ENCORE ASSET RECONSTRUCTION CO PVT LTD vs MS VIVEKANANDA COFFEE COMPANY AND ORS on 29 December 2023

ORDER

1. This Appeal is against Order dated 30.05.2019 of DRT- II, Chennai, in OA 129/2012.

2. Brief facts leading to this Appeal are as follows:- Appellant herein filed above referred OA for recovery of Rs.1,43,61,174.11p with subsequent interest at 16.25% p.a. and another sum of Rs.40,38,587.30p with subsequent interest at 19% p.a. in respect of IND Mortgage Loan; totaling to Rs.1,83,99,761.41p from Defendants, jointly and severally. Second Defendant, without filing Written Statement, filed a Memo submitting to a Decree with a prayer to award interest at 6% p.a..

On a consideration of contentions and rival contentions and the evidence, Tribunal below allowed OA for total amount, but, granted subsequent interest at 7.5% p.a. (simple) from the date of OA till the date of realization. Aggrieved by the rate of interest, Appellant preferred the present Appeal.

3. Heard both sides.

4. Advocate for Appellant submitted that Tribunal below erroneously reduced the contractual rate of interest and fixed rate of interest at 7.5% p.a. (simple) and the same is liable to be set aside. On the other hand, Advocate for first Respondent submitted, contractual rate of interest is allowed till filing of OA, only pendentelite rate of interest is granted at 7.5% p.a. (simple), though the Defendant consented for 6% p.a. He submitted that as the Order is on reaching a compromise, it cannot be challenged in an Appeal.

5. I have perused the material papers including impugned Order dated 30.05.2019.

6. As rightly pointed out by Advocate for first Respondent, Tribunal below granted contractual rate of interest till filing of OA, only pendentelite rate of interest is reduced. It is not in dispute that granting pendentelite interest is purely the discretion of Tribunal, and only when such discretion is exercised arbitrarily, the same has to be interfered with. Here, in this case, though Defendant consented for subsequent interest at 6% p.a., Tribunal below did not accept it, and fixed at 7.5% (simple), recording 6% is too low. Therefore, Tribunal below exercised its discretion in awarding pendentelite rate of interest, which in my view, is exercised judiciously.

7. On a scrutiny of material, 2nd Defendant consented to a Decree only on condition of reducing the pendentelite interest. This aspect is not disputed and challenged by Appellant and allowed the Tribunal below to pass a Decree

on such admission. Therefore, now, it is not open to Appellant to challenge the same, particularly, when it is purely the discretion of Tribunal in respect of pendentelite interest.

8. For these reasons, I am of the view that, the Appeal is devoid of merits and there are no grounds to interfere with Order dated 30.05.2019 of DRT-II, Chennai.

9. In the result: Appeal in RA 140/2019 is dismissed with no order as to costs. All pending IAs, if any, stand closed. [Dictated to Athistamani, PS, transcribed by her, corrected, signed and pronounced by me in open court, this 29th of December, 2023] [Justice S. Ravi Kumar] CHAIRPERSON