SV L SV SEVUGAN CHETTIAR Vs. CHINNASAMI REDDIAR

JUDGEMENT

(1.) The only question in this appeal preferred by the plaintiff who sued to recover the amount due for principal and balance of interest on a promissory note dated 24th July 1930 executed by defendant 1 and others in his favour for Rs. 4600 is whether the defendants are entitled to any relief under the Usurious Loans Act. The suit promissory note carried interest at 24 per cent. per annum. It is common ground that this promissory note represents the final transaction in a series of transactions between the parties beginning in 1922, In that year there were two promissory notes executed by defendant 1 in favour of the plaintiff for Rs. 1000 each, Exs. P. 4 and P. 5. Under these promissory notes the rate of interest was also 24 per cent. per annum. They were consolidated into a single promissory note on 20th September 1924, Ex. P. 6, for Rs. 2000. On 12th April 1927. for the amount due under the promissory note of 1924 both for principal and balance of interest, another promissory note for Rs. 3750 was executed carrying interest at 24 per cent. per annum. It is in renewal of this promissory note that the suit promissory note was executed on 24th July 1930 for Rs. 4600 which included the principal and the balance of interest due under the promissory note of 1927. The defendants pleaded that they were agriculturists entitled to the benefits of Madras Act IV [4] of 1938 and also pleaded that in any event they would be entitled to the benefits of the ptovisions of the Usurious Loans Act because the interest claimed was excessive. The learned Subordinate Judge rejected the former plea but accepted the latter and granted a decree for Rs. 2000 with interest at the rate of 12 per cent. per annum from the respective dates of the two promissory notes, Exs. P. 4 and P. 5, after giving credit to the payments made from time to time.

(2.) The plaintiff, who is the appellant, contends that the lower Court had no power to give the defendants the benefit of the Usurious Loans Act in the way in which it has done. Firstly he contended that the rate of 12 per cent, is too low and at least 15 per cent, should have been allowed as a substantially reasonable rate. The rate charged by him on the different promissory notes was 24 per cent, and that rate the plaintiff does not claim in appeal. He claims only 15 per cent. The lower Court has awarded 12 per cent The question is whether there is any ground for interfering with the rate awarded by the lower-Court. The learned Subordinate Judge has given, in our opinion, sound reasons for awarding a rate of 12 per cent. There was obviously not much risk incurred by the plaintiff and it must be specially mentioned that the day after the execution of the suit promissory note, the plain Clausetiff obtained a security bond from the defendant 1 in respect of it. In Narasimhan v. Premayya 1945-1 M. L. J. 219 : (A. I. R. (32) 1945 Mad. 196), only 9 per cent, per annum was awarded; but as that was a case of a second debt, we do not think that it furnishes much assistance to the present case. We confirm the rate of 12 per cent awarded by the Court below.

(3.) It was next contended by learned counsel for the plaintiff that the lower Court had no power to apply Section 8(1)(ii) of the Act. In so far as it is relevent for this appeal that provision runs thus, as amended by Madras Act VIII [8] of 1937: