JUDGMENT N. Kumar, J. 1. These two appeals arise out of the same order passed by the learned single Judge wherein he has held that the rate of interest payable after maturity of the deposit till the date of payment is 12% per annum. 2. Writ Appeal No. 30196/2013 is preferred by Venkateshwara Power Project Ltd. and Sugar Factory, contending that the interest payable is only 6% and not 12%. The Yamakanmaradi Urban Co-operative Society Limited has preferred Writ Appeal No. 30336/2013 contending that they were entitled to 17% interest as against 12% awarded by the learned single Judge. That is how, these two appeals are before us. 3. For the purpose of convenience, the parties are referred to as they are referred to in the proceedings before the learned single Judge. 4. The petitioner is a Co-operative Society registered under the Karnataka Co-operative Societies Act. The respondent is a Company incorporated under the provisions of the Companies Act, 1956. For short, both of them are referred to as 'the Society' and 'the Company'. On 31.03.2004, the Society deposited a sum of Rs. 3,01,12,945/- with the Company for a period of one year from 01.04.2004 to 31.03.2005. The rate of interest agreed upon was 17% per annum. The fixed deposit matured on 31.03.2005. The Society did not request for any renewal of the fixed deposit either before or immediately after the maturity. However, on 02.01.2006, the Society requested the company to renew the said deposits immediately and to send the original call deposits with interest. The Society did not receive any communication from the Company to the said letter either agreeing to renew the deposits or to return the money with interest. Therefore, a legal notice came to be issued on 04.04.2006 calling upon the Company to return the fixed deposit amount upto 31.03.2006 with contractual rate of interest till realisation. The said legal notice also was not replied to nor the deposit was returned. Therefore, the Society raised a dispute under Section 70 of the Karnataka Cooperative Societies Act on 20.04.2006 for a direction to the Company to return the amount in deposit with interest at 17% per annum from the date of maturity till the date of payment. After contest, an award came to be passed on 22.10.2007 directing the Company to return all the fixed deposit with interest at 17% from 01.04.2005 till the date of repayment. After contest, an award came to be passed on 22.10.2007 directing the Company to return all the fixed deposit with interest at 17% from 01.04.2005 till the date of repayment. Aggrieved by the said award, the Company preferred an appeal before the Karnataka Appellate Tribunal in Appeal No. 932/2007. As there was no stay order granted by the Appellate Tribunal, the Society initiated execution proceedings before the Civil Court in E.P. No. 158/2007. On 17.04.2008, in the Executing Court, a memo came to be filed. The said memo reads as under: "I) The dispute between the Decree holder and Judgment Debtor is settled with the intervention of elderly persons and the terms of the settlement are as under:-- 1) The Decree Holder has accepted the cheque bearing No. 268511 for Rs. 1,00,00,000/- (Rs. One crore) dated 15-04-2008, Rs. 1,05,00,000/- Cheque No. 786863, dated 15-04-2008 and for Rs. 10,00,000/- bearing cheque No. 786864 dated 15.04.2008, drawn on Bank of Baroda and Indian Overseas Bank, Kolhapur from the Judgment debtor. The total amount of Rs. 2,15,00,000/- (all cheques) received out of the Principle amount, (subject to the Audit report). 2) The Judgment debtor has preferred an appeal before the KAT under Appeal No. 932/2007. The Decree Holder has appeared in the said appeal. 3) The question of total interest on this deposit is kept open and the same is pending under appeal before the KAT. The Decree holder admits that, the decision of the KAT is binding on both parties. Thus, in lieu of the settlement the execution case is to be kept pending till the disposal of appeal No. 932/2007 by the KAT. Hence, the memo." 5. As is clear from the averments in the said memo, a total amount of Rs. 2,15,00,000/- was received towards principal amount. However, it was made clear that insofar as the question of total interest on deposit, it is to be kept open as the same was pending consideration before the Karnataka Appellate Tribunal. It is also made clear that the decree holder admits that the decision of the Karnataka Appellate Tribunal would be binding on both the parties though the aforesaid payment was made, execution case was kept pending till the disposal of the application No. 932/207. It is thereafter, the appeal was heard. It is also made clear that the decree holder admits that the decision of the Karnataka Appellate Tribunal would be binding on both the parties though the aforesaid payment was made, execution case was kept pending till the disposal of the application No. 932/207. It is thereafter, the appeal was heard. The Karnataka Appellate Tribunal by the impugned order allowed the appeal in part, modified the award passed by the Arbitrator and directed the Company to pay a sum of Rs. 3,78,32,983/- together with interest at 6% from 01.04.2006 till realisation. The amount of Rs. 70,00,000/- paid during the pendency of the dispute on different dates was directed to be adjusted towards interest first and remaining amount towards principal amount by calculating the interest on every such balance principal to such date of payment by the Company through cheques. Liberty was issued to the Society to recover the amount due to it by sale of immovable and movable properties of the Company. Cost of Rs. 2,145/- was also awarded to the Society. 6. Aggrieved by the said order, it is the Society which preferred W.P. No. 65339/2010. The learned single Judge, after referring to Section 58A(3)(A) of the Companies Act, 1956, held that, no doubt, the agreed rate of interest is 17%, but he was of the view that award of interest at 17% would workout hardship to the Company, but as the Society had received the deposits from the farmers and Society has to pay interest at the rate of 15% per annum and there is also recovery proceedings initiated against the Society, though the company is required to pay the interest at 17%, that interest was unreasonable and therefore he directed that the interest payable would be at 12% per annum instead of 17% per annum. 7. It is against the said order of the learned single Judge both the parties are in appeal. 8. Learned counsel for the Company assailing the impugned order contended that the agreed rate of interest is payable till the date of maturity of the fixed deposit. There is no agreement between the parties regarding rate of interest payable subsequent to date of maturity. The Karnataka Co-operative Societies Act does not deal with the payment of interest. Section 34 of Code of Civil Procedure is not applicable to the dispute in question as it is expressly excluded. There is no agreement between the parties regarding rate of interest payable subsequent to date of maturity. The Karnataka Co-operative Societies Act does not deal with the payment of interest. Section 34 of Code of Civil Procedure is not applicable to the dispute in question as it is expressly excluded. Therefore, the provisions of the Interest Act is what is applicable and under the Interest Act, the interest payable would be the "current rate of interest" as defined in Section 2(b) of the Act, i.e., the highest of the maximum rates at which interest may be paid on different classes of deposits by different classes of scheduled banks in accordance with the directions given or issued to banking companies by the Reserve Bank of India. Therefore, he submits that even the award of 12% interest by the learned single Judge is not in accordance with law and, therefore, the writ petition is to be allowed and the interest is to be reduced to 6%. 9. Per Contra, the learned Senior Counsel appearing for the Society contends that the question relating to the rate of interest to be paid subsequent to maturity of the fixed deposit is governed by the provisions of the Companies Act as the Company has received the deposits under the provisions of the said Act. Section 58(A)(3)(A) stipulates that the deposits accepted by the company, unless renewed, be paid in accordance with the terms and conditions of such deposit. At the time of deposit, it was mutually agreed that the said deposit shall carry interest at 17% per annum and therefore, after maturity till the date of payment, the interest payable is 17%. The Interest Act of 1978 has no application to the facts of this case and, therefore, he submits that the learned single Judge was in error in not restoring the award passed by the Arbitrator who had granted 17% interest in accordance with law. 10. In the light of the aforesaid facts and rival contentions, the point that arises for our consideration in these appeals is, "What is the rate of interest the Company is liable to pay after maturity of the deposit which it has received under the provisions of the Companies Act?" 11. It is not in dispute that the Company received the fixed deposit from the Society on 1.4.2004 for a period of one year repayable with interest at 17% p.a.. It is not in dispute that the Company received the fixed deposit from the Society on 1.4.2004 for a period of one year repayable with interest at 17% p.a.. The said fixed deposits matured on 31.3.2005. The company is a company formed and registered under the provisions of the Companies Act. Section 58A of the Act provides for receipt of deposits and the mode in which such deposits is to be received. Section 58A(1) reads as under:-- "58A (1) The Central Government may, in consultation with the Reserve Bank of India, prescribe the limits up to which, the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members." The relevant sub section for our purpose is (3A). It reads as under:-- "(3A) Every deposit accepted by a company after the commencement of the Companies (Amendment) Act, 1998, shall, unless renewed in accordance with the rules made under sub-section (1) be repaid in accordance with the terms and conditions of such deposit." 12. The rules made u/s. 58A is called the Companies (Acceptance of deposits) Rules, 1975. Rule 2(b) defines deposit as, "deposit" means any deposit of money with and includes any amount borrowed by a company. However, it does not include the amounts set out in the said provision which has no application to the facts of this case. Rules 8A of the Rules reads as under: "8A. Penal rate of interest - A penal rate of interest of eighteen percent shall be paid for the overdue period in case of public deposits matured and claimed, but remaining unpaid in case of deposit made by a small depositor, the penal rate of interest shall be twenty per cent, compoundable on an annual basis. Explanation - For the purpose of this rule, the expression 'a small depositor' has the same meaning as assigned to it in the Explanation to Section 58AA of the Act." Then Rule 10 deals with return of deposit to be filed with the Registrar which reads as under:-- "10. Explanation - For the purpose of this rule, the expression 'a small depositor' has the same meaning as assigned to it in the Explanation to Section 58AA of the Act." Then Rule 10 deals with return of deposit to be filed with the Registrar which reads as under:-- "10. Return of deposits to he filed with the Registrar - Every Company to which these Rules apply was on or before 30th day of June every year, file with the Registrar, a return in the form annexed to these rules and furnishing the information contained therein as on 31st day of March of that year duly certified by the Auditor of the Company. (2) A copy of the return shall also be simultaneously furnished to the Reserve Bank of India." 13. In pursuance of the said Rule periodically the company has filed its returns. The Auditor of the Company in the annexure to the Auditor's report, have categorically stated as under:-- "(vi) In our opinion and according to the information and explanation given to us, the company has accepted deposits from the public, but the provisions of Section 58A and 58AA of the Companies Act 1956 and the Companies (Acceptance of Deposits) Rules 1975 with regard to the deposits accepted from the public are not complied with." 14. From the reading of the aforesaid provisions of law, it is clear the company is expected to repay the deposits received in terms of the conditions of such deposit. The depositor has an option to renew the deposit. If there is no request for renewal, there is an obligation cast on the company to repay the deposit in accordance with the terms and conditions of such deposit. If such a repayment is not made in accordance with the terms and conditions of such deposit, the company is liable to pay penal rate of interest from the date of such public deposit maturing till the date of payment. In the case of small depositors the penal interest payable is 20%. In all other cases it is 18%. 15. In a prescribed form the company is under an obligation to file with the Registrar a return furnishing the information contained therein as on 31st of March of that year duly certified by the Auditor of that Company. In the case of small depositors the penal interest payable is 20%. In all other cases it is 18%. 15. In a prescribed form the company is under an obligation to file with the Registrar a return furnishing the information contained therein as on 31st of March of that year duly certified by the Auditor of that Company. Therefore, if a deposit is made what is agreed upon is rate of interest payable from the date of payment till the date of maturity. 16. The question of parties agreeing to the rate of interest payable subsequent to the maturity till the date of payment would not arise. It is for that reason in the Rules this penal rate of interest is statutorily provided. Irrespective of the rate of interest agreed upon between the parties, if there is default in payment of the deposit after it matures, the company is liable to repay such deposit with interest at 18%. If depositor is a small depositor then the interest payable is 20%. Therefore the intention of the legislature is very clear, unambiguous. The company by issuing advertisement when it calls for deposit from public, there is an obligation cast on them under the Act not only to repay the deposit with agreed rate of interest, but if they were to commit default they have to repay the deposit with the rate prescribed under the Rules. In the instant case, the argument is, on maturity the Society did not make a request for renewal and therefore, they are not entitled to any interest at all. 17. In the light of the aforesaid statutory provisions such argument has no substance. It is not necessary for the Society to have demanded repayment of the deposit. Once the deposit matures, the company was under an obligation to repay the said amount with the agreed rate of interest. If they did not choose to discharge the statutory obligation, then they are under the obligation to repay the said amount with penal rate of interest. There was no necessity for a demand. There was no necessity for a legal notice to be issued. In that view of the matter the Arbitrator rightly awarded interest at 17% which was the contractual rate of interest even subsequent to the period of maturity though in law society was entitled to 18%. There was no necessity for a demand. There was no necessity for a legal notice to be issued. In that view of the matter the Arbitrator rightly awarded interest at 17% which was the contractual rate of interest even subsequent to the period of maturity though in law society was entitled to 18%. Therefore, the order passed by the Arbitrator was legal and valid. The Karnataka Appellate Tribunal committed a serious error in ignoring the statutory provisions and reducing the interest to 6%. 18. Though the learned Single Judge interfered with such an arbitrary and illegal order, again on the ground, that inconvenience is going to be caused to the Company, if they are asked to pay 17%, it has reduced it to 12% which is contrary to the aforesaid statutory provisions. There is no discretion conferred on any court to reduce the rate of interest when a statute prescribe the rate of interest. The words used in Rule 8A is clear. The penal rate of interest of 18% shall be paid for the overdue period. The said provision is mandatory. No discretion is conferred on the courts to reduce the said rate of interest. In fact, in this case, the Arbitrator ought to have awarded 18% which is statutorily prescribed. However, he has ordered for the rate of interest agreed between the parties and he has respected the agreement over the statute. In that view of the matter the order passed by the learned single Judge also is not sustainable. 19. Hence, we pass the following order:-- "i) Writ appeal 30196/2013 is hereby dismissed; ii) Writ Appeal 30336/2013 is allowed; iii) The order passed by the learned Single Judge as well as the Karnataka Appellate Tribunal are hereby set aside. The award passed by the Arbitrator is restored; Parties to bear their own costs. In terms of the calculation filed by the Society before the Court, calculating interest at 12% p.a. the company is due in a sum of Rs. 1,95,75,886/-. However, according to the appellant it was only a sum of Rs. 51,61,946/- which has to be deposited by them. In terms of the order passed by this Court on 14.6.2013 the said amount of Rs. 51,61,946/- has been deposited. 1,95,75,886/-. However, according to the appellant it was only a sum of Rs. 51,61,946/- which has to be deposited by them. In terms of the order passed by this Court on 14.6.2013 the said amount of Rs. 51,61,946/- has been deposited. Now that we have restored the award passed by the Arbitrator where the interest awarded is 17%, we are of the view the amount in deposit should be paid to the successful party i.e. the Society. Accordingly the High Court Registry is directed to pay Rs. 51,61,946/- to the Society. However, as the Execution Petition is still pending before the Executing Court, it is open for the parties to file respective memo of calculation and depending on the same, they can work out the amounts due in terms of the award.