C.K. SASANKAN versus THE DHANALAKSHMI BANK LTD.

Citation: [2009] 3 S.C.R. 494 · Decided: 27-02-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Partly allowed

Judgment (excerpt)

[2009) 3 S.C.R. 494 
,~ 
A 
C.K. SASANKAN 
v. 
THE DHANALAKSHMI BANK LTD. 
(Civil Appeal No. 1317 of 2009) 
B 
FEBRUARY 27, 2009 
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
Code of Civil Procedure, 1908: s.34 - Scope and ambit 
of - Discussed - Interest - Grant of - Held: Has to be at a 
c reasonable rate and on the principal amount - On facts, grant 
of pendente lite and future interest @ 9% is just, proper and 
reasonable. 
The question which arose for consideration in the 
D present appeal is whether grant of interest @ 25% from 
the date of filing of suit till the date of judgment and @ 
19.4% thereafter till its realization was exorbitant and 
contrary to provisions of Section 34 CPC. 
Partly allowing the appeal, the court 
E 
HELD: 1.1. The appellant is entitled to quantum and 
rate of interest in accordance with the provisions of 
Section 34 CPC. According to the provisions of Section 
• 
34 CPC, interest is to be awarded at a reasonable rate and 
~ 
F on the principal amount. Although the amount of interest 
from the date of filing of the suit till the date of the decree 
and thereafter till realisation is in the discretion of the 
court as is confirmed by the use of the word 'may' but 
such discretion has to be exercised by the court properly, 
G reasonably and on sound legal principles and not 
arbitrarily and while doing so the court is also to consider 
the parameter, scope and ambit of Section 34 CPC. [Para 
8) (498-E, F] 
Clariant International Ltd. v. Securities & Exchange 
H 
494 
C.K. SASANKAN v. DHANALAKSHMI BANK LTD. 
495 
• 
- I 
Board of lnd[a, (2004) 8 SCC 524, Kaushnuma Begum v. New 
A 
India Assurance Co. Ltd. (2001) 2 SCC 9, H.S. Ahammed 
=' 
Hussain v. lrfan Ahammed (2002) 6 SCC 52 and United India 
Insurance Co. Ltd. v. Patricia Jean Mahajan (2002) 6 SCC 
281, relied on. 
1.2. Considering the facts and circumstances of the 
B 
case, the rate of interest as awarded for pendente lite and 
-"' 
future interest is exorbitant and thus pendente lite and 
future interest@ 9% is directed to be paid which is just, 
proper and reasonable. [Para 10) [499-F] 
c 
Case Law References: 
(2004) 8 sec 524 
relied on 
Para 9 
" .. 
(2001) 2 sec s 
relied on 
Para 9 
'I 
D 
(2002) s sec 52 
relied on 
Para 9 
(2002) s sec 281 
relied on 
Para 9 
' 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
1317 of 2009. 
E 
From the Judgment and Order dated 17.7.2008 of the High 
Court of Judicature at Madras in W.P. No. 28664 of 2003 . 
.. 
~ 
T.L.V. Iyer and Ramesh Babu M.R. for the Petitioner. 
F 
A.N. Tiwari and Balraj Dawan for the Respondents. 
The Judgment of the Court was delivered by 
DR. MUKUNDAKAM SHARMA, J. 1. Leave granted. 
2. This appeal arises out of the judgment and order dated 
G 
-t 
17.07.2008 passed by the Division Bench of the High Court of 
Judicature at Madras in Writ Petition (civil) No. 28664 of 2003 
dismissing the writ petitions filed by the appellant and 
confirming the judgment passed by the Debt Recovery 
H 
496 
SUPREME COURT REPORTS 
[2009] 3 S.C.R. 
A Appellate Tribunal, Chennai (hereinafter referred to as the 
'Appellate Tribunal'). 
3. The appellant is the son of late C.V. Kunjikuttan, who 
was carrying on business as a civil contractor. Said C.V. 
Kunjikuttan carried on business of contracts in his individual 
B capacity. He died on 8th September, 1989 and on his demise, 
the business was taken over by his legal heirs. While C.V. 
Kunjikuttan was alive he had availed of certain facilities from 
Dhanalakshmi Bank Ltd., Cherthala Branch, Alappuzha District 
- Respondent herein (for short the 'Bank'). The respondent is 
C a scheduled bank and has its principal place of business at 
Thrissur in Kerala and Branches in various other places. C.V. 
Kunjikuttan approached the respondent - bank in 1973 for 
sanction of an over draft financial facility. The Bank sanctioned 
him an overdraft facility of Rs. 3 lakh. The overdraft facility 
D allowed to C.V. Kunjikuttan was secured by security of 
immovable property, which was collateral security. On 
30.10.1980, the Bank granted an enhanced overdraft facility of 
Rs. 9 lakh which was secured by late C.V. Kunjikuttan and his 
children including the appellant herein. 
E 
4. As the said amount was not repaid the bank filed a suit 
being O.S. No. 176 of 1991 on the file of sub-court, Cherthala. 
Subsequently the proceedings were transferred to Debts 
Recovery Tribunal (for short "ORT") on its formation under the 
Recovery of Debts Due to Banks and

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