The circulars issued by the Reserve Bank of India regulating the rate of interest chargeable on agricultural and other loans are statutory and binding on all Banks governed by the provisions of S.21 of the Banking Regulation Act.

1. This is an appeal by the 1st defendant in a suit for money due to the plaintiff Bank under a loan transaction.

2. The Dhanalakshmi Bank Limited (hereinafter referred to as the Bank) granted a loan of Rs.50,000/- to the 1st defendant for purchase of a fishing boat. As security for the loan the three defendants jointly executed Ext.A1 demand promissory note for Rs.50,000/- in favour of the Bank on 26-11-1976. The 1st defendant also executed a Hypothecation deed Ext.A2 on the same day, hypothecating the boat called 'Sindhu' purchased utilising the loan amount. As collateral security Exts. A3 to A5 title deeds of immovable properties of the defendants were deposited with the Bank by way of equitable mortgage as per three memoranda of deposits of title deeds marked as Exts.A6 to A8. After availing the loan, the defendants have also acknowledged their liability under the loan transaction as per Exts.A9 and A10 dated 26-7-1979 and 23-10-1981 respectively. Since the defendants failed to repay the loan in full, the plaintiff Bank instituted the present suit for realisation of a total sum of Rs.58,921.40 with 18.5% interest per annum from the date of suit till realisation and costs of the suit by the sale of the fishing boat and the immovable properties charged for the debt.

3. Defendants 1 and 2 while admitting the loan transaction as detailed in the plaint, mainly disputed the correctness of the amount claimed in the plaint and the Bank's right to claim interest at a rate higher than 10% per annum simple interest. It was alleged that the amount has been claimed in the plaint after calculating interest at a rate much higher than 10% and that too with rests. It is the case of the defendants in their written statement that they have already paid a total amount of Rs.1,50,000/- and if the account is settled afresh after recalculating the interest at 10% simple interest no amount will be found due to the plaintiff. Before the court below the defendant relied upon Ext.B1 photo copy of a letter sent by the Reserve Bank of India to the President, Kerala Federation of Mechanised Boats Owners Association, Quilon in support of their contention that the Reserve Bank of India has restricted the rate of interest chargeable in regard to agricultural loans like the one availed of by the defendants to 10% and that the plaintiff Bank is bound by the circulars fixing the rate of interest issued by the Reserve Bank and referred to in Ext.Bl. It was also contended that the plaintiff is bound to recalculate the amount due as per the loan transaction and the suit can be decreed only for the balance if any found due after such recalculation and settlement of accounts.

4. With reference to the dispute raised regarding the rate of interest and calculation of interest with rests, the learned judge framed the following issues:

"Is the interest claimed excessive and if not, what is the interest allowable? Whether the memo of accounts is correct and what is the amount due to the plaintiff?"

5. The learned judge found that the interest as charged by the Bank at 15% is in accordance with the terms contained in Ext. A1 pronote and as such the defendant cannot challenge the rate and manner of calculation of interest adopted by the Bank in Ext.A11 memo of account. It was also found that the defendants have not shown how the memo of account is incorrect. However, it was found that the loan under which money was paid to 1st defendant was an agricultural loan and not a commercial, loan. Hence the learned judge allowed future interest only at 6% per annum. In the circumstances, a decree for the plaint claim of Rs.58,921.40 with 6% interest per annum from the date of suit alone was passed, charged on the fishing boat and the immovable property furnished as security for the loan.

6. In the appeal, the appellant has filed two applications to receive certain additional documents in evidence. C.M.P.No.6429 of 1989 is an application to receive two documents as additiona