Radhakrishnan, J.

Power of the Registrar to issue circular No.35/01 dated 27-9-2001 directing the Co-operative Societies in the State to permit the borrowers to settle their outstanding loan at the document rate or at the then existing rate whichever is less excluding penal interest and compound interest is under challenge in this appeal.

2. Petitioner appellant is a service Co-operative bank registered under the provisions of the Kerala Co-operative Societies Act. Bank is engaged in the business of collecting deposits from its customers and lending money to its customers. Bank used to receive deposits from its customers agreeing to repay the same with interest at the rate of 15.5% per annum. Members of the bank used to avail of loan with interest at the rate of 18% per annum. If Ext. P1 circular is given effect to the bank has to settle the loan transaction at the rate of 13.5% which was the lending rate at the time of the circular, at the same time, bank has to pay 15% interest per annum to depositors. Bank will have to suffer a loss of Rs.7,90,000/- if the circular is given effect to since the bank has to settle 333 outstanding loan at 13.5% simple interest. Bank in sh