- (1.) In this writ application the petitioner has prayed for quashing the demand raised by the respondents vide letter dated 5-3-99 for a sum of Rs. 18,68,983.22 paise and further for a direction to the respondents to settle the accounts of the petitioner taking into consideration the interest payable at the rate of 10% p.a with rebate of 1% p.a. for timely payment and also to return the documents submitted by the petitioner.
(2.) Petitioner's case is that the respondents Bihar State Financial Corporation (in short 'the Corporation') sanctioned a sum of Rs. 5,20,000/- as loan in 1972 and out of the sanctioned amount a sum of Rs. 4.15 lacs was disbursed and an agreement to that effect was entered into by and between the petitioner and the Corporation whereby it was agreed, inter alia, that the loan amount will be repaid with interest at the rate of 10% p.a. with rebate of 1% p.a. for timely payment. A mortgage deed was also executed for payment of loan amount with interest at the aforesaid rate. Petitioner's further case is that it paid the instalments in time and on 19-10-84 the balance dues of Rs. 87,524.72 paise have also been paid as full and final payment. Petitioner's case is that as against the total amount of loan disbursed, that is, rupees 4.15 lacs the petitioner paid a sum of Rs. 8,86,400.41 paise. It is stated that in 1985 the Corporation vide letter dated 9-3-85 asked the petitioner to pay a sum of Rs. 21,225.94 paise. The petitioner immediately replied to the said letter stating that nothing is due and payable to the Corporation. Thereafter, several correspondences have been made between the Branch Manager and the higher officials of the Corporation and finally the impugned demand letter dated 5-3-99 was issued demanding Rs. 18,86,983.32 paise.
(3.) A counter affidavit has been filed by the Corporation stating, inter alia, that the rate of interest charged from the petitionerwas 9% allowing 1% rebate for timely payment as the petitioner was regular in payment of the dues but from 15-1-74 he became defaulter. It is stated that the system of charging interest was revised with effect from 27-2-74 in terms of lending rate i.e. 10% after 2% for timely payment but since the petitioner became defaulter, the respondent-Corporation started charging interest at the rate of 10% p.a. with 2% penal interest as per the prevailing norms of the Corporation. It is further stated that the demand raised by the Corporation showing the outstanding dues as on 28-2-99 is subject to revision as per circular No.1716 dated 12-9-97 which clearly states of charging current rate of interest after expiry of schedule of re-payment.;