The State Bank of India vs Parshuram Singh and Others

After having heard the senior counsel for the appellant and the counsel for respondent no. 1, we are satisfied with the observations made by the Single Judge, ''that the loan being an agricultural loan, Bank was not authorized to charge compound interest nor was it permitted to capitalize any delayed payment interest are only tentative in nature. Since the Single Judge has directed the Bank to have a fresh exercise of recalculation of outstanding amount, all aspects relating thereto are kept open to be considered by the Bank. We further observe that in case respondent no. 1 is dissatisfied with the recalculation that may be done by the Bank, it will be open to him to challenge the same in accordance with law on all available grounds.

With the aforesaid clarification, L.P.A. is disposed of.