IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.15329 of 2007 SRI DHRUB SAHANI, son of Late-Indradeo Sahani, resident of village & P.O.-Baluawa, Police Station-Laukeria Tappa, Batesra Paraganah Majhauwa, District-West Champaran. …….Petitioner Versus 1. The State Bank Of India through the Zonal Manager, Muzaffarpur. 2. The Branch Manager, State Bank of India, Balmikinagar, West Champaran. ……..Respondents. ----------- 04. 02.02.2010 Petitioner wants direction upon the respondent State Bank of India to recalculate the so called agricultural loan taken by him way back in the year 1990. There were two kinds of loan, one was a term loan of Rs. 1,10,000/- for purchase of a tractor and the other was a cash credit loan of Rs. 10,000/-. The term loan interest was stated to be variable between 4% to 12.5% and the repayment was to be made in 18 half yearly installments. The first installment was to become due on 31.01.1991 and thereafter the installment fell due in every 31st of January and 1st of July. The stand of the petitioner is that repayments have been made, accounts settled but Bank has arbitrarily calculated a fanciful figure and shown them as outstanding dues on wrongful calculation of rate of interest. The interest calculated every half yearly are the interest at the rate beyond the permissible limit or agreement has been charged. All this according to the petitioner has been done 2 in the teeth of decision of the Hon’ble Supreme Court in the case of Corporation Bank versus D.S.Gowda & another reported in 1994(5) SCC 213. Emphasis specially has been placed at paragraph Nos. 23, 24 and 25 of the said decision. The stand of the respondent Bank, however is that the statement of account by itself speaks as to the actual state of affairs. After the loan was sanctioned, repayments have been very irregular and because of the said default in repayments the accounts were transferred to the protested bill ledger on 23.02.1998. On that date a sum of Rs. 1,28,623.95/- has been shown. Since the accounts never came to be settled, the necessary calculation of interest on the outstanding rest has been worked out and the said figure has been quoted by the Bank for repayment. The stand of the respondent Bank is that according to the internal circular of the State Bank of India, they are entitled to calculate interest half yearly and the rate of interest which has been charged is in terms of the agreement. The figure of 15.5% indicated in the ledger has been levied upon the petitioner due to non-payment for a long time. It is also contended that no compounding as such has been done in the case of account of the petitioner though in terms of the decision of the Hon’ble Supreme Court, on failure of agriculturist to pay back the amount when it is due may 3 intel in position of compound interest as well. Learned counsel for the petitioner, thereafter submits based on a document brought on record by the respondent bank which is an extract from the protest bill register. He wants to indicate from the entries that deposits have been made by the petitioner against the outstanding dues once by cash on 10th of December, 1998 amounting to Rs. 50,000/- besides other payment earlier and there is yet another payment by transfer that is may be a cheque of Rs. 85256.95/- dated 24th of May, 1998. On that particular date at least the figure stood at Nil. But despite the said reflections in account the respondent Bank has carried on calculating interest as high as 15.5%. From the facts and figures which have been brought on record by the respondent Bank, there are many unexplained entries in the said account. Petitioner has pointed out entries from the ledger, which adds up a substantial figure under the head of DIGC and some more entries of similar account. What is the basis for charging such amounts and showing them as debits in the account of the petitioner is not fully explained. Petitioner has made out a case for recalculating the accounts and outstanding dues which has been shown by the Bank in its present form and content. Petitioner has succeeded in making out a case 4 for a direction to recalculate the outstanding dues. Respondent Bank is directed to give a fresh recalculation to the petitioner explaining every head of the debit and credit entries from their accounts including the factum of Nil balance shown on 24th of May, 1998 in the protested bill register and only thereafter may be they can press for recovery of the amount if it is still outstanding after the above exercise. Before parting, the Court would like to remind the respondent Bank that the ratio laid down by the Hon’ble Supreme Court in paragraph No. 25 of the case of Corporation Bank (Supra) with regard to calculation of interest will have to be kept in mind and no internal circular of the State Bank of India will override the said decision. The writ application stands allowed. Shageer (Ajay Kumar Tripathi, J)