JUDGMENT
N.K. Kapoor, J.
1. The plaintiff firm being not fully satisfied with the judgment and decree of the trial court has preferred this appeal.
2. The facts of the case lie within a very narrow compass. The plaintiff filed a suit for recovery of Rs. 32,750/- on the basis of pronote dated 2.1.1976. The plaintiff claimed a sum of Rs. 25,000/- as principal amount and Rs. 7750/- as interest.
3. The defendant tiled written statement denying his liability to pay the amount claimed on a number of grounds, namely, that the plaintiff firm is a money lending firm and so suit is not maintainable till the plaintiff gets a money lending licence from the authorities. The defendant further resisted the claim of the plaintiff stating that the interest claimed is too excessive. However, in the alternative, it was prayed that in case suit is decreed, he be permitted to pay the amount due in instalments.
4. On the pleadings of the parties, fallowing issues were framed:-
1. Whether the plaintiff firm is duly registered under the partnership Act and Sh. Balwant Rai and Bhushan Kumar are entitled to file the suit? OPP.
2. Whether the plaintiff firm is a money lending firm? If so, its effect? OPD.
3. Whether the defendant executed pronote and receipt dated 2.1.76 for consideration of Rs. 25,000/- in favour of the plaintiff? OPP
4. If issue No.3 is proved, whether the pronote and receipt are without consideration? OPD
5. Whether the plaintiff is entitled to recover any interest, if so, at what rate and to what extent? OPP.
6. Relief.
5. The parties were permitted to adduced evidence. Plaintiff appeared as his own witness and examined Dharam Chand, Keshwa Nand and Bhushan Kumar as PW2, PW3, and PW 4 respectively. The defendant appeared as his own witness only.
6. The trial Court on the basis of evidence came to the conclusion that the pronote and the receipt bear signatures of defendant and the same were executed for consideration. To hold it, the court placed reliance upon the books of accounts which were held to be regularly maintained by the plaintiff-Exhibit P-5 to P-8. Thus, relying upon the statements of witnesses to the promissory note and the receipt, the court came to the conclusion that a sum of Rs. 25,000/- was advanced to the defendant who in token on its correctness appended his signatures on pronote and the receipt. Accordingly, the court held that the promissory note was executed for consideration. Similarly, the court came to the conclusion that the plaintiff firm is a registered firm and that Balwant Rai and Bhushan Kumar are its partners and so entitled to file the present suit. The court found no substance in the contention of the defendant that the plaintiff firm is a money lending firm. However, while examining the case of the plaintiff with regard to interest, the court instead of awarding interest at the rate as stipulated in the promissory note i.e. 2% per month, awarded interest at the rate of 12-1/2% per annum for the period from 2.1.76 to 8.4.1977 and future interest at the rate of 6% till realisation of the amount.
7. The primary grievance of the appellant-plaintiff is that the trial court erred in law in not granting the interest at the rate which was duly agreed between the parties. According to the counsel, as per section 79 of the Negotiable Instruments Act, 1881, interest is to be calculated at the rate specified in the promissory note/receipt. Thus, according to the counsel, decree of the court deserves to be modified accordingly.
8. Having heard learned counsel for a while and on perusing the judgment of the trial court and the evidence on record, I am of the view that the appeal being devoid of merit deserves to be dismissed. Broad facts are not in dispute. The trial court has come to the conclusion that a sum of Rs. 25,000/- was advanced by the plaintiff firm to the defendant as reflected in the documents-promissory note Exhibit P-land receipt Exhibit P-4. These documents are otherwise proved according to law. The court while declining the plaintiffs claim for interest at the rate of 2% per month has taken into consideration the provisions of the Punjab Relief of Indebtedness Act and the Usurious Loans Act, 1918 as well as Volume I, Chapter 11 Part-D of the Rules and Orders of Punjab & Haryana High Court. A perusal of the aforesaid provisions makes it abundantly clear that in case the court comes to the conclusion that interest stipulated in the instrument is excessive, it is within its authority to award interest at a lower rate. Under the Usurious Loans Act, 1918, term ‘excessive’ means when the court deems it so basing its assessment on risk involved in such a transaction i.e. chances of recovery of the amount from the view point of the creditors. There has been amendment by the State of Punjab in respect of Section 3 of the Usurious Loans Act, 1918. As per amended provision, court has to deem the interest to be excessive if it exceeds seven and a half per centum per annum simple interest or is more than 2 per centum over the bank rate, whichever is higher at the time of taking the loan, in the case of secured loan, or 12-1/2% per centum per annum simple interest in the case of unsecured loans. Since in the present case loan was advanced on the basis of promissory note, trial court rightly held it to be an unsecured loan. This being the position, the trial court awarded interest at the rate of 12-1/2% per annum for the period from 2.1.1976 to 8.4.1977 i.e. from the date of filing of the suit and so calculated interest to be Rs. 3926.25.
9. The judgment in case reported as Harish Chander v. Ganga Singh and sons and others, AIR 1974 Punjab & Haryana, 156, in fact, has no applicability on the facts of the present case. In the aforesaid case the trial court awarded interest at the rate of 6% instead of 12% which was agreed rate of interest and so in the context of the case the court came to the conclusion that the trial court acted against the mandatory provisions of Section 79 of the Act. As per facts of the present case, interest claimed by the plaintiff is at the rate of 24% per annum and in view of the provisions contained in the Punjab Relief of Indebtedness Act and the Usurious Loans Act, interest beyond 12-1/2% per annum could not be granted by the court. The decision rendered by D.S. Tewatia, J. (as he then was) is clearly distinguishable and otherwise also not applicable on the facts of the present case.
10. No other point has been urged.
11. Thus, finding no merit in the appeal, the same is dismissed. No order as to costs.