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Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL     LEAVE     TO     APPEAL     (CIVIL)     No.     1118     OF     2011   

Kerala Financial Corporation                  ..  

Petitioner

Versus

C. G. Narayanan ..  

Respondent

O     R     D     E     R   

1. Petitioner - Kerala Financial Corporation (for short  

“Corporation”) sanctioned a loan of Rs.2,65,000/- to the  

respondent and the order was communicated to the  

respondent by the Sanctioning Letter No. C1/646/2245/75  

dated 29.12.1975 (Annexure P/1).  Corporation submits as  

per Clause 31 of the Sanctioning letter, the Corporation has

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a right to make enhancement of rate of interest on loan from  

time to time.  According to the Corporation, the respondent  

committed default in making regular payment of the loan  

amount, consequently, the Corporation enhanced the rate of  

interest to 11.75% per annum.  Notice of enhancement of the  

rate of interest was also issued and served on the  

respondent.   

2.     Aggrieved by the said notice, respondent filed a suit  

being O.S. No. 479 of 1995 before the Munsif Court at  

Trichur, for an order of declaration that the respondent is  

liable to pay interest only at the rate of 5.5% per annum.  

Learned Munsif Court decreed the suit as prayed for.  

Corporation, aggrieved by the said judgment of the Munsif  

Court, preferred an appeal being A.S. No.123 of 1991 before  

the District Court and the District Court also dismissed the  

appeal.   

3. Aggrieved by the same, the Corporation preferred a  

second appeal being S.A. No. 869 of 1996 before the High  

Court, which was dismissed by the High Court.  The

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concurrent findings recorded by the courts below are under  

challenge in this special leave petition.

4. We notice that the Courts below, including the High  

Court, placed reliance on the judgment of the Kerala High  

Court in P.J. Mathew v. Kerala Financial Corporation  

(1989) 1 KLT 904, against the Corporation claiming the  

enhanced rate of interest, over and above 5.5% per annum.  

Courts below found that, on facts, the respondent is entitled  

to get the benefit of that judgment.   Judgment of the Kerala  

High Court in P.J. Mathew (supra) was challenged by the  

Corporation before this Court in SLP (C) No. 409/89.  That  

SLP was heard along with SLP No. 413/89 and was  

dismissed vide order dated 10.07.1989.    

 5. Under such circumstances, we find no reason to  

entertain this petition and the same stands dismissed.   

……………………………..J. (K.S.  

Radhakrishnan)    

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………………………………J. (Dipak Misra)

New Delhi, December 4, 2012