Judgment :- This second appeal is directed against the Judgment and Decree dated 30.12.2005 passed in A.S.No.32 of 2005, decreeing the suit for recovery of Rs.97,707/- with interest and thereby reversing the judgment of District Munsif Court, Madurantakkam in O.S.No.133 of 2004. 2. The case of plaintiff is that on 22.02.1996, first defendant borrowed a sum of Rs.40,000/- from the plaintiffs Bank for digging a new Well under NABARD scheme and executed Promissory Note and Hypothecation Agreement for prompt re-payment. Second defendant, is the husband of first defendant, who had executed a guarantee letter on the same date. First defendant deposited the title deeds on 23.02.1996 for the purpose of creating an equitable mortgage. It was confirmed by their letter dated 24.02.1996. Further case of the plaintiff Bank is that defendants have also confirmed balance outstanding on 19.02.1999 and 16.02.2002. The plaintiff Bank has filed the suit O.S.No.133 of 2004 claiming Rs.97,707/- along with interest. 3. The defendants resisted the suit contending that they have obtained loan from the bank, which has been refinanced by NABARD Bank and under the scheme defendants ought to have obtained a certificate from the Geological Department regarding the prospects of the Well. Further case of defendants is that after digging the Well, there is failure of the Well. The Bank verified the same and furnished the particulars of failure of the well to its Certifying Agency, which is constituted for the specific purpose. According to the defendants, once the bankers received the letter about the failure of the well, no interest should be charged on the said loan. Since there was delay on the part of plaintiff Bank in getting compensation under NABARD Scheme, the plaintiff cannot recover any amount from the defendants. The defendants have alleged that due to deficiency in service rendered by the plaintiff bank, the first defendant has incurred loss of Rs.2,00,000/-, which the plaintiff Bank is bound to compensate. 4. On the above pleadings, the trial Court framed four issues. To substantiate its claim, plaintiff Bank examined PW1 and marked Exs.A1 to A35. Defendants 1 and 2 were examined as DW1 and DW2 and Ex.B1 was marked on the side of the defendant. Upon consideration of evidence, trial Court held that plaintiff Bank have not taken steps to inspect the Well and to furnish particulars to Certifying Authority. To substantiate its claim, plaintiff Bank examined PW1 and marked Exs.A1 to A35. Defendants 1 and 2 were examined as DW1 and DW2 and Ex.B1 was marked on the side of the defendant. Upon consideration of evidence, trial Court held that plaintiff Bank have not taken steps to inspect the Well and to furnish particulars to Certifying Authority. The trial Court further held that the plaintiff Bank ought to have send the report to the District Registrar Co-operative Societies claiming compensation under NABARD Scheme. It was further held that without placing the result of the report before the Court, plaintiff Bank would not be entitled to claim the amount and on this findings, trial Court dismissed plaintiffs suit. 5. Being aggrieved by the judgment of the trial Court, plaintiff Bank filed appeal in A.S.No.32 of 2005. Referring to Exs.A33 to A35, lower Appellate Court held that the Bank had taken steps to get the compensation amount in time. Lower appellate Court further held that under Ex.A2 defendants have undertaken to repay the amount and that it cannot resile from it. Lower Appellate Court further held that second defendant himself is an employee of the plaintiff Bank and have borrowed the amount and that the defendants are liable to pay the amount. On those findings, lower Appellate Court reversed the judgment of the trial Court and decreed the suit passing preliminary decree. Challenging the judgment of the lower Appellate Court, appellants /defendants have filed this second appeal. 6. The second appeal was admitted on the following substantial question of law: "Whether the Lower Appellate Court is right in holding that Ex.B1 is a contract between the appellants and respondent without noticing that the said scheme was formulated by NABARD and accepted by the respondents for the grant of loan to agriculturist? 7. The learned counsel for the appellant contended that the lower Appellate Court did not keep in view the special scheme / NABARD scheme under which plaintiff Bank has advanced the loan. It was further submitted that the Bank has failed to take steps to inspect the failure of the Well and when the Bank has failed to take steps to furnish the particulars before the Certifying Authority, lower Appellate Court is wrong in interpreting Ex.A20 (27.03.1999) -undertaking letter. It was further submitted that the Bank has failed to take steps to inspect the failure of the Well and when the Bank has failed to take steps to furnish the particulars before the Certifying Authority, lower Appellate Court is wrong in interpreting Ex.A20 (27.03.1999) -undertaking letter. It was further argued that as per the NABARD Scheme, respondent Bank has to get the compensation directly and the appellants ought to have been discharged from paying the loan amount. 8. Learned counsel for the respondent Bank submitted that the Bank has taken all steps to get compensation under the NABARD scheme and inability to get compensation cannot be the ground for non suiting the plaintiff bank. Laying emphasis upon Ex.A20 letter, the learned counsel for the respondent/plaintiff Bank would further contend that second defendant having undertaken to pay the amount cannot avoid the liability, moreso, when the second defendant is an employee of the bank. 9. The facts are not in dispute. The defendants are husband and wife and second defendant is an employee of Indian Bank. The first defendant borrowed Rs.40,000/-on 22.02.1996 for digging the well for which Ex.A1 Promissory note and Ex.A2, deed of hypothecation were executed. The second defendant executed Ex.A3 deed of guarantee. With intention to create equitable mortgage (Ex.A6), the first defendant has also deposited the title deeds (Ex.A7 to Ex.A9). 10. Admittedly, the loan was granted under NABARD scheme and was governed by the NABARD scheme. The NABARD scheme provides compensation scheme for failed well. Marginal farmers and SC/ST farmers to whom loans were sanctioned by the financial institutions would be entitled for compensation for wells which have failed and the service for failure of wells. The scheme provides that the branch should keep a close watch over the progress in the construction of the wells. On receipt of information from the beneficiary of a failure of well, the details of failure with particulars of well should be furnished to the certifying agency, which is constituted for the purpose of certification of failure of wells. This reporting should be done within six months from the date of receipt of information about failure of well from the borrower. This reporting should be done within six months from the date of receipt of information about failure of well from the borrower. After the certifying agency certifies to the effect that the well has failed, the branch should make an application for grant of assistance to the Administrating Authority, constituted by the State Government for the purpose of administering the scheme and maintenance of failed well compensation fund. 11. Admittedly, after digging the well water could not be found and the defendants have given intimation to the plaintiff Bank about the failure of the well. There is no denying that the intimation of the failure of the well was given to the plaintiff Bank by the defendants on 14.09.1996. Under Ex.A13 (dated 111. 1997), plaintiff Bank requested the Asst. Director (Geology) to expedite the settlement of failed well compensation claim of the first defendant. The Asst. Director (Geology) and the other members of the committee inspected the well on 24.04.1998 and noticed massive hard rock and that there was no possibility of water springs in the well. To that effect Asst. Director (Geology) has sent the report (Ex.A18 dated 111. 1998) to the Executive Engineer, Chennai. In Ex.A18, the Asst. Director (Geology) has clearly mentioned the depth and width of the well dug and requested utilisation certificate. 12. By Ex.A21 letter (dated 14.09.2001), the Asst. Director (Geology) requested the Bank to send the estimate for claiming failed well compensation. In Ex.A21, the Asst. Director (Geology) has also asked the Bank to send estimate/proposal for claiming compensation for failed well to the Registrar of Cooperative Societies marking the copy to the Asst. Director (Geology). In Ex.A21, the Asst. Director (Geology) has also requested the plaintiff Bank as to whether any such proposal was already sent to the Registrar of Cooperative Societies. In fact, in Ex.A22 (dated 24.09.1999), the Bank has already informed the Executive Engineer, Nandanam that the well is declared by Expert Committee as a failed well and requested Executive Engineer to issue the utilisation certificate. By perusal of Ex.A18 to Ex.A22, it is clear that the loan being covered under NABARD Scheme, the Bank has discharged the duty cast upon it by taking steps for inspection of the Well by expert committee. After the report was received, the Bank has also corresponded with the Executive Engineer requesting them to sent utilisation certificate. By perusal of Ex.A18 to Ex.A22, it is clear that the loan being covered under NABARD Scheme, the Bank has discharged the duty cast upon it by taking steps for inspection of the Well by expert committee. After the report was received, the Bank has also corresponded with the Executive Engineer requesting them to sent utilisation certificate. The learned trial Judge did not keep in view about the various steps taken by the plaintiff Bank and erred in faulting the plaintiff Bank for not taking prompt steps in getting failed well compensation under NABARD Scheme. The learned trial Judge faulted the plaintiff Bank saying that the plaintiff Bank has not acted prudently and that the utilisation certificate was obtained only in the year 2001 and proposal was sent to the Deputy Registrar of Cooperative Societies only in the year 2002. As pointed out earlier, after receipt of Ex.A18 (dated 111. 1998), the Bank has sent Ex.A22 (dated 24.09.1999) requesting the Executive Engineer to issue utilisation certificate. 13. Referring to NABARD Scheme and evidence of DW.1, the learned trial Judge held that after receipt of intimation about the failure of the Well (14.09.1996), it was the duty of the Bank to arrange for inspection of the Well by the expert committee within six months from the date of intimation and that they must get the certificate from the certifying agency and submit application for compensation to the District Registrar of Cooperative Societies within six months and Bank has to obtain compensation within three months therefrom. The learned trial Judge dismissed the suit mainly on the ground that the plaintiff Bank had not taken prudent steps for getting the compensation of failed well. 14. Admittedly, the intimation of failure of the well was given on 14.09.1996. If really the Bank had not taken steps for inspection of the Well and for submitting the estimate to the Deputy Registrar of Cooperative Societies, the defendants could have approached the Bank requesting the Bank to take appropriate steps. It is not as if the defendants are simply rustics. The second defendant himself is an employee of the bank. The second defendant, would have well known the procedure under NABARD scheme, making arrangements for inspection of the Well and getting certificate from the certifying agency. It is not as if the defendants are simply rustics. The second defendant himself is an employee of the bank. The second defendant, would have well known the procedure under NABARD scheme, making arrangements for inspection of the Well and getting certificate from the certifying agency. Even though the second defendant was an employee of the bank, the second defendant had not approached the Bank nor had the defendants sent any representation requesting the Bank to take prompt steps. While so, the trial Court erred in absolving the defendants from liability and dismissing the suit. 15. While the learned District Munsif made observation regarding the slackness of the plaintiff bank, the trial Court did not keep in view the conduct of the defendants. In fact after the Asst. Director (Geology) had sent his report on 111. 1998 (Ex.A18), the second defendant being the guarantor of the loan had executed Ex.A20 (dated 27.03.1999) undertaking letter, undertaking to repay the entire outstanding balance. Further in Ex.A20, the second defendant has given clear undertaking to pay the entire balance outstanding stating that even if NABARD rejects the subsidy claim preferred by the plaintiff Bank on account of failed well. The defendants have also executed revival letters Ex.A4 (19.02.1999) and Ex.A5 (16.02.2002) confirming and acknowledging their liability. Ex.A4, Ex.A5 and Ex.A20 are strong pieces of evidence substantiating plaintiff banks claim. Whileso, the trial Court erred in saying that Ex.A4 and Ex.A5 revival letters have no relevance. Ex.A5 revival letter (dated 16.02.2002) is very crucial. Stating that even if the compensation amount for failed well is negatived, undertaking to pay the amount the defendants have executed Ex.A5 revival letter, which goes a long way strengthening plaintiff banks claim. Having acknowledged their liability, the defendants cannot now resile from their liability. Based upon Ex.A20 acknowledgement, the Appellate Court was right in concluding that the defendants are bound to pay the amount. Upon analysis of evidence and materials, the learned Appellate Judge was justified in reversing the finding of the trial Court. 16. Insofar as the interest is concerned, the learned Appellate Judge while allowing the appeal passed decree for Rs.1,35,670.85 with interest at the rate of 14% per annum from the date of appeal till the date of decree and thereafter subsequent interest at the rate of 6% per annum on Rs.40,000/-. 16. Insofar as the interest is concerned, the learned Appellate Judge while allowing the appeal passed decree for Rs.1,35,670.85 with interest at the rate of 14% per annum from the date of appeal till the date of decree and thereafter subsequent interest at the rate of 6% per annum on Rs.40,000/-. While so awarding interest, the learned Appellate Court did not keep in view the beneficial provisions under NABARD Scheme. As per clause 3 of failed well compensation scheme. The branch should not charge any interest in the loan amount from the date of information regarding failure of wells. As per clause 8, as regards the interest charges to the account, the branch should waive the same after obtaining the permission from the concerned office in respect of failed wells for which refinance has been availed from NABARD and the branch should claim 50% of the interest waived from NABARD through its concluding office. As pointed out earlier, refinance was not availed from NABARD. 17. So far as interest prior to suit, it is generally regulated by contract and the Court ordinarily allows interest at the stipulated rate unless the rate is excessive or the margin unconscionable (Section 74 of the Contract Act). As regards allowance of interest for the period prior to the institution of the suits, the same depends on the agreement between the parties and substantive law applicable to the same. Now, interest for the period prior to the date of the suit may be awarded if there is an agreement for payment of interest at a fixed rate. Even though the refinance could not be availed from NABARD, having regard to the object and the purpose of the scheme for which loan was taken, insofar as pre-suit interest, relief could be granted to the defendants by reducing the rate of interest from 14% to 6% and to that extent the judgment of the lower Appellate Court is modified. 18. So far as interest pendente lite is concerned by and large it should be less than the agreed rate unless there are compelling and inescapable reasons to the contrary. As pointed out earlier the loan was for agricultural purpose and it was a case of failed well. Even though the defendants have availed the loan, they could not enjoy the benefits of the loan because of the failure of the Well. As pointed out earlier the loan was for agricultural purpose and it was a case of failed well. Even though the defendants have availed the loan, they could not enjoy the benefits of the loan because of the failure of the Well. In such facts and circumstances, the interest pendente lite shall also be at the rate of 6% per annum as awarded by the lower Appellate Court. 19. The judgment of the lower appellate Court in A.S.No.32 of 2005 of Sub Court, Madurantakan is modified and this Second Appeal is partly allowed. It is held that the appellants are liable to pay principal amount of Rs.40,000/-, with simple interest at the rate of 6% per annum from the date of the loan ie., 22.02.1996 till the date of realisation. In all other aspects, the preliminary decree passed by the lower Appellate Court stands confirmed. Consequently, connected Miscellaneous Petition is closed. No costs.