ORDER
1. This appeal is against an order dated 9th September, 1999.
2. Briefly stated the facts are as follows:
On 3rd January, 1994 appellant Bank had instituted a suit for recovery of a sum of Rs. 5,55,761.71. Respondent No.4 is one of the partners. He had admitted the liability of the partnership firm and paid the entire suit amount of Rs.5,55,761.71. This amount was paid on 4th August, 1997. Thus after this date the plaintiff’s only claim, which was pending, was for pendente lite interest on the suit amount.
3. In the normal course as is happening today the suit would have been remained pending for the next 10 years. Defendant on his own makes an oral application that he would pay the simple interest @ 12% per annum. On 19th February, 1998 he was directed to deposit at rate of 12% per annum. It appears that respondent No.3 went to the plaintiff Bank to pay the amount. The plaintiff Bank refused to accept the amount.
4. Thereafter the suit was adjourned on number of occasions in order to enable the parties to settle the matter. However, no settlement was arrived at. Finally the suit reached hearing on 9th September, 1999. The learned Single Judge has exercised his discretion under Section 34 of the Civil Procedure Code. The learned Single Judge has held that the defendant has honestly paid up the principal amount and is willing to pay pendente lite interest @ 12% per annum. The learned Single Judge has thus accepted this offer and directed pendente lite interest @ 12% per annum from 3rd, Janu-ary, 1994 to 4th August, 1994 i.e. that date on which the principal amount has been deposited. If that amount was not paid then interest was to be @ 18% per annum.
5. Before us it is urged that the appellant Bank is entitled to the contractual rate of interest. It must be mentioned that contractual rate of interest is 18% compounded with quarterly rests. Reliance has been placed on case of Corporation Bank Vs. D.S. Gowda and Another, . In this case the Supreme Court was considering the provision of Sections 21A of the Banking Regulation Act, 1949. In that context Supreme Court has held that by virtue of this provision the Court cannot interfere with the contractual rate of
interest on the ground that the rate of interest charged is excessive or unreasonable. Relying on this it is urged that there was no discretion in the learned Single Judge to grant interest at any rate other than the contractual rate.
6. We are unable to accept the submission of the appellant. The case of Corporation Bank does not deal with Section 34 of the CPC which gives discretion to the Court to grant such rate of interest as the Court feels just and proper. The authority merely lays down that the Court cannot set aside the contractual rate on the ground that is is excessive or unreasonable. In this case the Court has not set aside contractual rate of interest on ground that it is excessive or unreasonable. The Court has exercised its discretion in respect of pendente lite interest considering the facts. The defendant has not used laws delays. The defendant has paid the entire principal amount with a reasonable rate of interest. It must be noted that now-a-days litigation takes a number of years. In most cases parties do not pay the dues of the Banks. They take up some defense or the other and use
laws delay. Ultimately in many cases the Banks are forced to settle at a lower rate or for a lower amount. Yet when a partly honestly pays up the amount with a reasonable rate of interest the Bank insists on its pounds of
flesh.
7. The Supreme Court in the case of N.M. Veerappa Vs. Canara Bank, has considered amongst other, the Corporation Bank’s case (supra). The Supreme Court has held that Section 21A of the Banking Regulation Act, 1949 does not over-
ride Central Legislation like the CPC. It has been held that the discretion of the Court to decide at what rate of pendente lite interest is to be granted has not been affected.
8. In our view, the order of the learned Single Judge is just, equitable and correct. it requires no interference at all.
9. It is next urged that the respondents have not been directed to pay cost to the appellant Bank. It is urged that there is no mention of costs and thus obviously there is n error. It is settled law that cost is a matter of discretion of Court. It is not a matter of right. The fact that the learned Single Judge has not mentioned about cost means that he has exercised the discretion against the appellant Bank. We see no reason to interfere in that behalf also.
10. It is admitted that the entire principal amount with interest @ 12 p.a. has been received. The appellant Bank is directed to return the title deeds within two weeks from today.
The appeal stands dismissed.
Let copy of this order be given Dasti.
11. Appeal dismissed.