SYNDICATE BANK Vs. I KRISHNAMMA

JUDGEMENT

(1.) Writ Appeal Nos. 35 to 45 of 1994 arises out of a common judgment in Writ Petition Nos. 5869 to 5879 of 1993, Writ Appeal No. 1909 of 1994 is against the judgment in Writ Petition No. 15244 of 1994.

(2.) The writ petitioners in all these writ petitions are Small Rubber Growers who were advanced loans by the first respondent-Syndicate Bank under an agreement produced as Annexure-A in Writ Petition Nos. 5869 to 5879 of 1993. An agreement entered into by all the writ petitioners are of the same nature and they were executed between the year 1984 to 1986. The agreement provides for the payment schedule as also the time schedule for repayment under the agreement. There is gestation period of seven years for the payment of interest due on the first seven years. The question involved is as to whether under the agreement the writ petitioners are liable to pay simple interest on deferred interest or whether they are liable to pay compound interest on deferred interest.

(3.) According to the petitioners, as per the prayer in the writ petition they are liable to pay only simple interest on deferred interest though according to the Counsel for the petitioners at the argument stage it was submitted that they are not liable to pay interest at all. Anyhow, it is not necessary for us to go into that question at this stage. According to the first respondent-Bank petitioners are liable to pay the compound interest which is provided for in the agreement Annexure-A. Petitioners are also challenging the circular issued by N.A.B.A.R.D. evidence by Annexure-H which shows that interest is payable on deferred interest in case of loans advanced to Rubber Growers before 1-7-1987. On the basis of that first respondent-Bank has also sent a communication evidenced by Annexure-G to one of the petitioners stating that they are liable to pay interest on deferred interest as the loans are sanctioned prior to 1-7-1987. In these writ petition petitioners are challenging their liability to pay interest on deferred interest.