GOGINENI RAMATULASAMMA Vs. KONGAGANTI GOWARAIAH

JUDGEMENT

(1.) The defendant is the appellant. The trial Court dismissed the suit. On appeal the judgment and decree of the trial Court were reversed and the suit was decreed As against the judgment and decree of the appellate Court, the present second appeal has been filed.

(2.) The suit is based on a promissory note Exhibit A1 dated 4th July. 1972, for the recovery of a sum of Rs 4, 200. The case is that the appellant executed the promissory note for a sum of Rs. 3,000 with interest at 12 per cent, per annum and inspite of demand the appellant did not pay the amount The defence of the appellant is that he executed a mortgage bond for a sum of Rs. 10,000 on 12th July, 1972 in favour of the son-in-law of the respondent and the respondent demanded payment of interest at the rate of 24 per cent, per annum. Since the appellant was in dire need of funds, she is coerced to agree for the usurious rate of interest. Therefore, it is her plea, that the suit promissory note though executed is not supported by legal consideration. It is also her case that she is a small farmer, entitled to the benefit of the provisions of Act VII of 1977 and thereby the suit debt stands extinguished.

(3.) After framing appropriate issues and consideration of the evidence adduced by the parties, the trial Court found that no cash consideration was paid under the suit promissory note Exhibit A-1. But since the appellant admitted that he executed the promissory note for interest at the rate of 24 per cents the suit promissory note in supported by consideration. However, it held that since the appellant is a small farmer entitled to the protection under the provisions of Act VII of 1977, the debt, by operation of section 4 of the Act, stands extinguished. Thus the suit was dismissed. In the appeal, the appellate Court held that the appellant did not prove that the suit promissory note was part of the transaction covered under the mor gage. It is also not proyed that the rate of interest is at the rate of 24% and therefore, the suit promissory note is supported by consideration. It also held that the finding of the trial Court that the suit promissory note is supported by consideration was not assailed by filing crosobjections. On the question of the appellant being a small farmer, the appellate Court received additional evidence and on the basis thereof, held that the appellant is not a small farmer. Thus it decreed the suit.