1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO. 2088 OF 2008
1.Sanjay Hunduroa Warake
Age 34 yrs., Occ. Business,
Residing at 37, Nale Colony,
Kalaamba Road, Kolhapur.
2.Shri Murlidhar dattatraya Killedar,
Age 44 yrs., Occ.Agrigulture,
Residing at Majare Kasarwada,
Tal. Radhanagari,
Dist. Kolhapur.
3.Shri Hinduroa Marutroa Warake,
Age 60 Yrs., Occ. --do--
Residing at 37, Nale Colony,
Kallamba Road, Kolhapur
4.Anandroa Mahadev Warake,
Dead through his legal heirs,
4-A Smt.Bharati Anandroa Warake,
Age 55 yrs., Occ.Household,
Residing at Majare Kasarwada,
Tal. Radhanagari, Dist.Kolhapur
4-B Shri.Yuvaraj Anandroa Warake,
Age 35 yrs, Occ. Agriculture,
Residing at --do--
4-C Sou. Namrata Ajit Patil,
Age 35 yrs, Occ. Household,
Residing at --do--
4-D Rupali Anandroa Warake,
Age 25 yrs, Occ. Housework,
Residing at --do--
4-E Savita Anandroa Warake,
Age 23 yrs, Occ. Housework,
Residing at --do--
4-F Vidya Anandroa Warake,
Age 21 yrs, Occ. Housework,
Residing at do--
5.Shrimati Banubai Yashawant Warake,
::: Downloaded on - 09/06/2013 14:59:22 :::
2
Age 50 yrs, Occ. Household,
Residing at do-- ...Appellants
V/s.
The Ganesh Bank of Kurundwad Ltd.,
A Body Corporate constituted
under the Companies Act, 1913,
having it s head office at
Kurundwad and one of its
Branch Manager and constituted
power of Attorney holder
Shri Vijaykumar Bhanusaheb
Yadav, Age 43 yrs.
Occupation : Service,
Residing at 24 A,
Yashwant Colony,
Ichalkaranji,
Tal. Hatkanangale,
Dist. Kolhapur ...Respondent
....
Mr.Siddharth R.Karpe i/by Rupesh Nalavade, for the
appellantd.
Mr.P.M.Arjunwadkar,Advocate, for respondent no.1.
....
CORAM : J.H.BHATIA,J.
DATE : 8th September, 2009.
ORAL JUDGMENT :
1.With consent of the learned counsel for the
parties, the appeal is taken for final hearing
and disposal. The appellant has filed the
compilation of the oral and documentary
evidence.
2.The appeal is preferred against the judgment
and decree passed by the Vth Ad-hoc Additional
::: Downloaded on – 09/06/2013 14:59:22 :::
3
District Judge, Kolhapur for recovery of money
in Spl. Suit No.60 of 1999. It is a case of
the plaintiff-respondent that it is scheduled
bank and the defendant-appellant no.1 Sanjay
had taken the loan of Rs.3,00,000/- for
purchase of bulldozer. The amount of the
loans was to carry interest at the rate of Rs.
16% p.a. with
ig quarterly rests. In case of
failure to pay installments, the penal
interest of 1% could be charged. Defendant
nos.2 and 3 stood guarantors for repayment of
loan. Accordingly, defendant nos.1 to 3
executed the necessary documents in favour of
the bank on 25th April 1990. Defendant no.1 to
3 acknowledged the balance due on 7th January
1993 and again on 26th December 1995.
Defendant no.4 had also joined them in
acknowledging the liability. However, he died
pending the suit, therefore, his legal heirs
were brought on record. The suit was filed on
28th December 1998. It was contended that the
::: Downloaded on – 09/06/2013 14:59:22 :::
4
period of limitation on the basis of the last
acknowledgment had expired on 25th December
1998, when the Civil Court was closed due to
Winter vacation. Hence the suit was filed on
28th December 1998, that is the first day after
opening of the court after Winter Vacation and
therefore the suit was within the period of
limitation. At the time of filing of suit the
loan of Rs. 5,72,156/- was due from the
defendants. The charge was also crated on
certain agricultural properties bearing gut
nos.206, 249, 541 and 254 of village Kasarwada
belonging to defendant no.1. Defendant no.5
had purchased the land gut no. 206 from the
defendant no.1 in spite of the knowledge of
the charge on the said property.
3.Defendant no.1 contested the suit by filing
written statement. He denied to have made any
request for loan or to have executed any
document. He also contended that the suit is
barred by limitation. It was contended that
::: Downloaded on – 09/06/2013 14:59:22 :::
5
the plaintiff is a co-operative bank
registered under Maharashtra Cooperative
Societies Act and defendant no.1 is not a
shareholder of the plaintiff bank and
therefore without proper notice under section
164 of the Maharashtra Co-operative Society
Act, the suit could not be filed.
4.On the basis of the pleadings, several issues
are framed by the trial court at exhibit 16.
After hearing the parties, the trial court
held that defendant no.1 had taken the loan
and defendant nos.2 & 3 had guaranteed to
repay the same. The trial court also found
that the suit was within a period of
limitation. The trial court passed the decree
directing defendant no.1 to 3 to pay the
decretal amount of Rs.5,72,156/- jointly with
a future interest of Rs.16 p.a. from the date
of filing of suit till realization of the
amount. The said judgment and decree are
challenged in the present appeal.
::: Downloaded on – 09/06/2013 14:59:22 :::
6
5.Heard the learned counsel for the parties.
Following two points are pressed in the
present appeal. Firstly, as to whether the
suit was barred by limitation and secondly,
whether the future interest granted by the
trial court at the rate of Rs.16 p.a. is
justified.
6.The record reveals
ig that on behalf of the
plaintiff/appellant, two witnesses were
examined to prove all the documents and the
acknowledgments which were executed by
defendant nos.1 to 3 from time to time. The
witnesses were not even cross-examined on
behalf of defendants. Defendants did not
enter into witnesses box to depose on oath
that those documents were not executed by
them. In view of this, the trial court
rightly came to the conclusion that defendant
no.1 had taken loan of Rs.3,00,000/- for
purchasing bulldozer and defendant nos.2 & 3
had guaranteed the repayment of the loan.
::: Downloaded on – 09/06/2013 14:59:22 :::
7
Accordingly, they had executed necessary
document in favour of the plaintiff-bank. From
the facts and the evidence on record, it is
clear that the loan was taken on 25th April
1990 and the amount was to be repaid within
three years in quarterly installments of Rs.
60,000/-. The loan amount was to carry
interest at
ig the rate of 16% p.a. If the
installments were not paid on the stipulated
dates, the bank could charge penal interest of
1% p.a. The record reveals that defendant
nos.1 to 3 had acknowledged liability on 17th
April 1993 by executing letter of
acknowledgment of the of debts and dues. As
this acknowledgment was made before the expiry
of the three yeas from the date of loan, the
fresh period of limitation would begin to run
from 7th January 1993. Thereafter on 26th
December 1995, they executed letter of
acknowledgment of debts and dues. This
acknowledgment was also within the period of
::: Downloaded on – 09/06/2013 14:59:22 :::
8
three years, from earlier date of
acknowledgment and therefore, fresh period of
limitation would begin to run on 26th December
1995. The period of limitation came to and
end on 26th December 1998. The plaintiff-bank
has explained that on the last day of the
period of limitation, suit could not be filed
because, the Civil Court was closed due to
Winter Vacation and on opening of the Courts
after vacation immediately on 28th December
1998, suit was filed. Thus, it is clearly
within limitation.
7.Taking into consideration, the oral and
documentary evidence lead by the bank it is
difficult to find any fault in the findings of
that the trial court that defendant nos.1 to 3
were liable to repay the loan amount.
8.The next question is about the interest. The
trial court held that as per the agreement
between the parties, the interest was to be
paid @ 16% p.a. with quarterly rests and
::: Downloaded on – 09/06/2013 14:59:22 :::
9
accordingly, the amount claimed by the bank
was found to be Rs.5,72,156/- at the time of
filing the suit. Now that amount becomes
principal for the purpose of future interest
and therefore, the trial court has also
granted future interest at the rate of Rs.16%
p.a. on the decretal amount. The learned
counsel for the appellant contends that this
rate of interest is very heavy. Taking into
consideration, the rates of interest in the
market, judicial notice can be taken that in
the year 1994, when loan was advanced the
interest rates on deposits and loan were
really high and therefore it was fixed at the
rate of 16% p.a.. The rates of interests
continued to be high up to 1999. Thereafter,
from the year 2000 and particularly from the
year 2001, the rates of interest have
substantially come down. Prior to 2001, on the
fixed deposits the nationalized banks used to
give interest @ 10% to 11 % p.a., but now the
::: Downloaded on – 09/06/2013 14:59:22 :::
10
rates have come down to about 5% to 6% p.a. On
the National Savings Certificates the interest
used to be 12% p.a. but now it has come down
to about 8% p.a. It is material to note that
the loan was taken to purchase bulldozer as an
agricultural equipment. It is possible that
said bulldozer could not have been used by the
defendant-appellant
ig only for his own
agricultural works and possibly he was using
it for other business also but it appears that
the loan was advanced to purchase the
bulldozer as an agricultural equipment.
Anyhow, taking into consideration, overall
reduction in rates of interest on loan, in my
considered opinion, the future interest could
not be more than 10% per annum. Therefore, to
that extent, the appeal deserves to be
allowed.
9.For the aforesaid reasons, the appeal is
partly allowed only in respect of the future
interest and it is hereby directed that
::: Downloaded on – 09/06/2013 14:59:22 :::
11
defendant nos.1 to 3 shall jointly pay the
decretal amount of Rs.5,72,156/- with future
interest at the rate of Rs.10% p.a.from the
date of the institution of the suit till
realization of the amount. Remaining part of
the decree is confirmed. Parties shall bear
their own costs in the appeal.
(J.H.BHATIA,J.)
::: Downloaded on – 09/06/2013 14:59:22 :::