Under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993 and Section 21A of the Banking Regulation Act, 1949, is the interest component part of the debt due to a bank, and can a court reopen the agreed rate of interest as excessive?

Yes as to the first, and no as to the second. Section 2(g) defines 'debt' to include liability inclusive of interest, so the interest component is part of the debt due to the bank, while Section 21A bars a court from reopening a transaction on the ground that the rate of interest charged is excessive.

Recovery of Debts and Bankruptcy Act, 1993 — s.2(g) — s.19(2) — s.19(20) — Banking Regulation Act, 1949 — s.21A — Suspense account — Interest calculation — Non-performing asset — Recovery of Debts and Bankruptcy Act, 1993 — Suspense account — Interest component not reflected in loan account — Held: A bank's practice of maintaining a separate suspense account for interest after a loan account is classified as a non-performing asset means the interest component no longer found reflection in the loan account statement; the High Court's calculation of dues, based only on the bank's post-classification certificate and ignoring the suspense account, was an unsustainable oversimplification. (¶9, 10, 11) Recovery of Debts and Bankruptcy Act, 1993 — Debts Recovery Appellate Tribunal order restored — Held further: Since the Appellate Tribunal's calculation had taken into account the suspense account interest in determining the decretal amount, the appeals were allowed, setting aside the impugned High Court orders and restoring its order, with the appellant entitled to seek recovery of its dues by way of appropriate proceedings. (¶15)

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