BASHISHTHA NARAIN THAKUR Vs. STATE OF BIHAR

JUDGEMENT

(1.) The Petitioners took a loan of Rs. 50,000/- from the State Bank of India for purchase of tractor and other appliances in January, 1979. The amount of loan was payable in ten instalments upto 1984. They paid in all Rs. 12,676/-. On August 13, 1986, the Branch Manager, Agriculture Development Branch, Parihar sent requisition in respect of sum of Rs. 95, 739.25 paise comprising of the dues on account of loan which had accumulated to Rs. 91,673.54 paise and the court fees of Rs. (sic) paise, under Section 5 of the Bihar Public Demands Recovery Act (in short, 'the Act') to the District Certificate Officer, Sitamarhi. On the basis of the said requisition, Certificate Case No. 46 of 1986-87 was registered. The Petitioners filed objection under Section 9 of the Act which was rejected as time barred on May 15, 1987. The matter dragged on, on one ground or the other, for a long time. Finally, in January, 1994, a bailable warrant of arrest was issued showing sum of Rs. 1,80,017.79 paise as outstanding. Petitioner No. 1 was arrested and committed to Sitamarhi jail on March 7, 1994. He was released after a sum of Rs. 35,000/- was deposited on March 11, 1994. The Certificate Officer directed the Petitioners to pay the balance amount in instalments failing which they would be taken in custody again.

(2.) The Petitioners do not dispute their liability to pay the principal amount of loan or even interest and the amount of cost. According to them, calculation of pendente lite interest at the rate of 18 per cent, which comes to Rs. 84.240/- out of Rs. 1,80,017.79 paise is contrary to the provisions of Section 17 of the Act. According to the counsel, the rate of interest chargeable during the pendency of the proceeding having been fixed at 12 per cent per annum under that section, the Certificate Officer has erred in law in charging interest at the rate stipulated in the agreement, namely, 18 per cent per annum. The question for consideration in this writ application is whether the liability to pay pendente lite interest is limited to 12 per cent, the rate mentioned in Section 17 of the Act or it may extend to the rate mentioned in the instrument.

(3.) Section 17 so far relevant to the question reads as follows: