Indian Banks' Association, Bombay & Ors vs M/S Devkala Consultancy Service & Ors

The Supreme Court addressed the legality of banks rounding up interest rates by 0.25% in light of the Interest Tax Act, 1974, which was reintroduced in 1991. The Court upheld the High Court's ruling that such rounding up was illegal and arbitrary, as it resulted in banks collecting excess interest from borrowers, amounting to Rs.723.79 crores annually. The Court directed banks to account for and deposit the excess interest collected with the Reserve Bank of India, affirming the High Court's decision.