JUDGMENT

VENKATACHALIAH, J. :— This appeal, by special leave, is by the plaintiff - Bank of Baroda - a nationalised-bank constituted under the Banking Companies [Acquisition and Transfer of Undertakings] Act (Act No. 5, of 1970) and is directed against the judgment, and decree dated 29-6-1988* of the High Court of Andhra Pradesh in Second Appeal No. 832 of 1987 affirming the concurrent decrees of dismissal of plaintiffs suit recorded by the trial and the First Appellate Courts. The two Courts below dismissed the suit principally on the ground - upholding the respondents defence in that behalf - that Section 13 of the Andhra Pradesh [Andhra Area] Agriculturists Relief Act, [4 of 1938] [A.R. Act, 1937, for short] prohibited the charging of compund interest. Appellants case that Section 4(e) of the said Act itself excluded its application to Banks constituted under a statute was not accepted.

* Reported in (1988) 2 Andh LT 148.

2. On 16-10-1982, appellant instituted the Original Suit 47 of 1983 on the file of Subordinate Judge, Eluru, for the recovery of a sum of Rs. 13,076.45 alleged to be due towards principal and the balance of accrued interest under an agricultural- loan obtained by the respondent on 16-1-1971 on the security of certain properties respecting which a charge was created in favour of the appellant under a mortgage by deposit of title deeds. Appellant claimed to be entitled to interest, as agreed to between the parties, at four and half per cent above the Reserve Bank rate, with quarterly rests. Appellant alleged that respondent who had periodically acknowledged the liability for repayment of the balance outstanding having failed and neglected to repay, appellant had, had to call up the account and institute the suit.

Respondent inter alia, contended that she had indeed, paid far in excess of what the appellant was legitimately entitled to recover under the law; that as against the sum of Rs. 15,000/- originally borrowed she had paid two sums of Rs. 20,000/- each on 8-9-1980 and 15-12-1981 respectively; that she was entitled to the benefit and protection of the "A. R. Act" and that, accordingly, she was herself entitled to a refund of Rs. 14,765.90 paise for the recovery of which she preferred a counter-claim. The trial Court by its judgment dated 4-11-1985 accepted the defence of the respondent and while entering a decree of dismissal of the plaintiffs suit, it, however, proceeded to decree the counterclaim of the respondent in the sum of Rs. 14,765.90 paise. In doing so the trial Court almost entirely placed reliance upon and followed an earlier decision of the same High Court in Indian Bank, Alamuru v. Muddana Krishna Murthy, AIR 1983 Andh Pra 347. The trial Court felt bound by the view taken therein as to the scope of Section 4(e) of the A. R. Act which denied to Banks constituted under the Companies (Acquisition and Transfer of Undertakings) Act [5 of 1970], the exemption from the provisions of the A.R. Act.

Against this judgment and decree of the trial Court appellant preferred two appeals, one against the dismissal of its suit and the other against the decree of the counter-claim, in A. S. 153 and 154 of 1985 on the file of the District Judge, West Godavari. The Appellate Court found no merit in the appeals and dismissed them by its judgment dated 13-4-1987.

3. The second appeal No. 832 of 1987 preferred by the appellant before the High Court of Andhra Pradesh also came to be dismissed by a learned single Judge who heard the matter by the judgment dated 29-6-1988* now under appeal. The defence urged by the respondent, and upheld by the Courts below, was that the respondent was entitled to the benefit of the "A. R. Act" and of the laws against usury. Indeed, the controversy between the parties was appropriately summed up by the High Court:

* Reported in (1988) 2 Andh LT 148

"The defendants admitted the borrowings of the principal sum and execution of the promissory note and the agreement and the hypothecation of t