THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 3419 of 1992 JUDGMENT: The plaintiff in O.S.No.117 of 1989 on the file of the Subordinate Judge, Nandyal, is the appellant herein. The suit was filed for recovery of a sum of Rs.93,238-05 ps. being the amount due on a loan account. The learned Subordinate Judge, Nandyal after considering the rival contentions decreed the suit, but, however granted the interest at 12.50% simple per annum instead of compound interest claimed by the plaintiff and also granted subsequent interest at the same rate. Aggrieved by the said judgment and decree dated 13.03.1992, the present appeal is filed. The point for consideration is whether the plaintiff is entitled for the compound interest as claimed? POINT: Evidently, in case of loan transactions from the bank under Section 21-A of the Banking Regulation Act, if there is a contract to pay compound interest in any nature of the loan, the Court has no power to reopen the transaction and the Court cannot be reduced. But the facts in this case are different where the contract between the parties clearly stipulates as per Clause-2 of the agreement, the plaintiff is entitled to claim only simple interest at 12.50%. When that being the contract between the parties, the question of applying the provisions under Section 21-A of the Banking Regulation Act does not arise. The lower Court has, therefore, rightly rejected the claim of the appellant and there are no merits in the appeal since the contract between the parties itself stipulates the simple interest and the regulations issued by the bank from time to time have no binding nature on the defendant. In the result, the Appeal Suit is dismissed. No costs. ________________________ N.R.L.NAGESWARA RAO, J DATE: 12-10-2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 3419 of 1992 DATE: 12-10-2011 MR