12. Rate of interest payable by debtors on new loans.
- In any proceeding for recovery of a debt, the Court shall scale down all interest whether paid or payable on any debt incurred by any debtor on or after the 1st March 1972, so as not to exceed a sum calculated at nine per cent per annum simple interest:Provided that the Government may, by notification, alter and fix any other rate of interest, from time to time.Explanation I - For the purposes of this section, the definition of "debtor" in section 2 (3) shall be read as if in the first proviso to the said section-(i)in clause (i), for the expression "31st March 1972", the expression "31st March immediately preceding the date on which the debt is incurred" were substituted;(ii)in clauses (ii) and (iii), for the expression "the four half years immediately preceding the 1st March 1972", the expression "the four half years ending on the 31st March or the 30th September (whichever is later) immediately preceding the date on which the debt is incurred" were substituted.Explanation II. - Where any debtor has paid to any creditor any interest at a rate more than the rate specified in this section, the amount of interest so paid shall be calculated by the Court at the rate specified in this section and the excess of the amount so paid shall be credited towards the principal.
