K VENKANNA CHETTIAR AND SONS BY MANAGING PARTNER, K V MUTHUKRISHNA CHETTIAR Vs. KKSHAIK MUHAMMAD ROWTHER

JUDGEMENT

(1.) The only question raised in this second appeal relates to the respondent's claim to relief under the Usurious Loans Act, 1918, as amended by the Usurious Loans (Madras Amendment) Act, 1936.

(2.) The respondents who own extensive garden lands and coffee plantations in the District of Madura had dealings with the appellant, a money-lender and commission agent at Dindigul, from 1927. There were settlements of account from time to time at varying intervals at which interest was calculated at twelve per cent. per annum and added to the principal then due, the composite sum thereafter bearing interest at the same rate. At one of such settlements which took place on 22nd February, 1933, the amount due to the appellant was fixed at Rs. 17,000 and a promissory note for that sum was executed by the respondents. There were no further advances after that date but some repayments were made. On 30 November 1935, the balance due was settled at Rs. 21,375 for which another promissory note was given in discharge of the earlier note. On 15 March, 1937, the respondents sold certain immovable properties to the appellant for Rs. 20,000 out of which Rs. 19,500 was adjusted towards She debt due under the promissory note. There was a final settlement on 11 July, 1937, at which the sum due to the appellant, after deducting the sale price adjusted as aforesaid and Rs. 2,500 remitted on the occasion, was fixed at Rs. 4,000, and it was further agreed that, if the respondents repaid on or before 30 March, 1940, this sum together with Rs. 20,000 the sale price and the rents if any due for the lands which were then leased to the respondents, the lands should be reconveyed to them by the appellant, but if they made default in such payment, the appellant should enjoy the lands absolutely and recover the balance of Rs. 4,000 with interest as provided in the promissory note of 1935 as well as the unpaid rents, if any, due under the lease. The respondents having made default, the appellant has brought the suit for recovery of Rs. 4,000 with interest from nth July, 1937.

(3.) The Courts below held that the respondents were agriculturists within the meaning of the Usurious Loans Act, 1918, as amended in Madras (hereinafter referred to as the Act), the compound interest at twelve per cent. having been charged, the interest must be presumed to be excessive and the transaction unfair, that no special circumstances were proved to rebut the presumption and that, therefore, the respondents were entitled to relief under the Act. They accordingly reopened the accounts already settled between the parties and, allowing only simple interest at the agreed rate of twelve per cent. throughout and reappropriating the payments on that basis, passed a decree for the amount found due to the appellant.