JUDGMENT - CHAVAN B.V., J.:—A substantial question of law that arises in the present appeal is : Whether the interest awarded by the Courts below was liable to be scaled down under the provisions of Usurious Loans Act, 1918 or otherwise liable to reduction on account of breach of the circulars issued by Reserve Bank of India under section 21 of the Banking Regulation Act, 1949? 2. The relevant facts giving rise to the present second appeal are these: Appellant Gulabchand (hereinafter referred to as 'defendant No. 1'), who is an agriculturist by profession obtained a loan from respondent No. 1 Central Bank of India (hereinafter referred to as 'Bank') from its branch at Yeotmal, District Yeotmal as a crop loan on 5-8-1970 in the sum of Rs. 4,000/- and executed a promissory note, a mortgage-deed and a hypothecation deed witnessing the said transaction. It was agreed that interest at 4½% per annum over the bank rate subject to the minimum of 9½% per annum subject to periodical changes in accordance with the change in the bank rate was to be paid by defendant No. 1. It was also agreed that interest was to be charged at 6 monthly rests. On 25-7-1973 after taking into account payment already made, a fresh promissory note for the balance amount was executed. Since defendant No. 1 failed to clear all the dues in spite of notice of demand, ultimately in the year 1976, bank filed Civil Suit No. 123/76 to recover the amount of Rs. 1261.11 from defendant No. 1. 3. Defendant No. 1, who is principal debtor by his written statement contended that the rate of interest agreed between the parties was 9½% per annum and whatever was alleged by the bank in the plaint and the calculation made being contrary to the said agreement, he denied the same. 4. The learned trial Judge after framing issues and recording evidence held that bank had proved that defendant No. 1 had borrowed a loan of Rs. 4,000/- on 5-8-1970 and had agreed to repay the sum with interest at the stipulated rate. He further held that defendant No. 2 alone was a guarantor for the plaintiff in connection with the repayment of the said loan and the interest. 4,000/- on 5-8-1970 and had agreed to repay the sum with interest at the stipulated rate. He further held that defendant No. 2 alone was a guarantor for the plaintiff in connection with the repayment of the said loan and the interest. The learned Judge found that defendant No. 1 had committed default in repayment of the said loan amount with interest and, therefore, he was liable to pay penal interest as claimed and charged by the bank. The learned trial Court found that the bank had proved the execution by defendant No. 1 of the promissory notes as well as mortgage-deed and the other documents, after discarding the plea of defendant No. 1 to the contrary. Consistent with these findings, learned Judge passed a decree for Rs. 1261.11 p. inclusive of past interest with future interest at 4% per annum. 5. Feeling aggrieved by the said decree, bank filed Civil Appeal No. 6/80 on the point of the form of the decree and the rate of interest from the date of the suit till payment awarded by the learned trial Judge. On the other hand, defendant No. 1 filed Civil Appeal No. 30/80 challenging the decree passed against him. The learned District Judge, Yeotmal by his judgment and decree dated 20-8-1981 held that plaintiff was entitled to a preliminary decree for sale of the mortgaged property in place of a simple decree passed by the learned trial Judge and defendant No. 1 had agreed to pay interest as claimed by the bank. The learned Appellate Judge declined to increase the rate of future interest. Accordingly he partially allowed Civil Appeal No. 6/80 filed by the bank and modified the trial Court's decree by passing a preliminary decree for sale of the mortgaged property. He dismissed the appeal filed by defendant No. 1. 6. Feeling aggrieved by the said judgment and decree passed by the learned District Judge, Yeotmal dated 20-8-1981, defendant No. 1 has filed the present second appeal. 7. Shri Gilda, learned Counsel appearing on behalf of the appellant urged that although the provisions of Usurious Loan Act, 1918 are attracted in the present case, both the courts below failed in applying those provisions and reducing rate of interest on the ground that it was excessive. 7. Shri Gilda, learned Counsel appearing on behalf of the appellant urged that although the provisions of Usurious Loan Act, 1918 are attracted in the present case, both the courts below failed in applying those provisions and reducing rate of interest on the ground that it was excessive. He contended that the bank after initially charging interest at 9 1/2% had gone on increasing the rate of interest to 16% plus 2% penal interest and that too at 6 monthly rests, which was nothing but usury and, therefore, this Court in exercise of its powers under section 3 of the Usurious Loans Act, 1918 should re-open the account and reduce the rate of interest to 9% per annum, simple interest, which would be reasonable, having regard to the nature of transaction between the parties. He, therefore, contended that if account is taken at 9% per annum, there will be hardly an amount of Rs. 30/ -, that will be found due by defendant No. 1 to the bank. 8. Shri Gilda in support of his argument relied upon certain authorities, where a view has been taken under the Usurious Loans Act, 1918 that a Court is entitled to examine the nature of a particular transaction in the background of the circumstances and come to the conclusion that the interest charged, even in accordance with the circulars issued by the Reserve Bank of India under section 21 of the Banking Regulation Act, 1949, was liable to be reduced, if it was found to be in the nature of usury. The second limb of the argument of Shri Gilda, which is developed in the course of his rejoinder was that even assuming that in view of the change in law the courts were not entitled to exercise powers under section 3 of the Usurious Loans Act, 1918, yet if on examination of the material on record, it was found that the interest actually charged by the bank was not in accordance with the circulars issued by the Reserve Bank of India under section 21 of the Banking Regulation Act, 1949, then to that extent such act of the bank being illegal, interest charged in excess of the rate prescribed by the Reserve Bank of India was liable to be reduced. 9. 9. On the other hand, Shri T.C. Jain, learned Counsel appearing on behalf of the bank urged that this being a second appeal, the scope was very limited and it was only to the extent of examining substantial questions of law without entering into questions of facts. He pointed out that the courts below had as a matter of fact found on evidence that there was an agreement between the parties to charge interest at a particular rate over the prevailing bank rate with six monthly rests and also for payment of penal interest in case the amount remained overdue. He, therefore, urged that when the courts below had after accepting the evidence led on behalf of the bank had found that the account filed by the bank was correct and on that basis passed a decree for the amount claimed in the plaint, there was hardly any scope for exercising powers of the Court under section 3 of the Usurious Loans Act, 1918. He contended that even assuming that there was such a power and as held by some of the authorities relied upon on behalf of the appellant, it was open to the Court to reduce the rate of interest on the ground that it was excessive in spite of the rate being in accordance with the circulars issued by Reserve Bank of India, yet on account of change in law brought about by Banking Laws (Amendment) Act, 1 of 1984, section 24 incorporating altogether a new section 21-A in Banking Regulation Act, 1949, whatever power the courts had previous to this amendment under the Usurious Loans Act, 1918, it was taken away by the said section 21-A, which specifically prohibited the courts from re-opening a transaction between a banking Company and its debtor on the ground that the rate of interest charged by the Banking company in respect of such transaction is excessive. He, therefore, contended that section 21-A totally prohibits this Court from re-opening transaction as is sought to be done on behalf of the appellant. 10. Now so far as the legal position is concerned, provisions of Usurious Loans Act, 1918 which were framed by the then Central Government for the purpose of giving additional powers to Courts to deal with certain cases of usurious loans are still in the Statute book. 10. Now so far as the legal position is concerned, provisions of Usurious Loans Act, 1918 which were framed by the then Central Government for the purpose of giving additional powers to Courts to deal with certain cases of usurious loans are still in the Statute book. It appears that since the subject of money lending was in the State list, even under the Government of India Act, 1935, there have been local amendments to this Act, but so far as Bombay State and its successor State Maharashtra are concerned, there has been no amendment as such to this Act except an amendment carried out by the C.P. and Berar Act, 11 of 1934, which was in force in M. P. of which Vidarbha Region of the State of Maharashtra was a part till States Reorganisation Act of 1956 and it is only in this region that a local amendment carried out by the said C.P. and Berar Act is in force. However, it is not necessary to set out the amendment since it is not of much consequence so far as the present controversy is concerned. Although at the earlier stage of his argument, Shri Gilda cited authorities of different High Courts prior to the amendment of the Banking Regulation Act, 1949 by Act 1 of 1984, but after the said amendment whatever has been held in those earlier cases decided before amendment, has no relevance in the context of the change in Law as it exists today and, therefore, I do not propose to refer to those authorities, except to the extent it is necessary to understand the context. 11. The main question to be decided in the present appeal is: Whether on account of incorporation of section 21-A in the Banking Regulation Act, 1949, additional power conferred on the courts to re-open the loan transactions under the provisions of the Usurious Loans Act, 1918 has been taken away so that debtors of Banking Companies cannot approach the Courts to re-open the loan transactions entered into by them with Banking Companies on the ground that the interest charged by the Banking Companies in respect of such transactions is excessive. Section 21-A of the Banking Regulation Act, 1949 reads thus:— “Rates of interest charged by banking companies not to be subject to scrutiny by courts—Notwithstanding anything contained in the Usurious Loans Act, 1918, or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be reopened by any Court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive.” On the face of it, it is clear that by the said section, the Parliament intended that notwithstanding the provisions contained in the Usurious Loans Act, 1918 or any other law relating to indebtedness in force in any State, courts will not be entitled to reopen any transaction between a banking company and its debtor on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. Therefore, if it is held that so far as this matter is concerned, if the provisions of section 21-A of the Banking Regulation Act, 1949 are held applicable then certainly the appellant will not be entitled to ask this Court to exercise its power under the provisions of the Usurious Loans Act, 1918. 12. Shri Gilda, however, contended that section 21-A is prospective in its application and therefore, it will not apply to a suit as in this case, which was instituted in the year 1976, long before the amendment was brought about by Act 1 of 1984. In support of his argument, Shri Gilda relied upon (A.I.R. 1987 Mad. 248)1. No doubt it has been held in the case cited above that section 21-A of the Banking Regulation Act, 1949, which came into existence by the Amendment Act I of 1984 with effect from 15-2-1984 only, evidently was without any retrospective effect and the application of the said provision can be only with reference to cases that come into existence as disputes before courts subsequent to 15-2-1984. Shri Gilda also fairly brought to my notice another decision reported in (A.I.R. 1986 Karnataka 242)2, though for a different purpose, in which it has been accepted by referring to the earlier decision of the said High Court in (A.I.R. 1985 Karnataka 228)3, that the courts in view of the mandate of section 21-A cannot exercise jurisdiction under the Usurious Loans Act, 1918 or any other law relating to indebtedness for the purpose of giving relief to any party. It must be said that in this case the question whether section 21-A is prospective or retroctive was not specifically raised and decided. 13. However, reading section 21-A as it is, which has been quoted above, it appears to be retroactive in operation, if effect is to be given to the language and intent behind the said provision. Prior to 1984, different High Courts had taken different views holding that even in respect of loans advanced by the Nationalised Banks to debtors, though the rate of interest charged by them was in accordance with the circulars issued by the Reserve Bank of India, still it was open to the Courts to reopen such transactions in exercise of its power under the provisions of Usurious Loans Act, 1918 and give relief by reducing the rate of interest in appropriate cases on the ground that it was unreasonable and harsh. In order to overcome this difficulty, Parliament while enacting the Banking Laws (Amendment) Act, 1983 (Act I of 1984) took an opportunity to incorporate section 21-A for the purpose of providing that the rate of interest charged by the banking companies to the debtors shall not be subjected to scrutiny by Courts notwithstanding anything contained in the Usurious Loans Act, 1918 or any other State law relating to indebtedness, by providing section 24 in the said Act (see Statement of Object and Reasons and the notes on clauses annexed thereto, Bill No. 70 of 1983 published in Gazette of India Extra-ordinary Part 2 section 2 dated May 10, 1983). Apart from this, if one looks to the provision itself, it clearly says that although additional power was given to the courts to scrutinise the loan transactions on the ground of excessive charging of interest under the provisions of Usurious Loans Act, 1918, it was no longer open to the courts to reopen such transactions between a banking company and its debtor on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. It is, therefore, clear that the intention was that if in any matter, a debtor sought to reopen transaction between himself and the bank on the ground of charging interest at an excessive rate before any Court, it was not open to such Court to do it under the provisions of Usurious Loans Act, 1918. Use of the words 'any Court' would in the context include every Court existing in the hierarchy of law courts and, therefore, so long as a Court is asked to exercise its powers under the provisions of Usurious Loans Act, 1918, in a matter pending before it, provisions of section 21-A of the Banking Regulation Act, 1949 will be attracted and the Court is prohibited from undertaking that exercise. Although strictly speaking, it may not be appropriate to consider the interpretation given to another statute of similar nature, yet it will be useful to refer to the decision of the Supreme Court in (Mithilesh Kumari v. Prembihari)1, 1989 Mh.L.J. 210(S.C), where the provisions of section 4 of Benami Transaction (Prohibition) Act, (45 of 1988) fell for consideration. The relevant provision reads thus: “Section 4(1). The relevant provision reads thus: “Section 4(1). No suit, claim or action to enforce any right in respect of any property held benami against a person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property; (2) No defence based on any right in respect of any property held benami whether against a person shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.” While considering the question whether by coming into force of the Benami Transactions Act on 19-5-1988, when the appeal was pending before the Supreme Court, can a suit itself be said to be pending, the Supreme Court held in para 24 that hearing of appeal under the processual law of India is in the nature of rehearing and, therefore, in moulding the relief to be granted in case of appeal, the Appellate Court is entitled to take into account even the facts and events, which have come into existence after the decree appealed against. It is held “consequently the Appellate Court is competent to take into account legislative changes since the decision under appeal was given and its powers are not confined only to see whether the lower Court's decision was correct according to law as it stood at the time when its decision was given.” The Supreme Court held, “once a decree of High Court is appealed against, the matter became sub judice again and thereafter this Court had seisin of the whole case, though for certain purposes e.g. execution, the decree was regarded as final and the courts below retained jurisdiction in that regard.” Relying on its earlier decision in (Dayawati v. Inderjit)5, A.I.R. 1966 S.C. 1423 holding that the word, “suit” includes an appeal from the judgment in the suit, Supreme Court held that plaintiff/respondent's suit cannot be decreed under the law as it stood when the appeal before the Supreme Court came to be decided and consequently they allowed the appeal and dismissed the suit. 14. 14. In the present case as stated earlier, what the Parliament has done is that the power given to the Court under the Usurious Loans Act, 1918 has been taken away by enacting section 21-A by Act I of 1984 and, therefore, every Court, which would include also the appellate Court and High Court in Second Appeal, before whom, a debtor seeks to reopen such a transaction between himself and a bank, would be barred from doing so on the ground that the rate of interest charged by the bank was excessive. In my view, therefore, this Court in Second Appeal before which the appellant/debtor is asking to reopen the account between the appellant and the bank on the ground that the rate of interest charged is excessive, both because of high rate and on account of compounding the same by six monthly rests, is prohibited from entertaining this plea by virtue of section 21-A of the Banking Regulation Act, 1949, although the suit out of which this plea arises may have been instituted in 1976, when section 21-A was not on the statute book. In this view that I am taking, it is not necessary to refer to certain other authorities that were cited by Shri Gilda, since they pertain to pre-1984 position. Having regard to this legal position, with respect I do not agree with the view expressed in A.I.R. 1987 Mad. 248, wherein a view has been taken that section 21-A of the Banking Regulation Act, 1949 applies only in respect of actions, which are brought before the Court after 15-2-1984. On the other hand, I hold that section 21-A applies to all actions that were and are pending before any Court on the date when the said provision was brought into force i.e. with effect from 15-2-1984 and if such suit, appeal or proceeding is pending before any such Court on or after 15-2-1984, such Court is prohibited from entertaining any plea to reopen any transaction between a debtor and a bank on the ground of excessive charging of interest under the provisions of Usurious Loans Act, 1918. 15. 15. The next argument as I stated earlier, which was developed by Shri Gilda in the course of his rejoinder was that even assuming that the Court was not entitled to reopen the transaction under the provisions of the Usurious Loans Act, 1918 because of the bar created by section 21-A of the Banking Regulation Act, 1949, yet as held by the Karnataka High Court in A.I.R. 1986 Karnataka 242, this Court was entitled to hold that a debtor was entitled to relief against a bank if it is proved that the bank in question in that particular transaction charged compound interest with quarterly rests or at rates higher than prescribed by the Reserve Bank of India by its directives under section 21 of the Banking Regulation Act, 1949, as it would be clearly illegal and the bank would not be entitled to recover such excess amount. True, the Karnataka High Court in A.I.R. 1986 Karnataka 242 has taken the view that banks are bound to follow the directives or circulars issued by the Reserve Bank of India prescribing the structure of interest to be charged on loans and any interest charged by bank in excess of the prescribed limit as well as against the circulars/directives regarding charging of compound interest would be illegal and void because such circulars/directives are binding on the banks. Strictly as a matter of law, I see no reason to disagree with this statement of law. It is clear that section 21 of the Banking Regulation Act has conferred powers on the Reserve Bank of India inter alia to prescribe rate of interest and other terms and conditions on which advances or other financial accommodation may be made or may be given and every banking company is bound to comply with these directives given under this section, failing which it is liable to penal action. Therefore, if in a given case, if it is proved as a matter of fact that the bank has charged interest at a higher rate than prescribed by the directives of the Reserve Bank of India or has charged compound interest in respect of a loan to an agriculturist contrary to the directives issued by the Reserve Bank of India, it would be open to a Court of law to examine the said question and give appropriate relief consistent with the directives of the Reserve Bank of India. In fact, Shri Jain appearing on behalf of the Bank said in so many words that the banks are bound to follow the directives issued by the Reserve Bank and, therefore, any action contrary to such directives will certainly make it open to be examined by the Court. In such a case, the prohibition imposed by section 21-A of the Banking Regulation Act, 1949, would not come into picture because such examination by a Court would not be either under the provisions of Usurious Loans Act, 1918 or under a Debt Relief Act prevailing in a State but it will be an action to examine the act of a bank, whether it is in consonance with the directives of the Reserve Bank, which are statutorily binding on it. 16. Although, as stated above, I have taken a view that in certain circumstances, it would be open to a Court of law to give relief to a debtor in case it is found that a bank has in contravention of the directives of the Reserve Bank charged higher rate of interest, yet so far as the facts of the present case are concerned, it is difficult for me to examine the present case from this angle. The reason is, for want of adequate data in the form of necessary Reserve Bank Circulars and perhaps the Reserve Bank itself as a party, as it I happened to be in A.I.R. 1986 Karnataka 242, I would not be justified to embark upon a fishing enquiry particularly in a suit filed in the year 1976 in a Second Appeal with its limited scope. Shri Gilda tried to persuade me to enlarge the enquiry by giving an application for additional evidence under Order 41, Rule 27, Civil Procedure Code at the fag end of his argument but I have rejected the same on the same ground as stated earlier and particularly when the claim involved in the present appeal was only Rs. 1200/- and odd. 16-A. I may also mention that Shri Gilda relied upon the provisions of Order 34, Rule 11, Civil Procedure Code and two decisions reported in (A.I.R. 1956 Nag. 1200/- and odd. 16-A. I may also mention that Shri Gilda relied upon the provisions of Order 34, Rule 11, Civil Procedure Code and two decisions reported in (A.I.R. 1956 Nag. 105)5 and (A.I.R. 1964 Punjab 123)6 and urged that decree passed by the lower Court has not distinguished the Award of interest for the amount of principal as determined from the date of the suit until the date of payment I stipulated in the preliminary decree and the rate of interest on the amount found due under the decree from the date of payment stipulated by the decree till the date of realisation as contemplated by Order 34, Rule 11, Civil Procedure Code. In the present case as it could be seen from the true extract of the ledger account Exh. 29 of the loan taken by the appellant interest has been charged at six monthly rests and added to the principal from 1970 till the filing of the suit and suit has been filed only for the balance of the amount due after giving credit for the payments made. It is not a case of charging of simple interest so that at the foot of the mortgage, the principal account and the interest due I could be ascertained. Here the interest being compound interest in pursuance of the agreement between the parties at every six monthly rest, it was added to the principal amount and, therefore, whatever amount that has been claimed in the plaint and decreed by the Trial Court as well as by the Appellate Court is the amount due at the foot of the mortgage and it is only on this amount that the Court has awarded interest at 4% per annum at a flat rate. I do not think, therefore, the authorities relied upon by Shri Gilda have any bearing on the facts of the present case nor do I find any material irregularity or illegality I in the decree that has been passed by the Trial Court as slightly modified by the Appellate Court. 17. The result is : decree passed by the trial Court and as modified by, the Appellate Court deserves to be confirmed and the Second Appeal will have to be dismissed. 17. The result is : decree passed by the trial Court and as modified by, the Appellate Court deserves to be confirmed and the Second Appeal will have to be dismissed. As regards costs, Shri Jain submitted that exemplary costs should be awarded but since the point involved being one on which there is no reported authority of this Court, I do not think that the bank is entitled to any exemplary costs. 18. The result is that the appeal is dismissed with costs. Appeal dismissed. -----