Shree Bharat Laxmi Wool Store And Others v. Punjab National Bank And Another

Gokal Chand Mital, J.:— After hearing the learned counsel for the parties in the aforesaid cross-appeals, I find that there is no merit in the appeal filed by M/s. Shree Bharat Lakshmi Wool Store Panipat (R. S.A No. 120 of 1982). The defendant admitted its liability in various letters which have been produced on the record. One of the main points which have been urged before me by Mr. Maluk Singh was that the mortgage by deposit of title deeds was created and therefore in view of the judgment of the Supreme Court in United Bank of India Ltd. v. Lekharam Sonaram AIR 1965 SC 1591., the document required registration and in the absence of registration, it could not be read in evidence. This matter would be covered reading of issues 5 and 6 together and the trial Court has recorded a definite finding that there was no document by which mortgage by deposit of title deeds was created. It was the defendant who wrote letters to the bank wanting to deposit the title deeds by way of security in pursuance of which the title deeds were deposited. The ratio of the aforesaid decision of the Supreme Court clearly shows that if the title deeds are deposited and no mortgage deed is written, then no registration is necessary. Accordingly I affirm the finding that no registration was necessary on the facts of the present case.

2. Comming to the other appeals filed by the Punjab National Bank Ltd., namely R.S.A No. 2039 of 1981, the only point urged before me is that the agreed rate of interest was 10½ per cent which was allowed by the trial Court, bat the lower Appellate Court modified the rate awarded by the trial Court and awarded the interest only at the rate of 6 per cent per annum. The grant of rate of interest should not have been interfered with by the lower Appellate Court. Moreover, in view of section 79 of the Negotiable Instruments Act and State Bank of India v. Kashmir Art Printing Press, Sirsa 1981 83 PLR 300., I am of the view that the Bank should have been allowed interest at contractual rate and not at the rate of 6 per cent per annum. This view is further supported by Code of Civil Procedure (Amendment) Act, 1976, wherein under section 34 it is provided that in case of commercial transactions, the contractual rate of interest should be allowed.

3. For the reasons recorded above, the second appeal filed by the Punjab National Bank is allowed and it is ordered that the interest payable on the decretal amount will be 10½ per cent per annum which is the contractual rate, of interest as ordered by the trial Court.

4. Both the appeals stand disposed off accordingly.

R.M.S

Order accordingly.