1. The important question that had come up for consideration was regarding the rate of future interest allowable by the Arbitrator/ Registrar of Co-operative Societies from the date of claim/suit till the date of realization of the debt.

2. The District Co-operative Bank and the other banks constituted under the Co-operative Societies Act (for short the Act), which were advancing loans to its members and public, filed claims/suits before the Registrar/ Arbitrator under S.69 of the Act for settlement of the disputes. In all the cases the Arbitrators/ Registrars passed awards allowing future interest at the contract rate including penal interest. The above awards had been challenged by the loanees/debtors before the Co-operative Tribunal. In some cases the Co-operative Tribunal modified the award and limited future interest from the date of the claim/ suit at 6%. But in some cases the Tribunal did not interfere with the award and upheld the contract rate of interest awarded by the Arbitrator/ Registrar. The Bank as well as the loanees challenged the above orders by filing Original Petitions.

3. Loans had been advanced by different co-operative banks for different purposes to its borrowers at different rates of interest. Certain banks advanced loans with interest at 12.5% and imposing a condition to recover 2% penal interest in the case of default in making repayments in time. Some co-operative banks granted loans with interest at different rates ranging from 14.5% to 21% and also imposing condition to recover penal interest ranging from 2 to 3 percent in the case of default in making repayments in the scheduled time. Further there was provision in the agreement to capitalisation of interest on periodical rests. When there was default, the banks filed suits/claims before the Arbitrator/ Registrar and in all cases awards were passed with future interest from the date of claim at the contract rate including the penal interest also. The loanees challenged the award before the Co-operative Tribunal mainly challenging the rate of future interest awarded by the Registrar. In some of the cases the Co-operative Tribunal reduced the rate of future interest from the contract rate to 6% placing reliance on the decision of the Supreme Court in N.M. Veerappa v. Canara Bank (AIR 1998 SC 1101). The above order passed by the Tribunal had been challenged by the banks by filing different Original Petitions. But in some cases the Tribunal did not interfere with the award passed by the Arbitrator allowing future interest at the contract rate and in such cases the loanees had challenged the same by filing different Original Petitions. As the question for consideration in all those Original Petitions filed by the banks and borrowers was common, all those Original Petitions are considered jointly and are disposed of by this common judgment.

4. The main argument advanced by the learned counsel appearing for the co-operative banks was that the decision of the Supreme Court in Veerappa's case (supra) cannot have any application in arbitration proceedings before the Arbitrator/ Registrar of Co-operative Societies and the above decision would apply only to proceedings before the civil courts. In the case cited above the Canara Bank advanced loan and when the loanee defaulted in repaying the amount, a civil suit was allowed at 6% per annum. The Canara Bank challenged the suit before the civil court for a decree for realisation of the amount. As an equitable mortgage also had been created by the deposit of title deeds, the suit before the civil court was one under 0.34 CPC. The trial court after considering the evidence found that 0.34 R.11 would be applicable and accordingly future interest from the date of suit was allowed at 6% per annum. The Canara Bank challenged the above judgment and decree and in appeal the High Court modified the judgment and decree and allowed the contract rate of interest from the date of suit till realisation. The loanee