The court held that a person who is primarily engaged in abkari business and uses his lands only as a step-in-aid is not an agriculturist within the meaning of Section 3 of the Usurious Loans Act, 1918.

( 1 ) APPEAL Suit No. 32/81 and Cross Objections 1. The defendant is the appellant. The respondent filed cross- objections. Admittedly, the appellant obtained a loan of Rs. 22,800/- on september 13, 1976, on a pronote Ex. A-3 and also by hypothecation of a and B schedule properties by creating an equitable mortgage for running abkari business. He committed default in payment of the amounts and for recovery thereof the respondents laid the suit for the balance amount of rs. 17,469-06 and sought for a preliminary decree. The trial court granted a preliminary decree for a sum of Rs. 13,913-35 granting 12% p. a. interest simple relieving the appellant of 17% p. a. with quarterly rests of compound interest. The Cross-objections have been filed as against the disallowing of interest and the appeal is filed against the amount of Rs. 10,000/- said to have been paid on June 26, 1976 and also for not granting counter interest.

( 2 ) MR. S. Anandareddy, learned counsel for the appellant has contended that the appellant has paid a sum of Rs. 10,000/- on June 26, 1976 but was not given credit to, but the court below has committed error in not accepting the same. I am unable to agree. In a business transaction such payment is to be made only by deposit under a voucher and duplicate receipt issued to the depositor under the business Rules of the Bank. It is an accepted fact. Admittedly, the appellant did not produce nny receipt for the alleged payment of Rs. 10,000/ -. Therefore, the court below is well justified in refusing to give credit to Rs. 10,000/- said to have been paid by the appellant on June 26, 1976. Therefore the main question that arises for consideration is, whether it is open to the Court to reopen the contract admittedly entered into by the appellant with the respondents and relieve the rate of interest. Admittedly the property hypothecated is a house situated in Bhimavaram Municipality. Section 4 (d) of the A. P. (Andhra area) Agriculturists Relief Act, 1938 (Act No. IV of 1938) (for short "the relief Act") provides that "any debt contracted on the security of house property alone in a municipality, a cantonment, or Panchayat which was a union before the 26th August, 1930". The debt and the liability is not affected though he is an agriculturist. Accordingly, the hypothecation being the property situate in a Municipality the appellant is not relieved of his liability by operation of Section 4 (d) of the Relief Act.

( 3 ) THE next question is, whether the appellant is entitled to be relieved under the provisions of the Usurious Loans Act, 1918 (Act X of 1918) (for short "the Act" ). This is amended by the Usurious Loans (Andhra Pradesh) (Andhra Area) Amendment Act, 1936 (Act No. VIII of 1937 ). The proviso (sic. amendment) to Sec. 3 of the Act provides thus :" (I) has reason to believe that the transaction was, as between the parties thereto, substantially unfair the Court shall exercise one or more of the following powers, namely, (ii) the Explanation to the same sub-section shall be renumbered as Explanation-II and the following shall be inserted as Explanation-I, namely : explanation-J:if the interest is excessive, the Conrt shall presume that the transaction was substantially unfair ; but such presumption may be rebutted by proof of special circumstances justifying the rate of interest. " (iii) to clause (b) of sub-section (2), the following proviso shall be added, namely, "provided that in the case of loans to agriculturists, if compound interest is charged, the. Court shall presume that the interest is excessive. ";. . . . . "

( 4 ) THUS a reading of these provisions would show that where a debt is contracted by an agriculturist and the transaction between the parties is substantially found to be unfair, the Court may exercise one or more of the powers given under Section 3 of the Act to re-open the transaction taken an account between the parties and relieve the debtor of all liability in respect of an