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1993 (3) TMI 369
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....tween a Banking Company and its debtors. 3. On behalf of the Banking Companies, it was contended that after coming into force of Section 21-A of the Banking Regulation Act, 1949 (for short 'Regulation Act, 1949') Courts are prohibited/debarred from reopening the transactions entered into between the Banking Company and its debtor invoking the provisions of Usurious Loans Act, 1918 (for short 'Act 10 of 1918') irrespective of the fact whether the transaction was entered into prior to the coming into force of Section 21-A of the Act. It is also contended that Section 21-A will be applicable to a suit filed prior to the coming into force' of the said provision and pending on the said date, as well as to a suit filed subsequent to the coming into force of Section 21-A of the Act. In other words, it was contended that irrespective of the fact that the transaction took place earlier to the coming into force of Section 21-A of the Act and whether the suit in respect of the said transaction is filed prior to the said date or not, the said provision will debar or prohibit the Court from reopening the transaction and scaling down the interest by applying the provisions....
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....ich culminated in the reference to the Full Bench to have a better appreciation of the points involved. 7. A Division Bench of this Court consisting of P.A. Choudary and P. Kodanda-ramayya JJ. in Indian Bank, Alamuru v. M. Krishnamurthy, AIR 1983 Ap 347, held that the provisions of Madras Agriculturists Debt Relief Act (Act IV of 1938) are applicable to the transactions entered into between a Banking Company and it's agriculturists-debtors and the debtors are entitled to have the transactions reopened by the Court and the interest seated down as per the provisions of the said Act. Learned Judges held that Banking Companies will not come within the exemption enumerated in Section 4(e) of Act IV of 1938 as they are not Corporations formed pursuant to Act of Parliament of the United Kingdom or any special Indian Law. Subsequently, Section 21-A of the Act was amended by Amending Act 1 of 1984 and it came into force with effect from 15-2-1984. 8. While so, in another case M. Satyanarayana v. Andhra Bank Ltd., Eluru, AIR 1985 AP 77 question arose regarding the applicability of provisions of Act IV of 1938 to similar transactions. In the said case, on behalf of the banking compa....
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....longer good law. 10. Constitutional validity of Sec. 21-A of the Regulation Act, 1949 as inserted by Amending Act 1 of 1984 was already upheld by a Division Bench of this Court in Andhra Bank's case (1986 (2) APLJ (HC) 165) (supra). The said question was also referred to by another Division Bench of this Court consisting of B. P. Jeevan Reddy and K. Amareswari, JJ. in Yogendranath Raj v. State Bank,of India, (1987) 1 ALT 316. The learned Judges after referring to the Judgment of the Division Bench of this Court referred to supra (1986 (2) APLJ (HC) 165) observed as follows in para 17:-- Constitutional validity of Section 21-A is, therefore, not in issue before us Indeed, in our opinion, the competency of the Parliament to enact the said provision could never have been in doubt. 11. No arguments are advanced before us also with regard to the constitutional validity of Section 21-A of the Banking Regulation Act, 1949. 12. Now we proceed to deal with the points referred to us. 13. Sri V.L.N.G.K. Murthy, learned counsel appearing for the appellant in S.A. No. 268 of 1985 led the arguments on behalf of the nationalised banks which were adopted and supplemented b....
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.... contended that statutes are prospective and not retrospective unless retrospectivity is given to the provisions expressly or by necessary intendment. There is neither express provision giving retrospectivity to Section 21-A of the Act nor there is anything to necessarily imply retrospectivity. They contended that a vested right accrued or acquired by the debtors to claim the relief under the provisions of Usurious Loans Act, 1918 on the date of the transaction or at any rate on the date of filing of the suit, which are anterior to coming into force of the said provision i.e., 15-2-1984 and the same cannot be defeated by Section 21-A which came into force during the pendency of the suit or in some cases after the disposal of the suit. The contention is that Act 10 of 1918 not only gives power to the Court to re-open a transaction, but also creates corresponding rights and obligations on the parties and therefore, a decree passed in the suit prior to the enactment of Section 21-A will not be affected notwithstanding the pendency of an appeal against the said decree. 17. To appreciate the rival contentions, it is necessary to refer to the well settled principles of construction of....
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....bility in respect of any excessive interest, and if anything has been paid or allowed in account in respect of such liability, order the creditor to repay any sum which it considers to be repayable in respect thereof; (iii) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the creditor has parted with the security, order him to indemnify the debtor in such manner and to such extent as it may deem just: Provided that, in the exercise of these powers, the Court shall not- (i) reopen any agreement purporting to close previous dealings and to create a new obligation which has been entered into by the parties or any persons from whom they claim at a date more than twelve years from the date of the transaction; (ii) do anything which affects any decree of a Court. Explanation (i): If the interest is excessive, the Court shall presume that the transaction was substantially unfair; but such presumption may be rebutted by proof of special circumstances, justifying the rate of interest. Explanation (ii): In the case of a suit brought on a series of t....
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....lieve the debtor of all liability in respect of any excessive interest or if the debtor paid more than the amount required to be paid and then order the creditor to repay the sum which it considers to be repayable in respect of the said transaction. However, there is an important aspect referred to in explanation (i) to Section 3, viz., that though a presumption is raised that the transaction is substantially unfair between the parties thereto, it is made a rebuttable presumption. Therefore, the creditor can rebut the presumption that the transaction was substantially unfair, by proof of special circumstances justifying the rate of interest. Having regard to the above, the scheme of the above mentioned provisions of Act 10 of 1918 is that in the case of loans to agriculturists if compound interest is charged, the Court shall presume that the interest is excessive and if it is excessive, the transaction is presumed to be substantially unfair. However, the presumption is rebuttable one which requires the creditor to prove special circumstances justifying the rate of interest. If he is able to rebut the presumption, the question of exercising the power of reopening the transaction by ....
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....e above decision with approval. In fact, in Girwar Prasad v. Ganeshlal Saraogi, it was held that the circumstances under which the appellant therein borrowed monies from the creditor, the availability of credit facilities and possibility of borrowing on easier terms in that part of the country where the transactions took place etc., are relevant considerations to come to the conclusion to find out as to whether the transaction is substantially unfair. It is open to the creditor to adduce evidence on those aspects and satisfy the court that the interest charged in a given case is not excessive and thereby rebut the presumption raised by explanation (i) to Section 3. 23. In General and Credit Corporation (India) Ltd. v. Venkata Rama Rao, AIR 1959 AP 433 , the learned Judges stated that the relevant consideration to rebut the presumption that the interest is excessive is to adduce evidence regarding the prevailing rates of interest in the locality/town and the availability of credit facilities and the advantage gained by the debtor and any other special circumstances to rebut the presumption raised by explanation (i) to Section 3. Further, it is pertinent to notice, at this stage, ....
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....1) 2 All ER 721. In the said case, the facts are as follows: -- One 'K' held a lease from the Crown in respect of certain premises which expired in December, 1951. There were tenants and subtenants of the premises. On the application for renewal of the lease, an agreement was entered into in June, 1955 between 'K' and Director of Public Works, according to which, 'K' was to develop the site by erecting buildings thereon within a certain time. If that is done, 'K' was to have a new lease or leases on terms which, effectively, would give him a period of seventy-five years from December, 1951. The erection of the new buildings obviously necessitated the demolition of the then existing buildings. The said existing buildings were subject to the Hong Kong Landlord and Tenant Ordinance. As per the terms of the said Ordinance, when a Crown lessee wanted to demolish the existing building, he could only recover the vacant possession of the premises after the Director of Public Works issues a rebuilding certificate. The Director of Public Works gave notice of his intention to grant rebuilding certificate and the lessee served notices in the prescribed ....
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....under the Ordinance prior to the repeal, and that right survived the repeal, and the lessee is entitled to have his application for rebuilding certificate determined in accordance with the provisions as they stood prior to repeat and entitled to have vacant possession of the whole of the premises. On the other hand, it was contended on behalf of the tenants and sub-tenants who were in possession, that the agreement was merely an agreement for lease and not for disposition of land. Until and unless the lessee had established the right to specific performance, he cannot claim that by virtue of the agreement a right was accrued to him etc. 27. While dealing with the said contention, the learned Judges stated as follows:-- In their Lordships' view, such an approach is not warranted by the facts. On April 9 the lessee had no right. He had no more than a hope that the Governor in Council would give a favourable decision. So the first submission fails. Again the learned Judges stated as follows : In their Lordships' view, the entitlement of the lessee in the period prior to April 9 to have the petitions and cross-petition considered was not such a "right". ....
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.... provisions of Act 10 of 1918, Section 21-A comes into action and bars the Court from giving such relief. In elaboration of the above, it is contended that even though the loan transaction took place prior to the coming into force of Section 21A and in respect of which the suit was filed earlier or subsequent to the coining into force of the said provision or whether the suit instituted was pending in the trial Court, appellate Court or second appellate Court by the time the provision came into force, the jurisdiction of the Court to give relief under Act 10 of 1918 is ousted. As and when the matter is brought before the Court, the Court is debarred from giving relief. The learned counsel strongly relied upon the language of S. 21-A of the Regulation Act, 1949. 30. It is necessary in this connection to refer to the said provision which is as under : 21-A. Rates of interest charged by banking companies not to be subject to scrutiny by Courts .-- Notwithstanding anything contained in the Usurious Loans Act, 1918 (10 of 1918), or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be reopened by any....
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.... Punjab Pre-emption (Repeal) Act 1973, no Court shall pass a decree in any suit for pre-emption. 32. While dealing with the said contention, the learned Judges held that an appeal is a re-hearing of a suit and if a decree is passed in the appeal, it would be a decree in the suit for pre-emption and the prohibition contained in S. 3 applies to every stage of the suit. 33. The above decision clearly indicate that irrespective of the fact whether a suit was filed and a decree was passed and appeal or second appeal is pending in the Courts, whatever is applicable to a suit is equally applicable even to an appeal or second appeal as they are nothing but stages in the suit and any decree that is passed in the appeal or second appeal will be a decree in the suit. On that ground, the learned Judges upheld the dismissal of the suit by the High Court at the second appellate stage by applying the bar contained in S. 3 of the Punjab Pre-emption (Repeal) Act, 1973. 34. The learned Judges also put it on another ground, viz., that in moulding the relief to be granted in a case on appeal, the Court of appeal is entitled to take into account even facts and events which have come into exist....
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....missed the suit for eviction. 37. The learned Judges of the Supreme Court affirmed the same holding that the word "decree" occurring in sub-section (1) of S. 13 of the Act refers to "decree which dispose of the suit finally." It was held that when a decree passed by the trial Court is challenged in appeal, the appeal is considered as a continuation of the suit and when the appellate Court affirms, modifies or reverses the decree on the merits, the trial Court's decree merges in the appellate decree and it is only the appellate Court's decree which rules. Further, the learned Judges, while dealing with the argument that a decree was already passed in a suit instituted by the time the Tenancy Act was made applicable to the concerned area and, therefore, the prohibition contained in sub-section (1) of S. 13 will not apply, stated as follows: 8. The next point is whether sub-section (1) of S. 13 can be invoked where the suit was instituted before the Act came into force. In the instant case, the suit was instituted long before the Act was extended to Memari. Sub-s. (1) of S. 13 directs the Court not to make any order or decree for possession subject, of course, to t....
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....t even though a decree was passed earlier to the coming into force of the provisions, the learned Judges clearly held that the provisions which came into force subsequently can be applied to the appeal filed against the said decree which was anterior to the coming into force of the provisions. 38. Sri Murthy, learned counsel in support of his contention, next relied upon the case in Darshan Singh v. Ram Pal Singh, AIR 1991 SC 1654 . The question that arose in the said case before the learned Judges of the Supreme Court was whether the Punjab Custom (Power to Contest) Amendment Act, 1973 (Act 7 of 1973) which came into force on 23-1-1973 would or would not apply to the pending proceedings. In fact, in this case, suits were filed earlier to the coming into force of the Act and they were pending in appeals in different appellate stages. Section 7 of the Amending Act 7 of 1973 is as follows (para 14 of AIR): Alienation of non-ancestral property :--Notwithstanding anything to the contrary contained in S. 5, Punjab Laws Act, 1872, no person shall contest any alienation of non-ancestral immovable property or any appointment of an heir to such property on the ground that such a....
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..... While so stating, the learned Judges held that S. 7 of the Principal Act as amended by Amending Act 7 of 1973 is retroactive and is applicable to pending proceedings, whether in suit, appeal or even at further appellate stage. 39. Mr. Murthy, learned counsel also relied upon a judgment of the Supreme Court in Garikapati v. Subbiah Choudhary, [1957] 1 SCR 488 for the proposition that the suit, appeal and second appeal etc., are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. Therefore, it is contended that whatever may be the stage at which the suit is pending, whether at the stage of suit, appeal or second appeal etc., when once the Court is prohibited from re-opening any transaction on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive, the Court cannot re-open the transaction. It is significant to note that the prohibition contained in the said section for re-opening the transaction is in respect of "any Court". That means, whether it is a trial Court, appellate Court or any Court for that matter, the Court is injuncted from re-openi....
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....ing companies that the injunction/prohibition or the bar directed by S.21-A to any Court comes into play irrespective of the fact that the transaction between the banking company and its debtor is prior to the coming into force of S. 21-A of Regulation Act, 1949 is well founded. The bar will apply at all stages of the suit, viz., suit, appeal or second appeal etc., and to any Court, trial Court, appellate Court or second appellate Court until the suit is finally disposed of by a final Court of appeal, which decree alone is the decree in the suit. As the learned Judges of the Supreme Court put it, with great respect, in the decision referred to supra [1985] 2 SCR 202 , it is not a case where the provision is prospective or retrospective, but as and when the matter comes before the Court, whether in a suit, appeal or second appeal etc., so long as the proceeding is pending in any Court as on the date of coming into force of S. 21-A of Regulation Act, 1949, the prohibition automatically comes into play and the Court is bound to apply the same and refuse to re-open the transaction in view of the mandate contained in S. 21-A. 43. In this connection, it must be stated that the fact th....
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....his distinction was also drawn by the learned Judges of the Supreme Court in Darshan Singh's case AIR 1991 SC 1654 referred to supra on the ground that those cases were not dealing with a mandate given to a Court and whether the jurisdiction of the Court to give relief is divested. 45. To a similar effect is the judgment in Mithilesh Kumari v. Prem Behari Khare, [1989] 177 ITR 97(SC) relied upon by Mr. Murthy, tearned counsel for the banks. This case was dealing with the application of Benami Transactions (Prohibition) Act (45 of 1988). Section 4 of the said Act reads as follows: (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property. 46. A similar contention was raised to th....
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.... the provision. 48. It was next contended by the learned counsel appearing for the banks that the object of the Amending Act in respect of the above provision also will have to be taken into consideration in interpreting the statute. In this connection, it is contended that there were divergent views expressed by different Courts with regard to the applicability or otherwise of the Debt Laws of the respective States and the Usurious Loans Act to the transactions between the banking companies and its debtors. A Division Bench of this Court held that notwithstanding the directions of the Reserve Bank of India to the Banking Companies to charge interest on the loans given by them at certain rates, the Courts are empowered to give relief under the provisions of Act IV of 1938. This was the view expressed in Union Bank of India v. Dhanekula Koteswara Rao, (1979) 2 AWR 165 as well as by the Kerala High Court in State Bank of Travancore v. George, AIR 1975 Ker 169 while the Madras High Court held in Indian Bank, Tiruvannamalai v. V. A. Balasubramania Gurukal,: AIR 1982 Mad 296 that the provisions of the Banking Regulation Act, 1949, alone regulate the rate of interest on advances by na....
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.... of the States as well as under the provisions of Usurious Loans Act 10 of 1918. 51. The decision cited by the learned counsel appearing for the banks in Kamla Prasad Jadawal v. Punjab National Bank, New Delhi, AIR 1992 MP 45 ; Vijaya Bank v. Art. Trend Exports, (1990) 2 CALLT 55 (HC) and Syndicate Bank v. Kailashchandra, (1993) 76 Cc 392 (Bom) support their contention that Section 21-A overrides the provisions of Usurious Loans Act and the prohibition contained in the said provision applies even to the suits pending before the Courts in respect of the transactions entered into prior to the coming into force of Section 21-A. 52. In Kamla Prasad Jadawal's case AIR 1992 MP 45 (supra), the facts of the case are as follows: Respondent No.2 in the appeal before the High Court was advanced a loan of Rs. 10,750/- by the Punjab National Bank on 25-2-1972 for purchase of a Tempo. The appellant and the respondent No. 3 before the High Court were the guarantors. The rate of interest was 5% above the Reserve Bank of India rate with the minimum of 11% P.A. with quarterly rests. The Bank was forced to file the suit as the loan was not repaid. Suit was decreed granting compound inter....
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....ranted by the plaintiff-bank of October 16, 1978 for the purchase of weighing scales. Interest was charged with quarterly rests and a suit was filed for recovery of the amount with compound interest. Suit was resisted by the debtor on the ground that the plaintiff-bank cannot charge interest more than the rate permitted by the Usurious Loans Act. The trial Court accepted the said contention and stated that in view of the first proviso to Section 3(2)(a) of the Usurious Loans Act, 1918, the transaction is liable to be re-opened and the debtor is relieved of the excess rate of interest. Questioning the said judgment and decree of the trial Court, appeal was preferred to the High Court and it was admitted on October 14, 1983. During the pendency of the appeal, Section 21-A was inserted by the Amending Act 1 of 1984. It came into effect from 15-2-1984. At the time of hearing of the appeal, it was contended on behalf of the bank that in view of Section 21-A of the Regulation Act, 1949, the Courts are barred from re-opening the loan transaction. The Division Bench of the Bombay High Court after referring to the judgment of the Supreme Court in Amarjit Kaur's case [1975] 1 SCR 605 (su....
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....al. They have also taken certain other defences which are not relevant for the purpose of the present discussion. One of the issues framed was whether the rate of interest charged by the plaintiff is excessive or not and whether the defendants are entitled to the benefit of Hyderabad Agricultural Debtors' Relief Act, 1956. 58. The trial Judge held that the first defendant is not an agriculturist because horticulture will not come within the meaning of expression "Agriculture" and, therefore, not entitled to the benefits of Usurious Loans Act 10 of 1918 as amended by Usurious Loans (Madras Amendment) Act 8 of 1936. On the above finding, apart from others, the learned trial Judge decreed the suit as prayed for. Suit was instituted on 9-11-1974 and it was decreed on 19-8-1977 in favour of the plaintiff bank. Appeal was preferred to the High Court on 16-1-1978 and it came up before the Division Bench of this Court for hearing in March/April, 1986. As stated earlier, Section 21-A of the Regulation Act, 1949 was inserted by the Amending Act 1 of 1984 and came into force with effect from 15-2-1984. The learned Judges held, while reversing the judgment of the trial Court, that the a....
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....ess is mentioned in Section 9 and it is described as, unless otherwise expressly provided by the Act, all contracts, agreements and other instruments subsisting immediately before the appointed day to which the insurer whose business has vested was a party or which are in favour of such insurer shall "be of as full force and effect against or in favour of the Corporation, as the case may be, and may be enforced or acted upon as fully and effectually as if, instead of the insurer, the Corporation had been a party thereto or as if they had been entered into or issued in favour of the Corporation". It also provided that any suit, appeal or other legal proceeding pending by or against the insurer relating to his life insurance business, it will not be prejudicially affected by reason of the transfer to the Corporation of the business of the insurer but may be continued by or against the Corporation. 61. The defence was raised in the suit which was brought in the year 1961 by the debtor that he is an agriculturist and entitled to the benefits under Act IV of 1938 and contended that he is entitled to have the transaction reopened and the excess interest scaled down. The trial Court up....
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....case where any liability to have the debt scaled down under the provisions of Usurious Loans Act as amended by Usurious Loans (Madras Amendment) Act is taken over by any of the nationalised Banks. It is also not a case where the power of the Court to give relief is taken away by any provision as in the case on hand. 63. Having regard to what is stated above, we are of the opinion that the decision of the Division Bench in Yogendranath Raj case (1987 (1) Andh LT 316) (supra) referred to above does not reflect correct position in law. 64. The learned Judges of the Division Bench of this Court in Yogendranath Raj case (supra) also placed reliance on Workmen of F.T. & R. Co., v. The Management, (1973) ILLJ 278 SC . The said case in our opinion has no application to the present case. Section 11A of the Industrial Disputes Act was introduced by Amendment Act, 1971 and it came into force with effect from 15-12-1971. Question was whether it applies to an industrial dispute raised earlier to the coming into force of the Act, Learned Judges of the Supreme Court having noted that the proviso to Section 11A itself stated that it will apply "in any proceedings under this section", held th....
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....f the proceedings, the Court is bound to take note of the same and apply it to the pending proceedings and if necessary by moulding the relief in accordance with the changed law. (Vide Pasupuleti Venkateswarlu v. Motor & General Traders, [1975] 3 SCR 958 and Bai Dosabai v. Mathurdas, [1980] 3 SCR 762 . 67. Sri B. Adinarayana Rao, learned counsel next relied upon a judgment of the Supreme Court in Raja Gopala Rao v. Sitharamamma, [1965] 3 SCR 122 for the proposition that the right of illegitimate son of a Sudra for maintenance under old law was a vested right and the same could not be taken away by Act 78 of 1956, viz., Hindu Adoptions and Maintenance Act, 1956. It was held in this case that the children born to a Sudhra through his Brahmin concubine as well as the concubine were entitled under the old law to be maintained from his estate and that is a vested right and the same cannot be affected by Hindu Adoptions and Maintenance Act, 1956 (Act 78 of 1956). 68. Having regard to the above discussion wherein we have held that there is no right, muchless a vested right, accrued to the debtors for getting the relief under the Usurious Loans Act 10 of 1918, we are of the opinion t....
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....s higher at the time of taking the loan, in the case of secured loans, or 12 1/2% per annum simple interest in the case of unsecured loans etc. 71. Having regard to the applicability of the above mentioned provision to Delhi, Hazarilal claimed that the interest in excess of 7 1/2% cannot be awarded in the suit. The decree-holder opposed the application on the ground that the provisions of the Punjab Relief of Indebtedness Act cannot be made applicable to a case in which a decree had already been passed and appeal is pending at the time when the amendment was brought into force. However, the Division Bench felt that in view of the fact that the provisions of the Punjab Relief of Indebtedness Act had been extended to Delhi, it was required to apply those provisions even at the appellate stage. Therefore, the relief was granted. 72. The learned Judges of the Supreme Court clearly stated that the amended Section 3 of the Usurious Loans Act is plainly mandatory because it makes it obligatory for a Court to reopen a transaction if there is reason to believe that the interest is excessive. Further, when the rate of interest exceeds 1% per annum, the Court must hold that it is excess....
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....ers, the Court of trial as well as the Court of appeal must have regard to an intention so expressed, and the Court of appeal may give effect to such a law even after the judgment of the Court of first instance. The distinction between laws affecting procedure and those affecting vested rights does not matter when the Court is invited by law to take away from a successful plaintiff, what is has obtained under a judgment. These observations, having regard to what is stated by us in the foregoing paragraphs, clearly support the contention of the counsel appearing for the banks that the language of Section 21-A by necessary implication, even assuming any rights accrued under the provisions of Usurious Loans Act to the debtors, affected those rights also. 75. Sri T. S. Harnath, learned counsel appearing for the Union Bank of India in A.S. No. 1778 of 1984 brought to our notice that Section 34 of the Code of Civil Procedure was also amended by the Code of Civil Procedure (Amendment) Act, 1976 so as to enable the Courts to grant interest in pending proceedings, at the rates charged by the banks in respect of commercial transactions. According to the learned counsel, this indicates ....
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....advances made by commercial banks to its debtors. It may be that in the actual determination of the usurious nature of loan, the Court, may take into account the purpose of loan. But that is a different aspect. 77. For the reasons mentioned above, the judgment in Yogendranath's case (1987(1) Andh LT 316), referred to supra is overruled. Likewise, the judgment in Central Bank of India's case (1991 (1) Andh LT 455) referred to supra to the extent it stated that Section 21-A of Banking Regulation Act is only prospective and will not apply to suits instituted prior to 15-2-1985, is overruled. 78. The judgment of N.D. Patnaik, J. in the case referred to supra AIR 1992 AP 345 was only dealing with Sec. 4(e) of Act IV of 1938. The learned Judge held that the distinction drawn between the transactions entered into by the banking companies and its debtors and others is based on a rational criteria and it cannot be said that the distinction attracts the vice of Article 14 of the Constitution of India. The constitutional validity of Section 4(e ) of Act IV of 1938 in respect of the transactions entered into by a banking company and its debtor is not referred to us and it is not ....
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....ula Koteswara Rao (1979 (2) AWR 165) (supra), the learned trial Judge, while holding that the interest is excessive, applied the provisions of Act 10 of 1918 and decreed the suit granting only 9% compound interest by re-opening the transactions. Questioning the same, the plaintiff-bank filed A.S. No. 66 of 1980 on the file of the learned District Judge, Nalgonda. The said appeal was dismissed by the learned District Judge confirming the judgment of the trial Court. Questioning the said judgment and decree of the learned District Judge, this second appeal was filed by the plaintiff-bank in this Court. During pendency of this appeal, Section 21-A of Regulation Act, 1949 came into force. 85. Having regard to the opinion given by the Full Bench today, this second appeal is allowed and the judgments and decrees of the Courts below are set aside and the suit is decreed as prayed for, with interest at 12 1/2 % p.a. from the date of suit till realisation. But in the circumstances, no order as to costs. S.A. No. 832 of 1987: 86. In this case, suit was filed by the plaintiff-bank on 16-10-1982 for recovery of Rs. 18,075-45 p., being the amount due on account of agricultural loan giv....