PRABHAKAR NAIDU Vs. TIRUVALANGADU CO OPERATIVE PRIMARY AGRICULTURE AND RURAL DEVELOPMENT BANK LIMITED

JUDGEMENT

(1.) PETITIONERS in these writ petitions are agriculturists. They availed agricultural loan from the first respondent Co-operative Bank. According to Mr.N.V. Srinivasan, learned counsel for the petitioners, out of the total loan amount availed by the petitioners namely, Rs.2,12,000/- Rs.2,12,000/-, Rs.2,12,000/- Rs.1,87,000/-, Rs.1,71,500/-& Rs.1,05,000/- respectively, the petitioners have paid so far Rs.1,56,000/-, Rs.2,76,880/-, Rs. 2,56,500/-, Rs.2,21,950/-, Rs.2,47,769/- & Rs.80,000/-respectively. However, the first respondent has demanded a sum of Rs.2,66,332/-, Rs.1,99,556/-, Rs. 4,02,850/-, Rs. 2,78,191/-, Rs. 70,600/- & Rs. 32,000/- from the respective petitioners and also initiated recovery proceedings. Complaining that the first respondent is arbitrarily levying compound and penal interest on the amount due, placing reliance on the ratio laid down by the Apex Court in Central Bank of India V. Ravindra (AIR 2001 SC 3095), the petitioners seek a Writ of Mandamus declaring the action of the respondents in imposing penal interestand compounding of interest as illegal, null and void and to reconstruct the loan account by waiving compounding of interest and penal interest and to drop all further proceedings against the petitioners and direct the first respondent to comply with the directions issued by the RBI in agricultural loans and one time settlement of a Government of Tamil Nadu.

(2.) MR.N.V. Srinivasan, learned counsel for the petitioners also contends that the petitioners having already paid 25% of the dues and therefore, they are not liable to pay penal interest as per G.O.D. No.121. It is also complained that the respondent Bank is levying penal interest on day-today basis.