STATE BANK OF INDIA Vs. K KOTAIAH NAIDU

JUDGEMENT

(1.) This is an appeal filed by the Plaintiff bank against the Judgment and decree made in O.S.No.160 of 1979 dated 12-12-1980 on the file of the Subordinate Judge, Nellore.

(2.) The State Bank of India, the appellant herein, filed a suit for recovery of amount on the basis of interest stipulated in the agreement that has been executed at the time of obtaining the loan. The interest that is being charged, admittedly is more than two and a half per cent than the rate fixed by the Reserve Bank of India. The Lower Court framed certain issues and issue No.1 reads as follows: "whether the amount claimed in the suit is correct."

(3.) The lower Court relying upon the Judgment in Union Bank of India vs. D. Koteswara Rao which has been extracted below has found that the interest that has been charged is usurious. It held as follows: