PUNJAB NATIONAL BANK, GHARAUNDA Vs. BHOLA RAM

JUDGEMENT

(1.) This order shall dispose of C.R. No. 5168 of 1999 and C.R. No. 5352 of 1999 directed against the orders passed by the Prescribed Authority on 09.11.1998 and 11.09.1998 respectively. By such orders, the Prescribed Authority has passed an order granting the principal amount due to the Bank, but restricted the future interest at 10% from the date of filing of the application.

(2.) The petitioner is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The petitioner in Civil Revision No. 5168 of 1999 granted term loan facility of Rs. 1,30,000/ - repayable in 18 half yearly installments with interest at the rate of 3.50% over the Reserve Bank of India rate with a minimum of 15.5% per annum. By way of collateral security, the respondents mortgaged their land vide mortgage deed dated 12.11.1992 and also executed Priority Sector Term Loan Agreement dated 13.11.1992.

(3.) Since there was default in making the payments of installments as agreed, the Petitioner filed an application before the Prescribed Authority under the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 (for short 'the Act'). The Prescribed Authority has allowed the application by granting benefit of principal amount claimed by the Bank, but future interest at the rate of 10% as against the contractual rate of interest i.e. 3.50% over the Reserve Bank of India rate with a minimum of 15.5% per annum. Since the petitioner was not granted contractual rate of interest, the Bank has challenged the aforesaid orders before this Court by way of the present revision petitions.