THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 1042 OF 2001 Dated: 24.02.2011 Between: Malla Satyanarayana and others …APPELLANTS AND State Bank of India and another …RESPONDENTS The Court made the following: THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.1042 OF 2001 JUDGMENT: A Memo has been filed into the Court stating that the matter is settled out of Court. In view of the same, the Appeal is dismissed as settled out of Court. There shall be no order as to costs. _________________________ N.R.L.NAGESWARA RAO, J February 24, 2011 Ivd THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.3502 OF 2000 December 08, 2010 The defendant in O.S.No.2 of 2002 on the file of the Senior Civil Judge, Hindupur is the appellant herein. The suit 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%. 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 the letter on 26.03.2001, but failed to do so. Hence, the suit. The defendants 3 and 5 filed a written statement. The defendants also further claimed that he is an agriculturist and claiming the interest at 21% is excessive. On the basis of the pleadings, the following issues are framed for trail. On behalf of the plaintiff PW.1 is examined and marked Ex.A1 and A2. On behalf of the defendant, DW.1 is examined. No documents are marked. After considering the evidence on record, the Junior Civil Judge dismissed the suit of the plaintiff and aggrieved by the said judgment, the present appeal is filed. The points that arise for consideration: 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 is legal and sustainable? Points: There is no dispute about the execution of the promissory note of Ex.A1 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. Evidently, the defendant is a innocent man and said to have 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 were will be would have been executed by the defendant. The evidence of PWs.1 and 2 accept with the presumption under Section 118 of Negotiable Instrument Act clearly establishes the liability of the defendant. The learned counsel for the appellant pleads that interest of 21% was claimed by the plaintiff and it is excessive and injurious. 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 assuming for making that even if the defendant is not an agriculturist the Court has to still consider whether the charge of interest at 21% reasonable. 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. Therefore, in view of the above circumstances, I find charging of interest at 21% by the plaintiff and granting of the same by the lower Court appears to be is injurious and onerous and taking into consideration the plea of the appellant I feel interest of justice should meet to be interest is granted at 15% instead of 21% interest granted by the lower Court. With the above modification, the decree and judgment of the lower Court is confirmed. Accordingly, the suit of the plaintiff is decreed for a sum of Rs.2,75,000/- with interest at 15% from 15.06.1999 to 15.03.2002 and subsequent interest as granted by the lower Court. The Appeal is partly allowed. Each party do bear their own costs in the appeal.