The Tribunal is vested with the discretion to reduce the rate of interest for pendent lite and future charges as provided under section 19 of RDDBFI Act – State Bank of India Vs. Charter Awadh Educational Trust – DRAT Allahabad Bench
So far as the reduction in rate of interest is concerned, the Tribunal is vested with the discretion to reduce the rate of interest for pendent lite and future charges as provided under section 19 of RDDBFI Act. However, such discretion is required to be exercised judiciously considering the entire facts of the case. Further, no relaxation is generally granted in commercial loan but in the instant matter, the respondents are running educational institutions therefore, their loan is strictly not covered under the definition of commercial loan rather it is an institutional loan. The respondents are imparting education and have shown the pleasurable reason for not making repayment in time because of poor response of the students. Thus, in these circumstances, they are entitled to get some relaxation in interest rate from the date of filing of Original Application till the date of realization but not from the date of declaration of NPA.
