restored — Hindu Law — Contract Act, 1872, S. 34 — Civil Procedure Code, 1908, Or. 43 R. 1 (Para 3)