A. SATYANARAYANA Vs. M. PANDURANGA RAO

JUDGEMENT

(1.) The parties in the present appeal are referred as they are arrayed in the suit. The plaintiff filed a suit for recovery of Rs.2,63,832.00 with subsequent interest at 30% p.a., compounded on a yearly basis.

(2.) The case of the plaintiff is:

(3.) The defendants contested the suit by filing a written statement. In the written statement, the defendants do not appear to have disputed the loan transaction or the mortgage of the property. However, the defendants claimed that the 3rd defendant had obtained two demand drafts for Rs.45,000.00 and sought to deliver these two demand drafts along with cash of Rs.75,000.00 for a full and final settlement of the deed. As the plaintiff insisted for payment of interest calculated at 30% p.a. compounded interest from the date of mortgage, the debt could not be cleared. The defendants also took the stand that interest @ 30% compounded annually is usurious as per A.P. Act 26 of 1961 and the plaintiff cannot claim more than 18% p.a. as defendants are agriculturists and further, the receipt issued by the plaintiff in the monies paid by the 1st defendant on 5/1/1993 demonstrates that the rate of interest was only 24% p.a. and not 30% p.a.