VENKATASUBBASETTY Vs. SAHUKAR M SRASAVANNA DEVARU

JUDGEMENT

(1.) This is an appeal against the judgment in R. A. 62 of 47-48 on the file of the Additional subordinate Judge, Mysore, dismissing the appeal against the judgment and decree in C. S. 601 of 45-46 on the file of the Munsiff, Nanjangud. The respondent-plaintiff filed a suit for recovery of money due on a hypothecation bond executed in his favour by the defendant appellant on 30th July 1933. One of the pleas raised by the defendant is that the rate of interest is excessive and usurious under the Usurious Loans Act and under the Money-lenders Act. It may be stated here at this stage that the rate of interest fixed in the hypothecation deed is at 12 per cent. the rate of default of regular payment being 15 per cent.

(2.) Sections 14 to 16, Money-lenders Act are as follows:

(3.) It may be noticed that according to Section 14, Money-Lenders Act, no Court shall in any suit brought in respect of loan advanced after the commencement of the Act, pass a decree for interest at rates exceeding 9 per centum per annum in the case of secured loans, while under Section 16, it has to be presumed for purposes of Section 3, Usurious Loans Act, 1923, that where the interest charged is in excess of the rate prescribed as maximum in Sections 14 and 15, the Court shall presume that the interest is excessive as the transaction was substantially unfair. It is urged that there is nothing in Section 16 to confine its application to loans advanced after the Act and that this presumption could not be of any help when a suit is brought in respect of any loan after the commencement of the Money-Lenders Act. The rate fixed under Section 14 is 9, per centum in the case of secured loans and the rate fixed in the case of unsecured loans is 12 per centum per annum while there is merely a rebuttable presumption under Section 16 that rates higher than these are usurious. It is clear that the presumption under Section 16 would be of no help to cases to which Section 14, is applicable. The fact that it is clearly stated in Section 14, that it is applicable to loans advanced after the commencement of the Money-lenders Act and the fact that no such restriction is found in Section 16 makes it clear that Section 16 is intended to apply not merely to loans advanced subsequent to the enactment of the Money-lenders Act, but also to loans advanced prior to the enactment of that Act.