N.L.Ganguly - (1.) THE petitioner challenges the recovery proceedings initiated at the instance of General Manager, District Industrial Centre, Budaun, particularly on the quantum of interest charged on the loan in question. THE petitioner placed provisions of section 2 (b) of the Indian Interest Act, 1978, which is quoted as under : "2 (b) Current rate of interest' means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949". He has further placed reliance on provisions of section 21 (a) of the Banking Regulation Act, 1949. After placing reliance on these provisions, he cited a decision of the Karanataka High Court, Bank of India v. Karmaam Ranga Rao, AIR 1986 Kant. 242. THE above decision shows that the bank cannot charge compound interest with quarterly intervals' rest on agricultural advances THE judgment sumps up by saying that; "Under the circulars/directives of the Reserve Bank the agricultural advances should not be treated on par with, the commercial loans in the matter of application of the system of compound interest. THE farmers do not have any regular source of income other than sale proceeds of their crops is an acknowledged fact. THEy get income generally once a year. THEy are. therefore, not in a position to pay interest at usual fixed intervals like monthly, quarterly and half yearly. Banks should not charge compound interest on current dues. Banks should not also charge interest with monthly, quarterly, or half yearly rests on overdue agricultural loans". By placing these provision and the decision, the learned counsel for the petitioner submitted that the respondents are charging compound interest which is in teeth of the aforesaid law illegal and as such the rate of interest charged is illegal and unwarranted It is well known that the Supreme Court of India in AIR 1985 SC 330 has deprecated the practice of interfering in matters of recovery proceedings under Article 226 of the Constitution of India This Court has been following the said decision but sometimes it deviates to give some breathing time for repayment of loans by the litigants in some easy instalments, according to the facts and circumstances of each case.
(2.) AFTER hearing the learned counsel for the parties, I am not inclined to interfere in the recovery proceedings in question which have been started in accordance with the provisions of the U. P. Z. A. and L R Act as arrears of land revenue. The aforesaid Act itself provides elaborate procedure for contesting the recovery proceedings under the Act. The remedy provided in the Act is by way of filing of a suit which is elaborate and efficacious remedy and the persons who challenge the quantum of loan or interest may seek proper and adequate remedy as provided in the said Act. It is not proper nor desirable for this court to enter into the factual controversy as submitted by the learned counsel for the petitioner. However, the learned counsel for the petitioner conceded that his client is willing to deposit the entire amount sought to be recovered under the proclamation/citation issued by the respondents in regard to the recovery. He however, seeks some indulgence and time for payment of the same. The learned counsel for the petitioner has stated as well as it is mentioned in the writ petition itself that no other writ petition in respect to the same amount of loan which is under challenge has been filed earlier in this Court on behalf of the petitioner. The learned counsel for the petitioner as well as the respondent agree to the disposal of the petition finally at the admission stage itself. In the facts and circumstances, I direct that the recovery proceedings involved in this petition shall be suspended provided the petitioner pays half of the entire amount, including the collection charges and the interest uptodate, within 2 months from today. The balance amount shall be deposited by the petitioner in the next 3 equal instalments payable on 30th June, 31st August and 31st October, 1992 successively. In case of default of any of the aforesaid conditions by the petitioner, the respondents shall be free to recover the amount in question according to law.
(3.) WITH these directions, the petition is disposed of Certified copy of this order may be issued on payment of usual charges within 48 hours.;