Andhra Pradesh High Court - Amravati

S. Mohan Raju vs S. Balakrishna on 15 September, 2022

         HON'BLE SRI JUSTICE SUBBA REDDY SATTI

                 SECOND APPEAL No.147 of 2022

JUDGMENT:-

      Defendant in O.S.No.415 of 2016 filed the above second

appeal against the judgment and decree, dated 12.10.2018

passed in A.S.No.99 of 2017 on the file of learned X

Additional     District   Judge,   Tirupathi,   Chittoor   District

whereby Appellate Court modified the interest granted in

decree     and    judgment,    dated   24.04.2017     passed    in

O.S.No.415 of 2016 on the file of Senior Civil Judge, Puttur,

Chittoor District.


2.       For the sake of convenience, the parties to this appeal

are referred to as they are arrayed in O.S.No.415 of 2016.


3.    Plaintiff filed O.S.No.415 of 2016 against the defendant

for recovery of amount of Rs.11,53,334/-, principal being

Rs.8,02,000/-.


4.    In the plaint, it was contended inter alia that defendant

borrowed an amount of Rs.8,02,000/- from the plaintiff on
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29.05.2010 and executed unregistered simple mortgage deed

and agreed to pay interest at 24% per annum; that defendant

made part payments of Rs.4,35,000/- on 27.05.2013,

Rs.2,00,000/- on 03.08.2015, Rs.20,000/- on 01.05.2015,

Rs.50,000/- on 10.08.2015 and Rs.1,00,000/- on 17.12.2015

and plaintiff acknowledged receipt of the same; that the

defendant failed to pay the remaining amount; that on

29.06.2016, plaintiff got issued legal notice calling upon the

defendant to discharge his debt; that defendant having

received notice did not comply with the same. Hence, suit is

filed for recovery of amount.


5.    Defendant   filed   written   statement   and   inter   alia

contended that defendant paid part payments as pleaded by

the plaintiff; that defendant also borrowed another amount of

Rs.2,00,000/- on 05.07.2010; that he executed promissory

note for Rs.3,00,000/- on 06.07.2013 in favour of wife of the

plaintiff; that he also executed another promissory note in

favour of plaintiff's wife for Rs.6,25,000/-; that defendant
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requested    plaintiff   to   return   promissory   note,   dated

05.07.2010 and non-judicial stamp paper, dated 29.05.2010;

that the plaintiff did not return the same; that defendant

pleaded that he executed promissory notes for Rs.3,00,000/-

on 06.07.2013 and for Rs.6,25,000/- on 29.05.2015 without

any consideration, as such defendant is not liable to pay any

amount under the present unregistered mortgage deed; that

plaintiff's wife filed O.S.No.20 of 2016 and that defendant is

also entitled for scaling down of interest.


6.     Basing on the above pleadings, the trial Court framed

the following issues for trial:


     1. Whether the defendant gave promissory notes to the

       wife of plaintiff or repayment of due amounts under

       unregistered suit mortgage deed?


     2. Whether the defendant is not liable to pay any amounts

       under unregistered mortgage deed?
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     3. Whether the plaintiff is entitled for recovery of suit

       amount as prayed?


     4. To what relied?


7.     During the trial, plaintiff examined himself as PW1 and

got marked Exs.A1 to A5. On behalf of defendant, he himself

was examined as DW1. No documents were marked.


8.     The trial Court on consideration of evidence partly

decreed the suit with proportionate costs. Interest @ 4% per

annum was awarded on principal amount from the date of

Ex.A1 i.e. 29.05.2010 till the date of realization, after

deducting the payment made by the defendants in an amount

of Rs.8,05,000/-. Plaintiff filed A.S.No.99 of 2017 on the file

of learned X Additional District Judge, Tirupathi, challenging

the judgment and decree of the trial Court regarding

awarding interest of 4% per annum.


9.     The lower    Appellate Court, after   considering the

provisions of Andhra Pradesh (Andhra Area) Agriculturists
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Relief Act, 1938 (Act No.4 of 1938) (for short 'Agriculturists

Relief Act'), partly allowed the appeal and modified interest

from 4% to 12.5% per annum. Aggrieved by the said

judgment and decree, defendant filed the above second

appeal.


10.   Heard Sri Mahadeva Kanthrigala, learned counsel for

the appellant and Sri O. Udaya Kumar, learned counsel for

the respondent.

11. Learned counsel for the appellant would contend that

appellant is agriculturist and hence, the interest awarded at

4% would not have been modified to 12.5% per annum. He

would further contend that the defendant by placing evidence

proved that he is an agriculturist. Thus modifying interest by

the appellate court requires reconsideration.

12. Learned counsel for the respondent supported the

judgment of the appellate Court.

13. The following substantial questions of law arise for

consideration:

"Whether the appellant is entitled to scale down interest as per provisions of Agriculturist Relief Act?"

14. Plaintiff filed suit for recovery of Rs.11,55,334/-, being

the balance amount due under Ex.A1 along with interest at

24% per annum from the date of suit till realization. Plaintiff

admitted that defendant paid part amounts on different

dates.

15. In the written statement, defendant did not take a plea

that he is small farmer. Defendant did not file any document

to prove that he is a small farmer. The suggestion put in

cross-examination of PW1 that defendant is a small farmer,

was relied upon by the trial Court for concluding that

defendant is agriculturist and hence, interest is to be scaled

down.

16. In the cross-examination of DW1, it was elicited that he

possesses Ac.3-50 cents of land and he executed registered

mortgage deed, dated 27.01.2012 in respect of property in

favour of Suryakantam.

17. It is appropriate to extract Section 13 of the

Agriculturist Relief Act, which deals with scaling down of the

interest.

"13. Rate of interest payable by agriculturists on new loans. - In any proceeding for recovery of a debt, the court shall scale down all interest due on any debt incurred by an agriculturist after the commencement of this Act, so as not to exceed a sum calculated at 6 ¼ per cent per annum, simple interest, that is to say, one pie per rupee per mensem simple interest or one anna per rupee per annum simple interest;

Provided that the State Government may, by notification in the Official Gazette, alter and fix any other rate of interest from time to time.

18. The Government of Andhra Pradesh published gazette

notification and as per A.P. Gazette, R.S. to Part II, dated

06.10.1977, the rate of interest was enhanced to 12.5% from

07.10.1997. Thus, the rate of interest payable by agriculturist

is modified from 6¼% per annum to 12½% per annum.

19. According to the plaintiff, promissory note was executed

on 29.05.2010 and in fact he claimed interest at 24% per

annum. However, trial Court granted 4% per annum on

principal amount. Lower appellate Court, as per A.P. Gazette,

R.S. to Part II, dated 06.10.1977 i.e. notification, dated

06.10.1997, enhanced the interest to 12.5% per annum by

modifying 4% interest as awarded by the trial Court.

20. The lower appellate Court being final factfinding Court,

on appreciation of legal facts, allowed the appeal. The scope

of section 100 CPC is no longer res integra. The Hon'ble Apex

Court in Hero Vinoth Vs. Seshammal1, held thus:

"19. It is not within the domain of the High Court to investigate the grounds on which the findings were arrived at, by the last court of fact, being the first appellate court. It is true that the lower appellate court should not ordinarily reject witnesses accepted by the trial court in respect of credibility but even where it has rejected the witnesses accepted by the trial court, the same is no ground for interference in second appeal when it is found that the appellate court has given satisfactory reasons for

AIR 2009 SC 1481

doing so. In a case where from a given set of circumstances two inferences of fact are possible, one drawn by the lower appellate court will not be interfered by the High Court in second appeal. Adopting any other approach is not permissible. The High Court will, however, interfere where it is found that the conclusions drawn by the lower appellate court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the Apex Court, or was based upon inadmissible evidence or arrived at by ignoring material evidence.

It was furthermore held:

23. To be "substantial" a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law "involving in the case" there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and

involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis. (See Santosh Hazari v.

Purushottam Tiwari MANU/SC/0091/2001).

24. The principles relating to Section 100 CPC, relevant for this case, may be summerized thus:-

(i) ...

(ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law."

21. In second appeal, this Court while exercising

jurisdiction under Section 100 of the CPC, must confine to

the substantial question of law involved in the appeal. This

Court cannot re-appreciate the evidence and interfere with

the findings of the Courts below where the Courts below

recoded the findings judicially by appreciating both oral and

documentary evidence. Further the existence of substantial

question of law is the sine qua non for the exercise of

jurisdiction. This Court cannot substitute its own opinion

unless the findings of the Court are manifestly perverse and

contrary to the evidence on record.

22. Since the Lower Appellate Court considered the interest