Kannuri Venkata Rmakrishna Rao, vs Chodisetti Hemasankar,
2021 Latest Caselaw 5193 AP

               HON'BLE SRI JUSTICE M.VENKATA RAMANA

                    SECOND APPEAL No. 304 of 2019

JUDGMENT :

The defendant is the appellant. The respondent was the plaintiff.

2. The respondent laid the suit against the appellant on the foot of

a promissory note dated 09.09.2012 against the appellant alleging that he

borrowed Rs.4,00,000/- thereunder on that day agreeing to repay the

same with interest at 24% p.a., which he defaulted to repay in spite of

repeated demands and issuance of a legal notice on 01.05.2013.

3. The substantial defence of the appellant is one of denial of

execution of the suit promissory note while stating that father of the

respondent had obtained blank promissory notes with his signatures in

connection with sale of a house site and one such blank promissory note

was made use of to bring out the suit promissory note.

4. On the pleadings, the trial Court settled appropriate issues for

trial.

5. The parties went to trial where the respondent examined himself

as P.W.1, a third party as P.W.2 and relied on Ex.A1 and Ex.A2. The

appellant examined himself as D.W.1 and no document was marked on

his behalf.

6. Basing on the material and evidence the trial Court rejected the

defence assigning reasons and accepted the contention of the respondent

decreeing the suit.

MVRJ, S.A.No.304 of 2009

7. In the appeal, the attempt of the appellant was not successful

and the decree and judgment of the trial Court were confirmed.

8. These are the circumstances leading to presenting the second

appeal.

9. Sri S.Subba Reddy, learned counsel for the appellant, contended

that there is no material establishing that the respondent had capacity to

lend such a huge amount on the date of the suit promissory note while

referring to the evidence on record supporting the defence of the

appellant.

10. Both the Courts below considered the claims of both the

parties referring to the evidence on record and consistently came to the

conclusion rejecting the defence. Thus, there are concurrent findings on

facts. It is a factor to consider, in the appeal presented under section 100

CPC.

11. There is evidence on record from the respondent examined as

P.W.1. P.W.2 is stated to be the attestor referred in the judgment of the

trial Court. Sri S.Subba Reddy, learned counsel for the appellant, brought

to the notice of this Court P.W.2 did not attest Ex.A1 promissory note,

who is a third party to the transaction. Nonetheless, when the testimony

of P.W.2 is to the effect that he was in attendance at the time of Ex.A1

transaction along with Sri K.Ramana, the appellant, the respondent and

another Sri Chalam, it is expected that there should be cross-examination

of this witness questioning his presence at the time of the suit transaction.

Unfortunately, the tenor of cross-examination of P.W.2 was not on such MVRJ, S.A.No.304 of 2009

lines and not even a suggestion was put to this witness disputing his

presence at the time of the suit transaction.

12. Ex.A2 is the copy of legal notice issued to the appellant prior to

the institution of the suit on behalf of the respondent. No reply was issued

to it on behalf of the appellant setting out similar defence as is found in

this case. It is one circumstance that was considered by both the Courts

below questioning the veracity of the nature of defence.

13. The defence itself offered a circumstance that the signature

appearing on Ex.A1 is that of the appellant. In such circumstances,

though the appellant flatly denied the entire suit transaction, it is for him

to establish as to how his signature is appearing on Ex.A1 suit promissory

note. Apparently the signature is at the place on the suit promissory note

where it ought to be. Thereby a presumption as such can be raised in

terms of Section 114 of the Indian Evidence Act that such signature

should have been subscribed in the circumstances stated in Ex.A1 itself

basing on its intrinsic worth along with the testimony of P.W.1. In these

circumstances, rebuttal is required specifically from the appellant and

apparently he failed to establish these facts.

14. Both the Courts below took into consideration these

circumstances as factors of reckonance to reject the defence.

15. Both the Courts below also considered, basing on the

testimony of P.W.1 and P.W.2 about the capacity of the respondent to

lend and further both the Courts rightly observed that no steps were

taken by the appellant, when the father of the respondent had retained MVRJ, S.A.No.304 of 2009

blank promissory notes containing his signatures with him without

demanding their return.

16. Thus, the evidence considered and circumstances on record

are in the realm of facts.

17. In this backdrop, when the jurisdiction of this Court is

considered in terms of Section 100 CPC, there are no such questions

much less substantial questions of law sought to be raised on behalf of

the appellant in this second appeal to consider.

18. But one disturbing feature in this case is demand of interest at

24% p.a. on the principal amount. The evidence of P.W.1 itself makes out

that the appellant had borrowed from him to meet family expenses. Thus,

it is not a commercial transaction on the face of it. In such circumstances,

claiming interest at 24% p.a,. makes out that an usurious act was

adopted by the respondent in this transaction. When the transaction ex-

facie presented such a scenario of usury, the Court can reopen the entire

transaction in terms of Section 3 of the Usurious Loans Act.

19. Though there is no specific defence in this context raised by

the appellant, when the transaction is unconscionable and ex-facie

usurious, the Court is entitled to reopen the original transaction and is

empowered to scale down the rate of interest to a reasonable level. In the

facts and circumstances, if the interest claimed by the respondent is

reduced to 12% p.a. from the date of borrowing till the date of decree

and thereafter to grant interest in terms of Section 34 CPC, it meets the

ends of justice.

MVRJ, S.A.No.304 of 2009

20. Therefore, in the given facts and circumstances, except to the

extent stated above, interference with the decrees and judgments of both

the Courts below is not required.

21. In the result, this second appeal is disposed of directing

reduction of interest to 12% p.a. on Rs.4,00,000/- from the date of the

suit promissory note till 11.07.2017 and thereafter at 6% p.a. on

Rs.4,00,000/- from the date of the decree, namely 12.07.2017 till

realization. No costs. Accordingly a decree be drawn.

As a sequel, pending miscellaneous petitions, if any, stand closed.

Interim Orders, if any, stand vacated.

________________________ JUSTICE M.VENKATA RAMANA

Dt: 14.12.2021 RR MVRJ, S.A.No.304 of 2009

HON'BLE SRI JUSTICE M.VENKATA RAMANA

SECOND APPEAL No.304 of 2019

Dt: 14.12.2021

RR