1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE Writ Petition No.7549 of 2004 W I T H Writ Petition No.7878 of 2004 The Sangli Bank Limited. .. .. Petitioner v/s. Ravindra Dhondhiram Shinde & ors. .. Respondents Mr.S.S . Patwardhan for petitioner. Mr.Dinesh Dubey for respondent Nos.1 to 3. ------ CORAM : SMT.RANJANA DESAI & SMT.ROSHAN DALVI, JJ. Dated : 8 th January 2008 P.C. : (Per Roshan Dalvi, J.) 1. In both the above petitions, the petitioner- bank has challenged the orders of the Debts Recovery Tribunal, Pune (DRT) as well as the Debts Recovery Appellate Tribunal, Pune (DRAT) dated 29.4.2002 and 28.7.2003, respectively with regard to the reduction in the rate of interest granted to the petitioner. 2. The challenge, therefore, is only with regard to the rate of interest. It is the petitioner's case that the respondents had agreed to pay interest at the rate of 17.5% per annum with 2 quarterly rests and at such rates as may be varied by and under the orders of the Reserve Bank of India from time to time. The petitioner further contends that the respondents also agreed to pay penal interest at the rate of 2% per annum. The respondents acknowledged the debt and confirmed the balances in their accounts on 27.1.1993 and 1.9.1995. The balances shown against the respondents and confirmed by the respondents showed the amount payable at higher rate of interest and penal interest. The petitioner, therefore, contends that by the acknowledgment and confirmation of such balances, the respondents agreed to pay interest at such varied rates. 3. It may be taken that in the initial documents executed by the respondents, the respondents may have agreed to pay varied rates of interest. But what precisely were the rates of interest, which were payable from time to time, have not been shown to be agreed to be paid by them except under the balances confirmed and acknowledged by them. 4. It is contended by the respondents that the interest sought to be charged by the petitioner was higher than the rate of interest chargeable as per the directions issued by the Reserve Bank of India from time to time. In case of such charge, notice of charging such rate of interest is required to 3 be given to the borrower. The petitioner, therefore, was required to communicate to the respondents what additional rate of interest was proposed to be charged and for which period against them. Aside from the two letters having been produced (which were shown not to have been acknowledged by the respondents), the petitioner has not shown how its charge of a higher rate of interest came to be communicated to the respondents. Consequently, the respondents cannot be taken to have acknowledged or confirmed to pay any higher rate of interest for any specified period unknown to them. 5. In the impugned judgments, the aspect of notice and communication of the higher rate of interest to the respondents has been considered. The specific periods for which the rate, higher than the initially agreed rate of 17.5% per annum with quarterly rests, which was charged, has been specifically set out. 6. The petitioner's Counsel drew our attention to the statement of accounts showing the periods of specified higher rates of interest set out in the impugned order of the DRT, Pune. It is contended that the impugned orders have disregarded the letters of acknowledgment of debt executed by the respondents on 27.1.1993 and 1.9.1995 within that period. 4 The petitioner's Counsel has shown us the acknowledgment signed by respondent Nos.1 and 2. The acknowledgments do not mention any specified rate of interest for any specified period. In fact, a letter of acknowledgment only shows the grant of the initial loan of Rs.6,64,000 /- and the sum payable at the time of the grant. It is unintelligible how the respondents can be taken to have notice that the amount shown to have been due and payable bore the higher rate of interest that is claimed by the petitioner. 7. Under the circumstances, we find that there is no merit in both the petitions. The petitioner has been granted interest at the rate of 17.5% per annum with quarterly rests as per the written agreement between the parties. Both the petitions stand dismissed. (SMT.RANJANA DESAI, J.) (SMT.ROSHAN DALVI, J.)