The facts:- The plaintiff, the State Bank of India, Eluru Branch is the appellant. It appeals against a judgment of the learned District Judge, Eluru who in A.S.No. 151 of 1980 confirmed the judgment of the trial Court dismissing a suit filed by the Bank for recovery of a sum of money advanced by the Bank as loan to an agriculturist. The Bank sued its debtor, who is an agriculturist, in O.S.No. 176 of 1979 on the file of the district Munsif, Eluru for recovery of a sum of Rs. 8,260.20. That amount was made up of the principal and compounded interest due on the loan minus the part payments made by the defendant-agriculturist from time to time.

2. The principal sum the defendant borrowed from the plaintiff was only Rs.7,200/- and that amount was secured by a mortgage. But that amount soared to be the suit amount even after the defendant had made part payments because of the stipulation of agreement providing for payment of compound interest. The loan agreement provided for the payment of 1½ of interest over and above the prevailing bank rate but subject to a condition of the debtor paying a minimum of 8½% per annum with quarterly rate on the borrowed amount. Thus the princip