JUDGMENT C.K. Thakker, CJ :- This petition is filed by the punjab National Bank (the Bank1 for short) against an order passed by the Debts Recovery Appellate Tribunal. Mumbai on August 5. 1999. in Appeal No. 253/98 partly allowing the appeal filed by M/s. Thakur Stone Crusher and others - respondents No. 1 and 2 herein, which was filed by the respondents against an order passed by Debts Recovery Tribunal. Jaipur, on February 18. 1998 in Original Application No.295 of 1997. 2. The Plaintiff-Bank filed an application on May 5. 1997 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act. 1993. (hereinafter referred to as "the Act"), against the respondents-defendants for recover} of Rs. 14.01.300/-. The case of the plaintiff-Bank was that defendant No,2 {Lt. Col. T.R. Thakur. (Retd). was the sole proprietor of defendant No.l M/s. Thakur Stone Crusher. It was averred that in pursuance of a written application dated July 18. 1990 to the Bank, a term loan of Rs.6.10 lacs with minimum interest of 12 1/2% per annum with half yearly rests was advanced to the defendants. Defendant No.2 executed necessary documents on August 20. 1990 and availed of the facility of loan. To secure the repayment of the loan, defendant No.2 also deposited title deeds with the intention to create equitable mortgage and confirmed outstanding balance from time to time. The defendants, however, failed to re-pay the amount. Hence, the application. 3. A reply was filed by the defendants, inter alia, contending that the applicant-Bank was to advance loan of Rs.8.70 lacs, which was sanctioned and that too at the simple rate of interest of 12 1/2% per annum. The terms of the documents were not disclosed to the defendants nor copy sanction letter was given to them and signatures of the defendants were obtained on blank forms. It was. however, admitted that an amount of Rs.6.10 lacs was released by the plaintiff-Bank. It was stated that the documents of title were not deposited with intention to create equitable mortgage and those documents were demanded by the petitioner only to examine the worthiness of the defendants. The plantiff-Bank had clahned certain amounts towards guarantee fee. etc. illegally. The interest calculated was at a higher rate, which was never agreed by the defendants and. hence, the plaintiff-Bank was not entitled to such rate of interest. The plantiff-Bank had clahned certain amounts towards guarantee fee. etc. illegally. The interest calculated was at a higher rate, which was never agreed by the defendants and. hence, the plaintiff-Bank was not entitled to such rate of interest. Affidavits and further affidavits were filed by the parties before the Original Tribunal. 4. On the basis of documentary evidence as also the evidence on record, the Debts Recover} Tribunal partly allowed the application by recording certain findings of fact. It observed that it was admitted even by the defendants and otherwise proved from record that term loan of Rs.6.10 lacs was released by the plaintiff-Bank to the defendants. Regarding execution of documents, the Tribunal held that the signatures had been put by the defendants and it was not proved that they had been obtained by the plaintiff-Bank on blank forms or blank papers. On the basis of documentary evidence on record on interest, the Tribunal observed as under: "Next point is as to whether the applicant-bank has charged interest as agreed? On perusal of clause No. 10 of hypothecation-agreement Ex.4, interest at the rate of 12 1/2% p.a. subject to changes made by the Reserve Bank of India was payable with quarterly rests. As per Ex.5 pronote. interest at the rate of 12 1/2% p.a. with half yearly rests was agreed and it has been pleaded that interest at the rate of 12 1/2% p.a. with half yearly rests was agreed. As per para 5.11 of the original application, interest at the rate of 12 1/2% p.a. has been charged upto 21.9.90. at the rate of 14% per. from 22.9.90 and at the rate of 18.25% p.a. from 9.10.91 with half yearly rests and in view of clause 10 of Ex.4, the applicant-bank was entitled to charge interest at the enhanced rates even without giving any notice. Learned counsel for the Bank has also argued that balance confirmation letter Ex.15 contains the interest rate 14% p.a. and balance confirmation letter Ex.16 and 17 contain the interest rate 18.25% p.a. Thus, the applicant-bank was entitled to charge interest at the enhanced rates. But learned counsel Shri Sharma has rightly argued that the applicant-bank has charged interest nor with half yearly rests but with quarterly rests and it becomes clear on perusal of the certified copy of the statement of account Ex.27. But learned counsel Shri Sharma has rightly argued that the applicant-bank has charged interest nor with half yearly rests but with quarterly rests and it becomes clear on perusal of the certified copy of the statement of account Ex.27. Learned counsel Shri Sharma has further rightly argued that no penal interest was agreed but the applicant-bank has charged penal interest also. Therefore, the applicant-bank has to submit revised statement after calculating interest at the above rates with half yearly rests and no penal interest is also allowed. Learned counsel Shri Sharma has also argued that Ex.3 sanction letter provides interest at the rate of 12 1/2% p.a. and there is no condition of quarterly rests and Ex.4 provides interest with quarterly rests while pronote Ex.5 provides interest with half yearly rests and in these facts and circumstances, the applicant-bank should be (sic) interest at the simple rate of 12 112% at the simple rate of 12 1/2% per. But this argument cannot be accepted at all in view of the pronote Ex.5. Thus, the applicant-bank has to submit revised statement as stated above." 5. With regard to other items, the Original Tribunal granted some relief in favour of the defendants. The Tribunal, therefore, concluded: "I have considered the rival contentions and am of the view that the contentions of learned counsel Shri Sharma can not be accepted because it was not mandatory on the part of the applicant-bank to grant any such permission and therefore, it is not correct to say that the applicant-bank is not entitled to charge any interest from February. 1993. Therefore, the applicant-bank has to submit revised statement along with affidavit of the Branch Manager. This order has been pronounced in open Court today 8.1.1998." The operative part of the order of the Original Tribunal reads thus: "The applicant-bank is entitled to recover a sum of Rs.13.55.108.75 along with costs of the proceedings and future interest at the rate of 18.25% p.a. with half yearly rests from 6.5.97 till realization from the defendants and is also entitled recover this amount by sale of hypothecated goods and equitably mortgaged immovable properties also." 6. Being aggrieved by the order passed by the Original Tribunal, the respondents filed an appeal before the Appellate Tribunal at Mumbai. It was contended that the Original Tribunal had committed an error of law and of fact in awarding interest at the. Being aggrieved by the order passed by the Original Tribunal, the respondents filed an appeal before the Appellate Tribunal at Mumbai. It was contended that the Original Tribunal had committed an error of law and of fact in awarding interest at the. rate of 12 1/2% per annum with half yearly rests. The order was. thus, illegal and deserved to be set aside. 7. The Appellate Tribunal partly allowed the appeal observing that it did not find from the loan agreement that interest at the rate of 12.5% per annum with half yearly rests was agreed to be paid by the defendants and. hence, it could not have been charged by the Bank. It also observed that there was an enhancement of rate of interest by the Bank. Before doing so. a notice ought to have been served upon the defendants, which was not done. The Appellate Tribunal observed: "The documents indicate that simple interest Q 12.5% p.a. was agreed to be charged by the respondent- Bank". The Appellate Tribunal, therefore, directed the counsel for the Bank to submit fresh statement of account calculating interest at the rate of 12.5% per annum upto August 31. 1999 and as observed by the Appellate Tribunal in the order, such statement had been produced on record. The said statement indicated that an amount of Rs.8.42.499/- was due and payable by the appellants to the respondent-Bank. The Appellate Tribunal, on the basis of the said finding and calculation of amount and statements produced on record, held that the defendants were liable to pay an amount of Rs.8.42.499/-only. 8. The Appellate Tribunal concluded: "I feel that, ends of justice will be met if the appellants are directed to pay Rs.8 lacs with interest a 12.5% p.a. instead of amount Rs. 13.55.108/- & 75 Ps. Awarded by the DRT. However, the rests and sale of hypothecated goods and mortgaged property shall remain undisturbed. Accordingly, this appeal is partly allowed and the order of the DRT Jaipur is modified and substituted to the effect that appellants are directed to pay Rs.8 Lacs with future interest @ 12.5% p.a. from the date of this order, till realization of this amount. The rest of the order of DRT is confirmed. No order as to costs of this appeal." 9. The above order passed by the Appellate Tribunal is challenged by the Bank in the present petition. 10. The rest of the order of DRT is confirmed. No order as to costs of this appeal." 9. The above order passed by the Appellate Tribunal is challenged by the Bank in the present petition. 10. We have heard the learned counsel for the parties. The counsel appearing for the petitioner-Bank contended that the Appellate Tribunal has committed an error of law and of jurisdiction in ordering payment of interest at the rate of interest of 12.5% per annum from the respondents. It was urged that after considering the facts and circumstances of the case, the Original Tribunal held that though the petitioner-Bank had demanded interest at the rate of 12 1/2% with half yearly rests with effect form October 9. 1991. the Bank was entitled to interest at the rate of 12 1/2% per annum with half yearly rests only from March 6. 1997. It was submitted that the said rate was agreed by the respondents and on the bass of letters of confirmation, interest was awarded and the said order ought not to have been disturbed by the Appellate Tribunal. It was also stated that the Appellate Tribunal was factually incorrect in observing that the documents indicated that simple interest "S 12.5% p.a. was agreed to be charged by the respondent-Bank. The documents show to the contrary, namely, either the interest was to be paid on quarterly rests or half yearly rests. It was. therefore, submitted that the petition deserves to be allowed by setting aside the order passed by the Appellate Tribunal and restoring the order passed by the Original Tribunal. 11. Mr. Burathoki. on the other hand, supported the order passed by the Appellate Tribunal. He submitted that the original agreement has not been produced by the Bank and. hence, best available evidence has been with-held by the Bank. It is only on the basis of hypothecation deed as well as other letters that demand of interest at the rate of 12 112% per annum with half yearly rests was demanded, which was illegal and null and void. It was also submitted that eve those so called confirmation letters could not have been relied upon by the they Tribunals inasmuch as they were never been relied upon by both the Tribunals inasmuch as they were never signed by the defendants and only on blank papers signatures were obtained. It was also submitted that eve those so called confirmation letters could not have been relied upon by the they Tribunals inasmuch as they were never been relied upon by both the Tribunals inasmuch as they were never signed by the defendants and only on blank papers signatures were obtained. It was submitted that before enhancing the rate of interest, a notice ought to have been issued to the respondents, which had not been done. Enhanced rate of interest, therefore, could not have been demanded. Finally, it was submitted that inspite of the fact that the Appellate Tribunal held that the Bank was entitled to simple interest at the rate of 12.5% per annum, which was said to have been calculated by the Bank and a figure had been arrived at and produced on record, but it was not as per simple interest of 12.5% and an additional amount had been claimed by the Bank, which was illegal and improper. On all these grounds, the counsel, submitted that the petition deseives to be dismissed. 12. Having heard the learned counsel for the parties, the petition deserves to be allowed. Looking to the documentary evidence, it is clear that the respondents agreed to pay interest as per demand made by the plaintiff-Bank. 13. In hypothecation deed, the relevant clause relating to interest reads as under: "That interest at the rate of 2.5 percent per annum over the Reserve Bank of India rate with a minimum of 12.5 per cent per annum shall be calculated on the daily balance due to the Bank on the said account and shall be charged of the account on the last working day of the quarter so long as the debt herein incurred is not paid by Borrowers in its entirety and. will for part of principal and earn interest at the above mentioned rate. Interest chargeable shall be subject to changes by Reserve Bank of India/Bank from time to time. In case of default in payment of the interest or installment on the due date, and or in case of entire loan is recalled and/or in case the account becomes irregular. (a) On account of borrower failing to make up the margin. (b) On account of excess borrowing due to over drawal of limit and/or drawing power not being available. (c) for any other reason whatsoever. (a) On account of borrower failing to make up the margin. (b) On account of excess borrowing due to over drawal of limit and/or drawing power not being available. (c) for any other reason whatsoever. The borrowers agree to pay increased interest @,_______% p.a. with agreed rests over and above the agreed rate of interest as under: i) on the amount in default from the date of default ii) on amount outstanding from the date of demand iii) on the amount of excess borrowing, from the date the account becomes irregular." Clause 12 and 13 of the hypothecation deed are also relevant, which read as under: "That the Borrower hereby agree that their liability to the Bank shall for the purpose of the agreement be joint and several and that the Bank shall always have the right under this agreement to give indulgence or to grant time or negotiate with any of the Borrowers without the liability of the other Borrowers being affected thereby or without prejudice to the Banks rights and remedies against any one or all of the Borrowers. Further that the Borrowers hereby agree to hold themselves liable as aforesaid on all confirmation letters signed by any one of them. That the Borrowers hereby undertake to repay the loan by Only (half year/yearly) installments of Rs.sic plus interest due calculated at the rate of_____% OBR minimum________%. In case of default by Borrowers in this behalf, the Borrowers shall on demand pay to the Bank the balance then outstanding on the said account inclusive of interest and all other charges as mentioned herein." 14. It is signed by the respondent (Annexure P-2 to the petition). Similarly. Annexure P-3 to the petition is a letter of acceptance by the respondents wherein also it was agreed by the defendants that the amount would be paid with interest thereon at the rate of 2.5% per annum over the Reserve Bank of India rate with minimum rate of 12.5% per annum with half yearly rests. Such receipts/communications are also produced at Annexure P-4. P-5 and P-6. Such receipts/communications are also produced at Annexure P-4. P-5 and P-6. In some of them it is not clearly stated as to whether it is half yearly rests or quarterly rests, but if in the light of the above facts and documentary evidence, the Original Tribunal has held that the respondents had agreed and were required to pay interest at the rate of 12.5% with half yearly rests (and not quarterly rests), and that too with effect from May 6. 1997. it cannot be said that the Original Tribunal had committed an error of law which deserved interference by the Appellate Tribunal. 15. Regarding the convention that the documents executed and confirmation letters sent were not genuine and signatures were obtained by the Bank only on blank papers have not been believed by both the Tribunals. Obviously, therefore, such an argument is not open to the respondents before this Court in the present proceedings. The observations of the Appellate Tribunal that the documents indicated that simple interest a 12.5% was agreed to be charged by the respondent-Bank has no basis or foundation whatsoever. The said statement is contrary to the documentary evidence produced on record. It was therefore, not open to the Appellate Tribunal to have interfered with the rate of interest awarded by the Original Tribunal on the bass of documentary evidence produced by the Bank. In our considered opinion, therefore, the order passed by the Appellate Tribunal is liable to be quashed and set aside. 16. Prima facie, the grievance voiced by the learned counsel for the respondents is sustainable that even after the direction by the Appellate Tribunal to the Bank to calculate the interest at the simple rate of 12.5% per annum, interest which has been calculated by the bank does not appear to be at the simple rate of interest of 12.5% per annum. That is. however, a question of calculation of interest. We may only say that on the basis of the documentary evidence produced ; by the Bank and letters of confirmation, the order passed by the Original Tribunal directing the respondents to pay interest at the rate of 12.5% per annum with half yearly rests was legal, valid and in consonance with law. The said order could not have been interfered with by the Appellate Tribunal. The said order could not have been interfered with by the Appellate Tribunal. Hence, the order passed by the Appellate Tribunal deserves to be set aside by restoring the order passed by the Original Tribunal. 17. For the reasons aforesaid, in our opinion, the petition deserves to be allowed and is. accordingly, allowed. The order passed but the Debts Recovery Appellate Tribunal.Mumbai. in Appeal No.253 of 1998 on August 5. 1999. is hereby set aside and the order passed by the Debts Recovery Tribunal. Jaipur, on February 18. 1998 in Original Application No.295/97 is hereby restored. The petitioner-Bank will now calculate the interest as per the order and direction of the Debts Recovery Tribunal. Jaipur, and will calculate the amount on that basis and recover from the respondents. 18. In the facts and circumstances of the case, there shall be no order as to costs.