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1. The instant writ application is filed by the debtor, Inter alia, against its creditor respondent-West Bengal Financial Corporation (WBFC). Petitioner has questioned annexure D dated 26.11.1996 being notice Issued under Section 29(1) read with Section 30 of State Financial Corporation Act 1951 (for short 'Act') for recovery of the loan.

2. It is not in dispute that a term loan was sanctioned in favour of the petitioner and was disbursed by the respondent Corporation on 19.2.93 and 23.3.93. The same was required to be repaid by the petitioner within a period of six and half years by 12 half yearly Instalments @ Rs. 0.64 lac each.

29. In the affidavtt-in-opposition, it has been stated that the guidelines of the Reserve Bank of India are not binding on WBFC as it is not a banking Company but a financial institution. It is also stated that WBFC follows the guidelines of Industrial Development Bank of India (IDBI) or Small Industries Development Bank of India (SIDBI) as regards the rate of interest chargeable by WBFC. It has been further stated that by a letter dated November 2, 1984 (annexure 'C' to the affidavit-In-oppositlon), the IDBI had permitted WBFC to stipulate gross rate of interest at 4% higher than the applicable rate with a provision for equivalent rebate for prompt payment. It has been further stated in the affidavit-in-opposition that the specified rate of interest chargeable by financial institution was 19% in terms of the circular of the IDBI dated May 4, 1992. It is, therefore, contended that at the time of sanction of the loan to the petitioner, WBFC was entitled to charge interest at the rate of 23% per annum (19% + 4%) In terms of the aforesaid circular dated May 4, 1992 read with the letter dated February 2. 1984 (annexures 'C' and 'D').

30. From the above, it is apparent that the prevalent rate of interest in terms of the circular dated May 4, 1992 (annexure 'D') Is 19%. The statement in the sanction letter that the "the present rate being 23% per annum" is, therefore, not correct and as in fact misleading. The WBFC has stipulated gross rate of interest at 4% higher than the applicable rate and referred to the same as the applicable rate*. In its letter dated November 2, 1984, annexure 'C', IDBI has merely expressed its no objection in the matter. It is the admitted case of WBFC that the rate of interest is governed by the circulars Issued by IDBI or SIDBI. The circular letter dated May 4, 1992 specifies the Interest chargeable at 19%. In my view, therefore, the respondent Corporation is entitled to charge Interest as per the aforesaid circular letter and not by stipulating a higher rate of interest than applicable.

32. Admittedly, petitioner defaulted in the payment of Instalments in that the amount as specified in respect of half yearly instalment/s was not paid in time. There is, therefore, no question of any rebate being either claimed by the petitioner or being granted by the respondent Corporation. It is, therefore, not considered necessary to decide on the question as to the grant of rebate to the petitioner or the rate at which the same is to be granted.

33. Before parting with the case. It must also be stated that Mr. Dhandhania referred to and relied upon the judgment of a learned single Judge in Kothari Electrodes (P) Ltd. and Ors. v. West Bengal Financial Corporation and Ors. (WP No. 7824 of 1998) (Unreported judgment), wherein it was held that the guidelines issued by the Reserve Bank of India is not applicable to WBFC As in the case on hand, it is held that the non obstante clause is not applicable, it is not necessary to consider in any great detail the contentions advanced on behalf of the petitioner as to the applicability of guidelines issued by the Reserve Bank of India to banking Companies as regards the rate of interest on term loans advanced by WBFC.