- (1.) Leave granted.
(2.) The learned Gujarat State Cooperative Tribunal; learned single judge of the High Court and the Division Bench of the High Court in Letters Patent Appeal has thought it proper to overturn the grant of compound interest in favour of the appellant Bank by the Board of Nominees and instead awarded simple interest at the rate of 14.5 per cent per annum. The basis for the aforesaid decision appears to be that there is no clause in the agreement between the parties providing for compound interest.
(3.) On the face of it, the aforesaid conclusion is erroneous in view of clause 5 of the agreement dated 18th May, 1995 by and between the parties. Clause 5 of the agreement dated 18th May, 1995 reads as under: "5. The interest on the sanctioned loan shall be calculated and charged every three months i.e. 30th September, 31st December, and 31st March and 30th June at the prevailing rate of interest at that time and every time such accrued interest shall be added to the principal amount and the penal interest at the rate of 2 per cent per annum shall be charged on the overdue installment, if any.";