THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 92 OF 2005 Dated: 24.02.2011 Between: E.Satyanarayana …APPELLANT AND K.Eswaraiah …RESPONDENT The Court made the following: THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.92 OF 2005 JUDGMENT: The defendant in O.S.No.21 of 2002 on the file of the Senior Civil Judge, Hindupur, is the appellant herein. 2. The suit was filed for recovery of Rs.4,33,820/- being the principal and interest due on a promissory note dated 15.06.1999 executed by the defendant for a sum of Rs.2,75,000/- payable with interest at 21% per annum. In spite of repeated demands, the defendant did not pay the money. He has also given an undertaking that he will pay the money and executed a letter on 26.03.2001, but failed to do so. 3. The defendant filed written statement. The defendant claimed that he is an agriculturist and claiming the interest at 21% per annum is excessive. 4. On the basis of the above pleadings, the following issues have been framed by the trial Court, for trial: “1. Whether the suit pronote is not supported by consideration? 2. Whether the defendant is an agriculturist and the interest claimed is correct? 3. To what relief?” 5. On behalf of the plaintiff, PW.1 was examined and Exs.A1 and A2 were got marked. On behalf of the defendant, DW.1 was examined and no documents were marked. 6. After considering the evidence on record, the learned Senior Civil Judge dismissed the suit of the plaintiff. Aggrieved by the said judgment, the present appeal is filed. 7. The points that arise for consideration are: 1. Whether the suit promissory note is not supported by consideration? 2. Whether the interest claimed by the plaintiff is excessive? 3. Whether the judgment and decree passed by the learned Senior Civil Judge, Hindupur, is legal and sustainable? 8. There is no dispute about the fact that the promissory note-Ex.A1 was executed by the defendant. Though the execution of Ex.A2 is denied, the relevancy of Ex.A2 is not necessary, since execution of the promissory note is admitted. It is not a case where the defendant has taken a blank paper theory and on the other hand, his specific plea is that on a promise that the money will be paid later, he executed a promissory note. 9. Evidently, the defendant is an innocent man and said to have been having some business and in such circumstances, it is difficult to believe that without receiving any consideration he would have executed the promissory note- Ex.A1. Even otherwise, after execution of the promissory note, no notice was given by the defendant calling upon the plaintiff to return the promissory note or to pay the money as promised under Ex.A1. Merely because the plaintiff and defendant are related distantly he does not mean that at faith a promissory note would have been executed by the defendant. The evidence of PWs.1 and 2 coupled with the presumption under Section 118 of Negotiable Instrument Act clearly establishes the liability of the defendant. 10. The learned counsel for the appellant pleads that interest of 21% per annum was claimed by the plaintiff and it is excessive and usurious. According to the case of the plaintiff, the defendant is running a rice and dall mill and the money was borrowed for business purpose and therefore, the interest charged is reasonable as per the market rate. Even if the defendant is not an agriculturist, the Court has to still consider whether the charge of interest at 21% per annum reasonable or not. There is no proof that the market rate of interest prevailing on that date is 21%. There is also no proof that the defendant has made any profit from the business. 11. Therefore, in view of the above circumstances, I find charging of interest at 21% per annum by the plaintiff and granting of the same by the lower Court appears to be usurious and onerous and taking into consideration the plea of the appellant, I feel interest of justice would meet if the interest is granted at 15% per annum instead of 21% per annum as granted by the lower Court. 12. With the above modification, the decree and judgment of the lower Court is confirmed and accordingly, the suit of the plaintiff is decreed for a sum of Rs.2,75,000/- with interest at 15% per annum from 15.06.1999 to 15.03.2002 and subsequent interest as granted by the lower Court. Accordingly, the Appeal is partly allowed. Each party do bear their own costs in the appeal. __________________________ N.R.L.NAGESWARA RAO, J February 24, 2011 Ivd