The Prudential Cooperative Bank Ltd v. A.P.Cooperative Tribunal & Ors.

THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION NO.11072 OF 2000 ORDER: The Prudential Cooperative Bank Limited, Secunderabad, assails the order of the A.P.Cooperative Tribunal, Hyderabad insofar as the same reduces rate of interest on the amount payable from 16.5% to 6% per annum. Be it noted, that the appeal was filed by borrowers assailing the certificate issued by competent authority under Section 71 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short, the Act). The certificate as such was confirmed, but rate of interest was reduced. A learned Single Judge of this Court (Goda Raghuram, J) in A.P.State Cooperative Bank Ltd. V. Cooperative Tribunal, Hyderabad, considered the issue whether Cooperative Tribunal is empowered to invoke and rely on the provisions of Section 34 of Code of Civil Procedure, 1908 to scale down the interest contrary to the agreement between parties. His Lordship after elaborate discussion of the issue, held that the Cooperative Tribunal constituted under Section 75 of the Act is denuded of any such power to interfere with rate of interest that is owed by a debtor to company like petitioner. The question raised in this Writ Petition is therefore squarely covered by said judgment. The learned counsel for contesting respondents does not dispute the legal position. Following the same, the Writ Petition is allowed modifying the impugned order and further observing that petitioner bank shall be entitled to recover the interest from the borrowers as per the award/certificate issued by competent authority under the Act. The Writ Petition is accordingly allowed. _______________

(V.V.S.RAO, J)

1.8.2005