Moreover the act of charging interest at different rates on different periods, goes to show non-application of mind by respondent authority.: Calcutta High Court

The statement was opined by the Calcutta High Court in the case of Bmw Industries Ltd vs Uco Bank & Ors, WPO 146 of 2020 presided over by Justice IP Mukherjee and Justice and Biswaroop Chowdhury on 2 December, 2022


The appellant who filed the writ claims to be a producer of iron and steel goods. Since 2005, it has periodically accessed loans and advances from UCO Bank to operate its company. The respondent bank maintained various accounts for the appellant related to this loan and advance in accordance with standard banking procedure.

It is contended on behalf of the appellant that apart from the rate charged by the respondent bank, the highest rate charged by “any bank” in the cash credit account was 12.85%. The respondent bank charged 14.70% which was 1.85% higher than the highest rate.


Industrial units are unable to make good planning decisions due to the lack of critical information. On the basis of the petitioner’s representation and evaluation of various criteria, the bank authority in the current case granted the petitioner/request appellant’s for a decrease in interest; nonetheless, it assessed excess interest over that specified in the letter dated May 22, 2015.

To increase interest, it was their responsibility to make a precise conclusion and inform the petitioner of it. The decision not to inform the petitioner is arbitrary and is against natural justice norms.

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