JANDHYALA LAKSHMINARASIMHA SASTRY Vs. KADIYALA KOTISWAMY

JUDGEMENT

(1.) These two cross appeals question the judgment and decree of the learned Additional Subordinate Judge at Tenali in O.S.No. 44 of 1978 dated 19-6-1981 to the extent they are against the appellants therein. A.S.No.1415 of 1981 is preferred by the defendant against the plaintiff in that suit and A.S.No.1785 of 1981 is preferred by the plaintiff against the defendant in that suit. These appeals are therefore heard together and are being disposed of by this judgment. The parties are referred to as in the suit.

(2.) The suit was laid on 7-6-1978 for recovery of Rs.76,268-50 Ps. being the total of the balance of the amounts together with interest due on five suit 'A' to 'E' marked pronotes (exhibited as A.1 to A.5 respectively in the suit) for Rs.30,000 Rs.26,640/-. Rs3,172/- Rs.7,349/- and Rs. 2,997 /- respectively. All the pronotes are dated 2-10-1975. They were executed by the defendant in favour of the plaintiff in renewal of prior pronotes and the principal amounts due are payable with interest at 12% per annum under the pronotes. Exs.Al and A.2 pronotes are said to be executed in renewal of the earlier pronotes dated 29-10-1969 and 2-10-1969 respectively. Ex.A.3 pronote is said to be executed in renewal of pronote dared 2-10-1969 for Rs.2,000/- payable with interest at 12% per annum. Except for the dates, the other particulars of the earlier pronotes are not stated. Exs.A.4 and A.5 pronotes are also said to be executed in renewal of earlier pronotes but even the dates of execution of those earlier pronotes are not stated in Exs.A-4 and A.5. Ex.A.l pronote contains five endorsements of part payments marked as Exs.A.13 to A.7 made during the period August, 1976 to March, 1977 totaling Rs.12,000/- and Ex.A.5 contains endorsement dated 1-3-1977 marked as Ex.A. 18 showing payment of Rs.2,500. The Plaintiff also filed along with plaint two pronotes, one dated 29-10-1969 for Rs38,000/-and another dated 29-10-1969 for Rs.2,000/- marked respectively as Exs. A.6 and A.10, both executed by the defendant in favour of the plaintiff - the interest stipulated was 12% per annum. It is alleged in the plaint that inspite of several demands by and on behalf of the plaintiff for the payment of the amounts due on Exs.A.1 to A.5, the defendant did not pay: It is also alleged in the plaint that neither the plaintiff nor the defendant are small fanners and that interest stipulated in the suit promissory notes is not liable to be scaled down and that Act 7 of 1977 does not apply to the defendant and that the plaintiff is entitled to claim interest at 12 1/2% per annum under the provisions of G.O.Ms.No,623, but claimed only 12% per annum. In his written statement, the defendant has admitted the execution of the pronotes Exs. A.1 to A.5, A.6 and A.10 and also the various part payments made thereon under endorsements marked as Exs. A.7,A.8, A.11 and A.13 to A.18. But he has claimed that he is an agriculturist as defined under the Andhra Pradesh (Andhra Area) Agriculturists Relief Act, 1938 ('the Act' for short) and that the suit debts are liable to be scaled down under the provisions of the Act. He has also alleged that the plaintiff was a professional money lender. He contends that all the pronotes were renewals of earlier pronotes relating to long standing debts. As regards Exs. A.1 and A.2 pronotes he contends that they were got executed in renewal of the debt evidenced by pronote dated29-10-1969 marked as Ex-A.6; and similarly Ex. A-3 pronote was got executed in renewal of Ex.A-10 pronote. As regards Exs.A.6 and A.10 promissory notes,he contends that they were not fully supported by consideration and that they were not executed for cash borrowed and that they were executed for the principal and interest due to the plaintiff on two earlier pronotes, both dated 29-10-1966, marked as Exs.B.2 and B.3 respectively. Exs.B.2 and B.3 pronotes were executed by the defendant and his brother J.S.Joshyulu in favour of the plaintiff for Rs 28,262-50 ps. and Rs.1,407-10-0 (Rs.1,407-62 ps) respectively, both sums payable with interest at 9%. Exs.B.2 and B3 promissory notes recite that they were executed in renewal of earlier pronotes dated 2-11-1960. It is the case of the defendant that in about April 1943 his father borrowed Rs.9,000/- from the plaintiff for the purchase of a house in Guntur in Court auction and that this was the original borrowing, to which the present debt should be traced. Defendant's father died in November, 1949. The original borrowing came to about Rs.l6,000/-by 2-8-1950. After his father's death, as manager of the joint family comprising of himself and his two minor brothers, the defendant executed a pronote in August, 1950 in favour of the plaintiff in renewal of the original borrowing. That pronote was kept alive by payments and on 2-11-1960 the defendant and his two brothers executed a fresh pronote in renewal of the balance debt due on pronote of 2-8-1950. One of the brothers, J.V. Somayajulu, died in December, 1960. Before that, the debts due to the plaintiff were being renewed by the defendant and his two brothers and thereafter by the defendant and his surviving brother J.S. Joshyulu. The defendant therefore claims that the debts due to the plaintiff have to be scaled down under Section 13 of the Act calculating interest on the original debt at statutory rates from the beginning till realisation. As regards the debts covered by Exs..A.4 and A.5 pronotes, the defendant claims that they originated in November, 1960 when a sum of Rs.2,500/-was borrowed from the plaintiff and that they have also to be scaled down with reference to the original sum borrowed in November, 1960 and the interest should be calculated only at 5 1/2% per annum giving credit to the repayment, which should be deducted from the principal amount. The defendant also relied on two other pronotes executed by himself and his brother Joshyulu in favour of the plaintiff marked as Exs.B.5 dated 26-7-1963 for Rs.6,716/- and Ex.B.10 dated 2-11-1966 for Rs.3,311-11-0 both carrying interest at 9% per annum. The defendant also claimed that in addition to part repayments made under Exs. A. 13 to A.17 endorsements in Ex.A.l, he also paid a sum of Rs.600/- on 14-8-1977 and Rs.l6,000/-on 21-8-1977 which payments were not endorsed on any of the pronotes and that they should be treated as payments under Ex.A.l pronote and that credit should be given to the said payments. According to the defendant, all repayments were open repayments and they should be deducted from the principal amount. 4. On the pleadings, the following six issues were framed by the learned Subordinate Judge:-

(3.) Whether the interest stipulated in the pronote is excessive and usurious and penal?