CANARA BANK vs P.R.N.UPAADHYAYAA

The Supreme Court upheld the decision of the Banking Ombudsman, which directed the appellant bank to recast the interest charged on loans granted in 1980 and 1986, citing the judgment in State Bank of Patiala Vs. Harbans Singh (1994) 3 SCC 495. The Court emphasized that the bank's practice of charging interest at a higher contractual rate with quarterly rests was not justified, particularly in light of the Reserve Bank of India's circulars. The appeal was dismissed, affirming the Ombudsman's order to adjust excess interest charged and recalculate the loan accounts accordingly.