LAJBARKHAN Vs. NANHU

JUDGEMENT

(1.) 1. This is an application for revision of a decree passed by the Small Cause Court, Sohagpur, in a suit brought on a bond, dismissing the plaintiffs suit and directing them to pay Rs. 42-8-0 on accouat of surplus recoveries. The bond, on which the suit was brought, was executed on 16th January 1926 for Rs. 50-The rate of interest stipulated for was one anna per rupee per mensem and in default two annas per rupee per mensem. The suit was brought on 24th September 1923, less than three years after the execution of the bond. By that time the defendant had paid Rs. 122-8-0. The Judge of the Small Cause Court, acting on the Usurious Loans Act, reopened the transaction, found that the rate of interest stipulated for was exhorbitant and penal and, allowing interest at two per cent per annum, found that only Rs. 80 was due to the plaintiffs and give a decree to the defendant for Rs. 42-8-0 paid in excess. It is objected that the defendant never asked for this relief, but it does not seem to me that any such claim is necessary; unier Section 3(1), Usurious Loans Act the Court has power to order repayment.

(2.) IT is also objected that the plaintiffs were not allowed to show that the interest was not excessive. Reference has been made to Ruldu Mal Thakar Das v. Allah Ditta A.I.R. 1927 Lah. 621, where it is laid down that in deciding whether the rate of interest charged is excessive, the Court must have regard to the prevailing rate of interest on similar transactions in the locality, the security offered to the plaintiff, the nature of the dealings between the parties and the period during which the account was outstanding for less than three years. Periodical payments were being made by the debtor and though no security was offered and no evidence given as to the prevailing rate in the locality for loans of the description of the one now under consideration, I consider that the Small Cause Court was right in holding the rate to be excessive. Even if it were proved that it is the custom in the locality to charge interest at 75 per cent per annum and that 150 per cent, per annum in case of default, I should still hold the rate of interest to be obviously excessive. It has been pointed cut that the debt was to be repaid in three months and if that payment had been made within that period, the interest would only have been Rs. 9. It does not, however, alter the fact that it would be interest at the rate of 75 par cent per annum. I decline to interfere in revision and I dismiss the application with costs.