I KRISHNAMMA Vs. SYNDICATE BANK MANIPAL

JUDGEMENT

(1.) THE petitioners are aggrieved by THE action of THE first respondent bank (referred as 'THE bank, hereinafter) in levying interest on THE deferred interest. The petitioners are borrowers from THE bank. They availed of THE loan facility provided for THE development of rubber. According to THEm THE rubber board launched a scheme known as rubber plantation development scheme, in order to increase THE production of natural rubber in India by accelerating new plantations on modern scientific lands. This scheme envisages concession in THE matter of interest and levy of interest. In fact THE rules for THE period 1985-89 provide for THE payment of THE loanee's share of interest from THE 8th year of planting and THE principal sum was to be paid from THE 10th year of planting. These petitioners obtained various loans and THE figures indicate that THEse are all small amounts range between Rs. 3,700/- and Rs. 37,000/-. They entered into agreements with THE banks in THE standard form. The years of THE agreements varies between THE year 1984 to 1986. According to THE petitioners THEy are not liable to pay compound interest. It is THEir case that THE bank has been levying compound interest on THE deferred interest. In oTHEr words THE accrued interest includes THE interest on THE yearly interest which gets accumulated and THE same shall have to be paid on THE due dates stated in THE agreement in question. The petitioners have pointed out that THE requisite finance comes from THE second respondent (hereinafter referred as 'nabard') and THE bank has to disburse THE amounts and collect THE same on repayment in terms of THE directions of THE nabard. The bank in its statement of objections questioned THE maintainability of THEse writ petitions. FurTHEr, THE bank also questioned THE binding nature of THE rules framed by THE rubber board, since THE rubber board has no control over THE bank. The bank furTHEr contends that THE interest on deferred interest could be collected even as per THE directions of nabard and that THE petitioner cannot take advantage of THE norms prescribed by THE nabard in respect of THE loans advanced after 1-7-1987. The loans advanced prior to THE said date could be burdened with THE interest on deferred interest also. The question, THErefore, is wheTHEr THEse writ petitions are maintainable and if so wheTHEr THE action of THE bank in levying interest on deferred interest is reasonable, fair and unarbitrary. In kumari srilekha vidyarthi etc., etc. V state of U.P. and oTHErs termination of THE appointment of THE government Advocate in THE state by a single order was challenged. Since THE post of a government counsel is a public office, THE appointment of a government counsel was held as not a mere professional engagement, and it was not purely contractual. Alternatively, it was also held that reasonableness of THE exercise of THE contractual power can be examined, under certain circumstances, while exercising THE writ jurisdiction. After referring to THE preamble, part iii and part iv of THE Constitution and THE object behind THEm, THE court observed in paras 21 and 22: