ANDHRA BANK Vs. M BUTCHAYYA CHOWDARY

JUDGEMENT

(1.) This appeal is filed by the plaintiff in O.S. No.74 of 1981 on the file of the Subordinate Judge, Bapatla, questioning the decree and Judgment dated 22-3-1983 to the extent the suit was dismissed.

(2.) The appellant is the Andhra bank at Bapatla and it had filed the suit against the defendants 1 & 2 seeking recovery of an amount of Rs.21,344-60 Ps. from them on the basis of equitable mortgage with future interest and costs, contending that the first defendant who is the son of the second defendant approached the plaintiff-Bank for crop loan and the plaintiff Bank agreed to grant such loan on the creation of security and guarantee; that the first defendant was then granted a loan of Rs.10,000/- and he executed the pronote dated 25-10-1976 along with his father who is the second defendant and who stood as guarantor; that the first defendant also executed an agreement hypothecating the existing and future crops to be raised in the land belonging to him and he also executed a mortgage deed dated 19-10-1976 and also crop hypothecation agreement dated 25-10-1976; that as per the pronote and the agreement, the defendants had to repay the loan with interest at 16% p.a. with quarterly rests; that the defendants, however, committed default in paying the loan inspite of demands; that by 27-8-1981 they became liable to pay an amount of Rs.21,344-60 Ps. at the above said rate of interest and that the suit was filed seeking recovery of the suit amount from both the defendants with future interest and costs.

(3.) The defendants contested the suit contending that they are agriculturists and they borrowed the loan for agricultural purposes; that the interest claimed by the plaintiff-Bank is usurious and penal and hit by the provisions of the Usurious Loans Act; that the interest is also liable to be scaled down as per the provisions of Act IV of 1938; that the plaintiff is alsonot entitled for the amounts claimed towards incidental charges and that the suit amount is, therefore, liable to be calculated accordingly.