JUDGMENT
H.W. Dhabe, J.
1. The principal question raised in the appeal is about the interest awarded by the learned trial Court to the plaintiff Bank.
2. The facts are that the plaintiff Bank had agreed to advance a loan of Rs. 34,000/- to the appellant-defendant against the security of gold ornaments required to be pledged by the appellant-defendant with the plaintiff Bank. For the purpose of availing the above loan facility, the defendant executed a demand promissory note for Rs. 34,000/- on 20-1-1981 in favour of the plaintiff Bank. The rate of interest stipulated in the said Promissory Note was 18.5 per cent per annum with quarterly rests, which according to the plaintiff Bank, was agreed to by the defendant. Since the defendant failed to pay the amount of interest on the loan advanced by the plaintiff Bank, the total outstanding loan including interest applied quarterly, amounted to Rs. 44,511.42 ps. calculated as on 21-10-1983. The plaintiff Bank, therefore, issued a letter by registered post A/d on 18-11-1983 requesting the defendant to pay the entire dues. The defendant executed a revival letter dated 20-1-1984 acknowledging the liability in respect of the above loan. It is the case of the plaintiff Bank that by reply dated 22-3-1984, the defendant expressed his inability to pay the dues in lump-sum and, therefore, requested the plaintiff Bank to grant him instalments and not to auction the gold ornaments. The plaintiff Bank was not ready to accept the amount in instalments; hence it served a notice by registered post through its Advocate, upon the defendant on 13-2-1985 requesting the defendant to pay all the outstanding dues against him to the plaintiff Bank. In reply sent through his Advocate, the defendant informed the learned Advocate of the plaintiff Bank that the defendant was ready to make the full payment of outstanding dues provided the plaintiff Bank was ready to return the gold ornaments to him immediately. In paragraph 3 of the said letter dated 22-2-1985 (Exh. 40), it is clearly stated that if no reply is received from the plaintiff Bank within 7 days of the said notice, the liability of the defendant to pay the interest on loan amount would come to an end.
2-A. It appears from the acknowledgment filed on record that the said reply of the defendant was received by the plaintiff Bank on 6-3-1985. However, the plaintiff Bank did not thereafter send any reply to the defendant or his Advocate, but immediately preferred the suit on or about 11-3-1985 for recovery of the amount of Rs. 56,886.78 ps., which was due on the date of the suit, including the principal amount as well as interest charged upto the date of the suit. The plaintiff Bank also claimed future interest from the date of the suit till realisation at the rate of 18 per cent per annum on the aforesaid principal amount. In default, the plaintiff Bank claimed that it should be allowed to sell gold ornaments mentioned in paragraph 9 of its notice and if still there remained any balance, liberty should be given to the plaintiff Bank to apply for a decree of the balance amount.
3. The defendant replied to the plaint allegations in the suit by filing his written statement. According to the defendant, it was a personal loan advanced to him against the pledge of the gold ornaments and that the compound interest charged more than 12 per cent per annum was excessive, particularly in view of the notification issued under section 3 of the Usurious Loans Act, 1980. The defendant has further stated in his written statement that since he was ready to pay the whole of the decretal amount subject to the condition that the plaintiff Bank should return the gold ornaments immediately, the instant suit filed by the plaintiff Bank was unnecessary and, therefore, the plaintiff Bank should not be granted any interest as well as costs of the suit.
4. The learned trial Court framed necessary issues on the basis of the pleadings of the parties. Parties led evidence in the suit. The learned trial Court, on the basis of the evidence on record, negatived the contentions raised on behalf of the defendant. He held that in view of the provisions of section 21-A of the Banking Regulation Act, 1949, the Banking transactions cannot be reopened to determine whether the interest charged by the Bank is excessive, and the provisions of the Usurious Loans Act or any State Law in this regard are not thus applicable to split up the banking transaction to determine whether the interest charged is excessive. As regards the nature of transaction in the instant case, he held that the plaintiff Bank had advanced loan to the defendant against the pledge of gold ornaments.
5. As regards the plea of the defendant that he was ready to make the payment of the whole of the decretal amount, even prior to the date of the suit and, therefore, the interest should not be charged to him, the learned trial Court held that mere words in this regard were not enough, but the defendant should have deposited the amount due against him with the plaintiff Bank or in the trial Court to avoid the liability of interest against him. Since he had not done so, the said plea raised by him was negatived.
6. The learned trial Court found that there was no dispute that the plaintiff Bank had advanced a loan of Rs. 34,000/- to the defendant against the security of gold ornaments which were pledged with the plaintiff Bank. Although it is disputed by the defendant that the rate of interest agreed to was 18.5% per annum with quarterly rests, the learned trial Court held that in view of the Promissory Note (Exh. 29) executed by the defendant in favour of the plaintiff in which the above rate of interest was stipulated, it was not open to him to urge that the interest agreed to by him was not 18.5% per annum.
7. It is in the light of the above finding that by allowing interest upto the date of suit upon the principal sum of Rs. 34,000/- the learned trial Court has decreed the claim of Rs. 58,886.78 ps. against the defendant with future interest at the rate of 18.5 per cent per annum from the date of suit, till realisation.
8. Feeling aggrieved, the defendant has preferred the instant appeal in this Court in which, as has already been pointed out, the challenge is mainly in regard to the interest awarded by the learned trial Court. As regards the interest charged by the plaintiff Bank at the rate of 18.5% per annum till the date of the suit, it is first urged on behalf of the defendant/appellant that the interest charged by the plaintiff Bank at the rate of 18.5% per annum with quarterly rests was very much excessive and that in view of the provisions of section 3 of the Usurious Loans Act which are applicable in the Vidarbha region and also the notification issued thereunder, it could not have charged the interest at the said rate of 18.5% per annum with quarterly rests. It is then urged that since the defendant was ready to make the payment of the whole loan amount advanced by the plaintiff Bank to him with interest as conveyed to it by his reply dated 22-2-1985 (Exh. 40) to its notice dated 13-2-1985 which offer was reiterated in the Written Statement filed in the instant suit, the plaintiff Bank is not entitled to charge any interest to him from the date one week after the receipt by it of his reply dated 22-2-1985.
9. As regards the first contention that the interest of 18.5% per annum with quarterly rests i.e. the compound interest charged by the plaintiff Bank is excessive in view of the provisions of the section 3 of the Usurious Loans Act and the Notification issued thereunder, it is clear that the said contention is not open to the defendant in view of the provisions of section 21-A of the Banking Regulation Act, 1949, which was inserted in the said Act by way of an amendment in 1984. The provisions of section 21-A of the Banking Regulation Act, 1949 have, in view of the non-obstante clause contained therein, an overriding effect over the provisions of the Usurious Loans Act or any State Law in regard to the question of reduction of rate of interest so far as the banking transactions are concerned. It is clearly provided in section 21-A of the aforesaid Act that a Bank transaction cannot be reopened, so as to determine whether the interest charged in the said transaction is excessive. The above contention raised on behalf of the defendant, therefore, cannot be accepted.
10. As regards the next question whether the defendant was not liable to pay any interest in view of his reply dated 22-2-1985 (Exh. 40) received by the Advocate for the plaintiff Bank on 6-3-1985 (See acknowledgment Exh. 41), the submission is that the plaintiff Bank ought to have informed the defendant within 7 days from the receipt of the said reply dated 22-2-1985 (Exh. 40) whether it was ready to return the gold ornaments to him immediately on payment of the whole of the loan amount with interest or not. Instead of doing so, the submission is that the plaintiff Bank rushed to the Court and filed the instant suit to recover the loan with interest from the defendant. The further submission is that even in the suit, the defendant had through his Written Statement shown his willingness to make the payment of the decretal amount provided the plaintiff Bank agreed to return the gold ornaments immediately on payment thereof, but there was no response to the same from the plaintiff Bank.
11. It is then urged before us that in this appeal also the defendant had shown his bonafides by making an application in this Court that he was ready to deposit the entire amount as decreed by the learned trial Court provided that the plaintiff Bank would return to him the gold ornaments pledged by him with it. This Court, by its order dated 8th August, 1990, permitted the defendant to deposit the entire decretal amount in the trial Court upon which it directed that the plaintiff Bank should return the pledged gold ornaments to the defendant. It, however, appears that there was some dispute between the parties regarding calculation of future interest and, therefore, by an order dated 18-1-1991 this Court directed that keeping it aside, the defendant should deposit in the trial Court the decretal amount with simple interest and on such deposit being made, the ornaments should be returned to the defendant within 8 days by the plaintiff Bank.
12. The learned Counsel appearing for the plaintiff Bank has stoutly opposed the above contention raised on behalf of the defendant. He has urged that there was no basis for any apprehension to the defendant that on payment of the loan amount with interest, the plaintiff Bank would not return the pledged gold ornaments to him immediately. He has further urged that in fact, the defendant did not want to pay such amount in lump sum for which reason he put such condition for making the payment. It is then urged that if the defendant really wanted to make the payment, then either he could have made the payment straightway to the Bank or could have deposited the amount with interest in the trial Court after the suit was filed by the plaintiff Bank which he had not done.
13. In appreciating the rival submissions, it has to be seen that it was open to the defendant to pay at any time the entire loan of the plaintiff Bank with interest in which case the plaintiff Bank was bound in law to return the pledged gold ornaments to him. At any rate, when the suit was filed, he could have made an application in the trial Court seeking its permission to deposit the entire decretal amount in the said Court and on such deposit being made to claim return of the pledged gold ornaments from the plaintiff Bank. It is pertinent to see that the defendant had an obligation to pay the loan with interest which he had agreed to pay before claiming return of pledged gold ornaments. Further, it is necessary to see that there are no circumstances brought on record to show how there could be reasonable apprehension in the mind of the defendant that even if he were to pay the whole of the amount of loan with interest, the plaintiff Bank would not still return the pledged gold ornaments to him. In fact, instead of writing to the plaintiff Bank that he was ready to pay the loan with interest provided the plaintiff Bank was ready to return the pledged gold ornaments he should have straight-way made payment of its loan with interest to the plaintiff Bank. At any rate, he could have deposited the entire loan amount with interest in the trial Court and sought an order from it for return of the pledged gold ornaments to him which he had sought to do for the first time in this appeal. It may be seen that if the defendant does not actually discharge his liability, it is he who is taking the risk of increasing his liability to pay interest. Merely because the plaintiff Bank did not reply to his conditional offer of making payment of loan with interest, it would not mean that no interest would be payable by him to the plaintiff Bank thereafter.
14. It may be emphasised that the only way for the defendant to avoid any further liability of interest and to claim return of the pledged gold ornaments was either to make the payment of the whole of the loan amount with interest till the date of payment to the plaintiff Bank or at any rate when the suit was filed after the receipt of the reply of the defendant dated 22-2-1985 (Exh. 40), to deposit in the trial Court the whole of the decretal amount with interest till the date of deposit, may be the amount what was due according to him. As was done by him in the appeal, he could have made an application in the trial Court seeking permission to deposit the entire amount in the trial Court with interest and claiming the return of the pledged gold ornaments from the plaintiff Bank, which he had not done. So long as there is no discharge of the liability by the defendant, he is not entitled to get back the gold ornaments. Further, so long as the liability is not discharged, he is liable to pay interest agreed to by him.
15. It is then material to see that the reply of the defendant dated 22-2-1985 (Exh. 40) was received by the Advocate of the plaintiff Bank on 6-3-1985 from which date one week’s time was granted by the defendant to let him know whether the Bank was ready to return the gold ornaments to him, which means that he should know about it on or before 13-3-1985. However, before the said date i.e. 13-3-1985, the suit is itself filed by the plaintiff Bank on 11-3-1985 which would mean that even according to the reply of the defendant dated 22-2-1985 (Exh. 40) the plaintiff Bank is entitled to charge interest at the contractual rate till the date of the suit, because it is only after 13-3-1985 that according to the reply of the defendant dated 22-2-1985, the defendant would not be liable to pay any interest. There is, therefore, no infirmity in charging the interest at the contractual rate from the date of the transaction till the date of the suit in the instant case.
16. If the interest could be charged at the rate of 18.5% per annum as agreed to between the parties, it was not in dispute that the decretal amount of Rs. 56,886.78 ps. is correctly calculated as the amount due on the date of suit including the principal sum as well as interest which is accrued thereon till the date of the suit.
17. The next question which arises for consideration is, whether the interest granted by the learned trial Court at the rate of 18.5% per annum from the date of suit till realisation is legal and justified, in the facts and circumstances of the instant case. As regards the question whether the defendant was liable to pay any interest from the date of the suit till realisation, because he had already shown willingness to pay the decretal amount as per his reply dated 22-2-1985 (Exh. 40) we have hereinbefore pointed out that mere words are not enough, but the defendant should have deposited the decretal amount in the trial Court and if he was worried about the return of the gold ornaments by the plaintiff Bank immediately thereafter, he should have made application for return of the gold ornaments as he had done in the instant appeal, and sought an appropriate order from the trial Court in that regard. Even if there was any dispute about the amount deposited by him raised by the plaintiff Bank subject to decision of that dispute, he could have sought an order for return of the pledged gold ornaments from the plaintiff Bank. Instead of merely making a conditional after, the actual deposit of the loan amount with interest which was due according to him to the plaintiff Bank would have established his bonafides more so as to pursuade the learned trial Court not to impose any future interest from the date of suit or actual deposit of the loan amount with interest, till realisation or at any rate to give him some relief in that regard. Since he had not done so, he is liable to pay the interest from the date of suit till the date he deposited the decretal amount in the trial Court as per the interim orders dated 8-8-1990 and 18-1-1991 passed by this Court.
18. Turning then to the question as to at what rate the future interest can be awarded by the learned trial Court from the date of suit till the date of deposit of the decretal amount in the trial Court, the said question has to be considered in the light of the provisions of section 34 of the Code of Civil Procedure, 1908 (for short, ‘the C.P.C.’). It is pertinent to see that the loan was advanced in the instant case after the amendment was made to the C.P.C. in 1976. As per the amended section 34 of the C.P.C., there is discretion conferred upon the trial Court to award reasonable interest upon the principal sum adjudged by it from the date of the suit till the date of the decree. However, as regards the interest to be awarded from the date of decree to the date of deposit or realisation of the decretal amount, a ceiling is put at 6 per cent per annum except in the case of a commercial transaction where the ceiling put is the contractual rate between the parties or in its absence the rate at which moneys are advanced in relation to commercial transactions by the nationalised banks.
19. It is pertinent to see that the Full Bench of this Court in the reference made to it in Suit No. 975 of 1988, Union Bank of India, Bombay v. Dalpat Gaurishankar Upadyay, by its judgment dated 2-4-1992 reported in 1992(3) Bom.C.R. 16 : 1992 Bank J. 605, held that the principal sum within the meaning of section 34 of the C.P.C. means the original sum lent to the debtor without addition of any interest whatsoever, simple or compound. In the instant case, it is not in dispute that the original sum lent to the defendant is Rs. 34,000/-. Therefore, as per the Full Bench judgment (cited supra), the future interest from the date of suit has to be awarded upon the above sum i.e. Rs. 34,000/- and not on Rs. 56,886.78 ps. as directed by the learned trial Court. Moreover as per the Full Bench Judgment (cited supra), the future interest has to be simple interest.
20. Before considering the question as to what rate of interest should be granted for a period from the date of the suit till the date of decree, we shall first deal with the question as to what rate of interest can be charged in the instant case from the date of decree till the date of deposit of the decretal amount in the trial Court. The learned Counsel for the defendant has urged before us that the loan advanced in this case was not for a commercial transaction and, therefore, the interest which could be awarded in the instant case to the plaintiff Bank from the date of decree till the date of deposit of the decretal amount in the trial Court could be 6% per annum only. The learned Counsel appearing for the plaintiff Bank has urged before us that the loan transaction was a commercial transaction and, therefore, the learned trial Court was right in awarding interest at the contractual rate of interest for the above period also.
21. In considering the question whether the transaction in the instant case is a commercial transaction or not, it is first necessary to see the allegations of the plaintiff Bank in paragraphs 2 and 3 of its plaint. Paragraph 2 of the plaint would show that the defendant was a partner of M/s. Dolphin Electrical Industries, which was enjoying certain credit facilities in the plaintiff Bank for which reason the defendant used to visit the branch in question of the plaintiff Bank in connection with the transactions of his Firm and, was therefore known to the officers of the plaintiff Bank as a partner of the said Firm. However, the material allegations as regards the loan transaction are in paragraph 3 in which it is stated that on or about 20th July, 1981, the defendant wanted personal loan against the pledge of gold ornaments belonging to him. There is thus no specific allegation in the plaint that the defendant was granted loan for a commercial purpose. Allegations in paragraph 2 are intended to show closeness of the defendant with the officers of the plaintiff Bank so that he can be advanced personal loan on pledge of gold ornaments.
22. The learned Counsel for the plaintiff Bank has brought to our notice the evidence of Shrikant (P.W. 1), the Branch Manager of the plaintiff Bank at Hingna. According to his evidence, since the partnership Firm of the defendant could not get additional facility of loan from the plaintiff Bank, he had advised the defendant to take personal loan, because of which the defendant applied for personal loan and was granted the same on pledge of his gold ornaments. In appreciating the above evidence of the Branch Manager of the plaintiff Bank Shrikant (P.W. 1), as rightly pointed out by the learned Counsel for the defendant, there is no basis for such evidence, as there are no allegations to that effect in the plaint. It is not stated in the plaint that since the Partnership Firm of the defendant could not get the loan facility from the plaintiff Bank, the defendant was advised to obtain personal loan on pledge of gold ornaments. Since there is no such material averment in the plaint, the defendant had no opportunity to meet the same. On the contrary, the averments in paragraphs 2 and 3 of the plaint led him to believe that even according to the plaintiff Bank a personal loan simplicitor was asked for and was granted to the defendant by the plaintiff Bank. Since such allegations are not made in the plaint, the above evidence adduced on behalf of the plaintiff Bank cannot be taken into consideration.
23. Perusal of the evidence of the defendant Vasant (P.W. 1) shows that, according to him, he was granted a personal loan of Rs. 34,000/- upon his offer to pledge his gold ornaments as security for the said amount. In view of the admission of the plaintiff Bank itself in its plaint that the loan granted to the defendant was a personal loan, the evidence contrary to such pleading of the plaintiff Bank was not admissible and could not have been taken into consideration. It has thus to be held that the loan transaction in the instant case was not a commercial transaction. If that is so, the rate of simple interest which could be charged for a period from the date of decree till the date of deposit of the decretal amount in the trial Court would be only 6% per annum and that too upon Rs. 34,000/- which is the principal sum adjudged within the meaning of section 34 of the C.P.C. in the light of the judgment of the Full Bench of this Court cited supra.
24. Taking up the last question about the award of interest from the date of the suit till the date of the decree, there is discretion conferred upon the trial Court under section 34 of the C.P.C. to grant reasonable interest for the said period upon the principal sum adjudged by it. The learned Counsel appearing for the plaintiff Bank has urged before us that even in awarding reasonable interest from the date of the suit till the date of the decree, the interest has to be granted at the contractual rate unless circumstances are brought on record by the defendant to show that in the facts of the case rate lower than the contractual rate of interest would be reasonable rate. In support, he has relied upon the judgment of the Gujarat High Court in the case of Union Bank of India v. M/s. Narendra Plastics, . He has also relied upon the judgment of the Calcutta High Court in the case of Vijaya Bank v. Art. Trend Exports, .
25. The Gujarat High Court in its judgment cited supra, while speaking about the basic principle underlying section 34 of the C.P.C., has observed that in commercial transactions, the contractual interest should be the rule and the departure, a rare exception because according to it, ordinarily the Court cannot and would not vary the terms of the contract arrived at between the parties. It has observed that rights and obligations arising out of the contract are required to be respected and enforced by the courts. According to it, the Court cannot and would not vary the terms of contract between the parties and impose a new contract upon them. The Gujarat High Court has, however, observed that the Court has discretion under section 34 of the C.P.C. to make departure from the aforesaid ordinary rule. But according to it, such cases would be only those in which it manifestly appears to the Court that the contract is unfair and unconscionable and its enforcement would be shocking to the conscience of the Court. Further, according to it, the parties seeking variation in the rate of interest agreed to be paid should show by cogent evidence that the rate of interest agreed to be paid is usurious, excessive or unreasonable. Unless this is shown, it is its view that it would not be just and proper for the Court to vary the terms of contract as regards the payment of interest and impose new contract upon the parties.
26. The Gujarat High Court in the judgment cited supra, has then pointed out that in cases where the amount advanced is to be recovered by the public financial institutions, if the courts were to determine the “reasonable” rate of interest, it would be extremely hazardous and may even lead to disastrous consequences. It observed that the task of managing the public money has been entrusted by the nation to the Bankers and not to the courts and, therefore, ordinarily it would not be proper for the courts to arrogate to themselves the task which is not assigned to them. It has then illustrated the disastrous consequences which, according to it can ensue. It appears from the facts of the case before the Gujarat High Court that it was dealing with the case of a commercial transaction.
27. Turning next to the judgment of the Calcutta High Court cited supra the Calcutta High Court has observed as regards payment of interest prior to the date of the suit that in view of section 21-A of the Banking Regulation Act, 1949, the Court has no discretion to ignore the contractual rate of interest, because a transaction between a banking company and its debtor cannot be reopened to determine whether the interest charged is excessive.
28. As regards the interest for the period from the date of the suit till the date of the decree, the Calcutta High Court in the judgment cited supra, has held that the question of interim interest for the said period is under section 34 of the C.P.C. entirely a matter of discretion of the Court which discretion extends not only to the question of the rate of interest to be granted, but also to the question whether any interest should be at all granted for the said period or not. It has, however, observed that in grating interim interest the discretion like any other discretionary power of the Court must be exercised judicially and upon sound principles. According to it, the exercise of such discretion must be fair and reasonable. It has then held that there cannot be laid down a hard and fast rule for exercise of such discretion which would depend upon the facts and circumstances of each case including the conduct of parties before and after the suit. The question what reasonable interest pendente lite should be granted has thus to be determined, according to it, in the facts of each case.
29. The Calcutta High Court in the judgment cited supra has, interpreting section 34 of the C.P.C., held that merely because there is an agreement between the parties as regards the rate of interest, the plaintiff/claimant is not entitled to claim interim interest at such agreed rate for the period subsequent to the date of the suit as a matter of right and the Court is not bound to grant such interest at such rate, even if it is mentioned in the agreement that interest is to be paid at the agreed rate till realisation.
30. The Calcutta High Court in the judgment cited supra has, however, observed that as a rule of caution the Court is not entitled to ignore such agreement totally merely because the interest pendente lite is a matter of its discretion. On the contrary, according to it, in the sound exercise of its discretion in this regard, it must not only take such agreement about interest into consideration but must normally adhere to it unless it would be inequitable to do so. Otherwise, it held that if a lesser interim interest was awarded in its discretion without there being any reason to show that the contractual rate of interest is inequitable, it would be unfair to a person who is diligently making payments as per the agreement since in the case of a person committing defaults in making payment when a suit is required to be filed against him he would be required to pay lesser interest by reason of the discretion exercised by the Court in his favour. It has then observed that the above question assumes special importance where the plaintiff is the Bank i.e. a public financial institution concerned with public money.
31. It is clear from the above judgments that although in exercise of discretion under section 34 of the C.P.C., the Court cannot totally ignore but should normally allow the contractual rate of interest for the period from the date of the suit till the date of the decree, it is not an invariable rule that the Court must do so in each and every case. If the facts of the case justify the departure from the said rule, then in the sound exercise of its discretion under section 34 of the C.P.C. the Court can allow interest at a rate lower than the contractual rate which it thinks would be reasonable either for the whole of the period or part of it and in appropriate cases if it so thinks, it may not grant any interest at all from the date of the suit till the date of the decree. We thus proceed to examine the question whether the facts of the instant case allow grant of lesser rate of interest for the above period.
32. In our view, in the facts and circumstances of the instant case, it is not open to the plaintiff Bank to claim the interest at the contractual rate from the date of the suit till the date of decree. In the first place, as held by us hereinbefore, it has to be seen that the loan granted to the defendant by the plaintiff Bank is a personal loan and, therefore, the transaction is not a commercial transaction. The said loan is secured completely by pledge of gold ornaments, belonging to the defendant. Secondly, although we have repelled the contention of the appellant/defendant that he is not entitled to pay any interest at all from the date of his reply (Exh. 40), because he had shown his willingness to pay the whole of the loan amount with interest provided the plaintiff Bank would communicate to him its willingness to return the gold ornaments pledged with it by him, it would not mean that such willingness shown by him in the said reply (Exh. 40) or in his written statement in the suit cannot be taken into consideration in considering the question of the rate of interest to be allowed to the plaintiff Bank from the date of the suit till the date of decree.
33. It is pertinent to see that the appellant/defendant made a conditional offer of payment of the decretal amount to the plaintiff Bank firstly in his reply (Exh. 40) and then in his Written Statement in the trial Court, because he had an aprehension that even after such payment the gold ornaments pledged by him with the plaintiff Bank would not be returned to him. Although it is true that the defendant had not actually deposited the decretal amount in the trial Court or paid it to the plaintiff Bank, the fact remains that inspite of clear averments in the reply (Exh. 40) and the written statement of the defendant, the plaintiff Bank did not choose to state that it was ready to return the gold ornaments pledged with it by him on deposit in the trial Court, or direct payment to it, of the decretal amount with interest. The above conduct of the plaintiff Bank does not thus show that it was willing for the early settlement of its claim against the defendant. Had it expressed its willingness to return the gold ornaments on deposit of the decretal amount with interest in the trial Court, the ball would have been in the defendant’s court and had he not still deposited the decretal amount with interest or paid to the plaintiff Bank as per his offer, the defendant would not have been entitled to claim a rate of interest lesser than the contractual rate pendente lite. On the other hand, the further conduct of the defendant shows that in this Court by making an application and by obtaining appropriate orders he had deposited the decretal amount in the trial Court.
34. Looking to the above facts and circumstances of the instant case, in our view in the sound exercise of discretion under section 34 of the C.P.C. in determining what the reasonable rate of interest should be, the ends of justice would require that the rate of interest should be 10 per cent per annum from the date of the suit till the date of decree. As we have already pointed out, so far as the rate of interest from the date of decree till the date of deposit or realisation is concerned, we have already held that it cannot be more than 6 per cent per annum as provided in section 34 of the C.P.C.
35. Pursuant to the interim orders dated 8-8-1990 and 18-1-1991 passed by this Court, the appellant defendant has already deposited an amount of Rs. 1,20,000/- in the trial Court towards the decretal amount and interest in the suit as per the decree of the learned trial Court which amount the plaintiff Bank has withdrawn. The learned Counsel for the appellant/defendant has urged before us that in view of the modification in the amount of interest made by us, the defendant/appellant is entitled to get refund of the excess amount which the Bank has already withdrawn. If it is so, in our view, it is open to the defendant/appellant to make an appropriate application for restitution under section 144 of the C.P.C. or any other provisions in this regard and take appropriate proceedings for necessary relief in regard to excess payment alleged to be made by him.
36. In the result, the instant appeal is partly allowed. The decree passed by the learned trial Court in the sum of Rs. 56,886.78 ps. is maintained. Its decree about future interest is, however, modified as follows :
As regards the future interest from the date of the suit till the date of decree, it is directed that the plaintiff is entitled to simple interest @ 10% per annum from the date of the suit till the date of decree upon the principal sum of Rs. 34,000/-. As regards the interest from the date of the decree of the learned trial Court till the date of the deposit of the decretal amount with interest as per the interim orders of this Court dated 8-1-1990 and 18-1-1991, it is directed that the plaintiff is entitled to recover simple interest for the said period at the rate of 6% per annum upon the principal sum of Rs. 34,000/-. The plaintiff shall be entitled to proportionate costs in the trial Court. Parties to bear their own costs in this appeal.