Judgments
Judgments
  1. Home
  2. /
  3. High Court Of Judicature at Allahabad
  4. /
  5. 1931
  6. /
  7. January

Sheobans Rai vs Shah Madho Lal

High Court Of Judicature at Allahabad|30 March, 1931

JUDGMENT / ORDER

JUDGMENT Niamatullah, J.
1. This is a plaintiff's appeal arising out of a suit brought by him for recovery of Rs. 10,616 on foot of a promissory note, dated 8th March 1925, executed by the defendant-respondent in lieu of Rs. 7,000 advanced in cash by the plaintiff. The interest stipulated in the promissory note was at the rate of 30 per cent per annum.
2. The only defence which it is necessary to take notice of for the purpose of the appeal has reference to the high rate of interest. The defendant pleaded that the rate of interest agreed on was excessive and that it was a fit case in which the Court should reduce it to a reasonable rate. The lower Court has decreed the suit, except so far that the interest has been reduced from 30 per cant to 24 per cent.
3. The plaintiff has appealed claiming the interest at the contractual rate; while the defendant has preferred cross-objection praying for further reduction in the rate of interest. We have heard the learned Counsel on both sides, and are clearly of opinion that no interference is called for.
4. It has been argued by the learned advocate for the plaintiff-appellant that Section 79, Negotiable Instruments Act is mandatory and that a Court has no power to reduce the rate of interest entered in a promissory note. We are unable to accede to this contention. The Negotiable Instruments Act must be read with other enactments passed subsequent thereto. If under the Usurious Loans Act, which was passed after the Negotiable Instruments Act before the promissory note in question was executed the Court has a discretion to reduce interest in a proper case, there is nothing in Section 79, Negotiable Instruments Act which excludes such a discretion. The Usurious Loans Act, Section 2 (3), is applicable to all suits for the recovery of loans advanced after the commencement of that Act. It is quite general, and includes not only suits based on bonds but also on negotiable instruments. We are clearly of opinion that Section 79 does not exclude the jurisdiction of the Court conferred on it by the Usurious Loans Act.
5. The lower Court has found that 30 per cent simple interest agreed to by the defendant was unreasonable in the circumstances in which the parties were at the time the loan was advanced. Nothing has been shown to us to justify the view contrary to that of the Court below in that respect. The rata of interest which has bean allowed by the Court below is prima facie reasonable. We hold that the appeal and the cross-objection should both be dismissed. Accordingly the decree appealed from is upheld. The appeal and the cross-objection are dismissed with costs.
Disclaimer: Above Judgment displayed here are taken straight from the court; Vakilsearch has no ownership interest in, reservation over, or other connection to them.
Title

Sheobans Rai vs Shah Madho Lal

Court

High Court Of Judicature at Allahabad

JudgmentDate
30 March, 1931