JAHURI YADAV Vs. BANK OF INDIA

JUDGEMENT

(1.) REFERENCE may be made to the order dated 4.3.98 which reads as follow : - ''Learned counsel for the petitioner submits that the petitioner is ready to pay dues of the Bank in instalment. Learned counsel for the Bank Mr. G. K. Agrawal, prays for time for filing counter affidavit, if any. Put up this case on the next appointed day under the same heading. ''

(2.) PURSUANT thereto a counter affidavit has been filed on behalf of the Bank stating, inter alia, in paragraph -10 that the outstanding dues till 18.11.96 was Rs. 1,35,873.65 which includes interest upto 23.9.93. It is further stated that the certificate proceeding was initiated after adding the interest upto 27.1.97 to the tune of Rs. 3,09,390.15. In the counter affidavit it has been mentioned the rate of interest charged on the principal amount advanced to the petitioner. Learned counsel for the petitioners submits that in the case of agricultural loan, the Bank - is not entitled to charge the compound interest and at best, the Bank can charge interest at the rate of 6.5%. In support of his contention learned counsel has relied upon a decision in the case of Corporation Bank vs. D.S. Gowda and anr. reported in 1994(5) S.C.C.213. The Apex Court in the aforesaid Judgment has held that in case of agricultural loan, the Bank is not entitled to charge compound interest. It has also been held that at best the interest can be charged at the rate of 6.5%. Accordingly relying upon the aforesaid decision I direct the Bank to issue a fresh demand upon the petitioners and the petitioner is directed to pay the entire dues including the interest calculated at the rate of 6.5% within three months from today. Till then the certificate proceeding be kept in abeyance. With the above observations/directions this writ application is disposed of.