NDLI: N.m. Veerappa Vs. Canara Bank

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Code of Civil Procedure 1908 : S. 34 1949: 21-A Order 34 Rule 11 Banking Regulation Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Banking Regulation Act (10 of 1949) Code of Civil Procedure, 1908 (5 of 1908)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Code of Civil Procedure, 1908 :S. 34, Order 34 Rule 11-Suit based on mortgage-Future interest- Rate of-Held, special provision of Order 34 Rule 11 is applicable and not s. 34-Court 's discretion to fix rate of interest-Explained-Provisions of s. 21-A of Banking Regulation Act, 1949 do not effect Order 34 Rule 11- Banking Regulation Act, 1949-21-A. Banking Regulation Act, 1949 :21-A-Rates of interest charged by banking companies-Scrutiny by courts-Exclusion of-Held, ss. 21, 21-A and 35 do not affect Order 34 Rule 11 CPC-Act does not intend to override the Code of Civil Procedure-Discretionary power conferred on civil court under Order 34 Rule 11 CPC to cut down of suit and even upto date fixed for redemption is an independent power-Code of Civil Procedure, 1908-order 34 Rule 1 ]-Usurious Loan Act, 1918. The respondent-Bank filed a suit based on mortgage against a partnership firm and its partners for recovery of money loaned to them by the Bank. The trial court passed a preliminary mortgage decree, but directed the decree-holder Bank to file a fresh memo of calculation calculating the contractual interest at 16.5% per annum on the balance of principal amount due from the date of the equitable mortgage at yearly rests till date of suit. As regards the future interest, it was directed that the plaintiff was entitled to future interest at 6% per annum on the principal amount from date of suit till date of recovery of full amount. The Bank filed an appeal before the High Court, which held that by virtue of s.34 of the Code of Civil Procedure, 1908, the Bank was entitled to future interest also at the contractual rate of interest of 16.5% from date of suit till date of realisation. Aggrieved, defendant No. 2, the Managing Director of the firm filed the present appeal. It was contended for the appellant that the suit being based on mortgage, as regards Interest pendent lite, the provision applicable was Order 34, Rule 11 and not s.34 of the Code and, therefore, the court could exercise discretion to award a lesser rate of interest than the contractual rate. The contention of the respondent was that apart from S.34 of the Code being applicable, if contractual rate of interest for the period the suit remained pending was not applied, Bank's interest would be seriously prejudiced. It was also contended that s. 21-A of the Banking Regulation Act, 1949 would override Order 34 Rule 11 of the Code and, therefore, the court could not reopen the banking transaction nor could it reduce the contractual rate of interest.
Judge	Hon'ble Mr. Justice M. Jagannadha Rao
Neutral Citation	1998 INSC 41
Petitioner	N.m. Veerappa
Respondent	Canara Bank
SCR	[1998] 1 S.C.R. 342
Judgement Date	1998-01-27
Case Number	467

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