MT. PARBATI BIBI Vs. KAMTA PRASAD AND OTHERS

JUDGEMENT

(1.) These are two connected first appeals arising out of two suits brought by the Plaintiff Respondent, Parbati Bibi, against the Appellants in the two appeals.

(2.) Both the suits were based on simple mortgage bonds executed by Chhabbu Lal in First Appeal No. 553 of 1945 and by Bisheshar Prasad, brother of Chhabbu Lal, in First Appeal No. 554 of 1945. Both the mortgage deeds were executed by the brothers on the same date, namely, 3-6-1930. They were for the sums of Rs. 2000.00 each and both of them carried interest at the rate of 71/2 per cent, per annum compoundable six monthly. The property mortgaged in the deeds were shares in Khalifa Mandi in the city of Allahabad. These mortgages had been executed in lieu of the amount due on an earlier mortgage of 7-11-1912. The suits were for the recovery of Rs. 5998/9/2 in each of the two cases. The main defence taken by the Defendants in the two suits was that the rate of interest was excessive and should be reduced. The learned Civil Judge considered the circumstances of the cases and arrived at the conclusion that the rate of interest was not excessive and there was no reason for reducing it. He accordingly decreed the suits in their entirety.

(3.) The Learned Counsel appearing for the Appellants in the two appeals have argued that the court had power to reduce the rate of interest under the Usurious Loans Act of 1918 as(sic) amended by the UP Legislature in 1934. UNDER SECTION 3 of the Act, the UP Legislature substituted the word "or" for the word "and" between Clauses (a) and (b) of Sub-section (1) of Sec. 3. The result of the amendment was that it was not necessary for the applicability of the Act that both the conditions laid down in Class (a) and (b) should be satisfied, and the Sec. would come into operation even if one of the two conditions was satisfied. The courts in the Uttar Pradesh have the power to reduce interest under the Act if they find the interest to be excessive or the transaction between the parties to be substantially unfair. There is no question in the present cases of the transactions between the parties being substantially unfair, but the Learned Counsel had argued that the interest was excessive.