JUDGEMENT

KHALID, J.:- We will first deal with Civil Appeal 85/1972. The appellants were the plaintiffs in O.S. No. 78 of 1964 on the files of the Subordinate Judges Court, Palghat. The suit was based on a Kuri transaction (Chit Fund). The respondents were subscribers to the Kuri. They committed default after they had prized it and realised the Kuri amounts. Hence the suit was filed for realisation of the principal sum with interest and the balance Kuri due.

2. The suit was decreed by the Subordinate Judge by this Judgment dt. 24th June, 1965. An appeal was filed before the High Court. A Division Bench of the High Court (reported in AIR 1972 Ker 21) heard the appeal and partly allowed it by modifying the decree of the Trial Court refixing the interest, largely influenced by the fact that the Kuri transaction and the contract between the foreman of the Kuri and the subscribers (defaulted) burdened the subscribers with unconscionable interest and were unreasonable.

3. To appreciate the reasoning of the Division Bench it is necessary to set out the scheme of the Kuri. The respondents took two tickets in a Kuri (Chit Fund) started by the appellants in September, 1962. Under the scheme of