1. This appeal is filed by the plaintiff against the judgment and decree dated 28.07.1997 passed in O.S.No.44 of 1990 by the Subordinate Judge, Kadiri, Anantapur District.

2. For the sake of convenience, the parties are referred to as plaintiff and defendants only.

3. The suit is filed by one Bhupalam Balasubbarayudu against the defendants for recovery of money based on a registered mortgage. The case of the plaintiff is that the first defendant in the suit borrowed a sum of Rs.50,000/- on 04.12.1978 and agreed to repay the same with interest at 18% per annum at the end of every month and in default to pay interest on interest. Evidencing this agreement and as security, the first defendant mortgaged the schedule mentioned property in favour of the first defendant and executed a registered simple mortgage deed on 14.12.1978. It is the case of the plaintiff that defendants 2 to 10 and one Annam Narasimhaiah purchased the mortgaged property under a sale deed dated 17.09.1979 and also agreed to repay the mortgaged debt to the plaintiff. The plaintiff also pleads that the new purchasers paid interest to him in discharge of the mortgage debt.

4. Since defendants 2 to 10 purchased the property, they were added as parties to the suit. As the first defendant was adjudged an insolvent in I.P.No.54 of 1980, the official receiver was added as the 16th defendant. As one of the purchasers Annam Narasimhaiah died prior to the suit, his legal representatives were added as defendants 11 to 15 in the suit. After the death of second defendant, his legal representatives were added as defendants 17 to 21. Therefore, the suit is filed for recovery of money due by sale of the mortgaged property against all the defendants. The 3rd defendant filed a written statement which has been adopted by defendants 2, 4, 11, 12, 14 and 15. The 16th defendant filed a memo stating that he has not filed a separate written statement. The written statement of 3rd defendant is to the effect that Rs.50,000/- was not borrowed and only Rs.25,000/- was borrowed. It is his case that the suit mortgage deed is devoid of consideration for the balance of Rs.25,000/-. He stated that without his knowledge the stipulation for payment of interest on interest has been incorporated in the deed. He also states that the defendant is an agriculturist and that the interest at 18% per annum is usurious.

5. Based on the above pleadings, the lower Court framed three issues for trial:

(i) Whether the mortgage deed is not supported by consideration to the extent of Rs.25,000/-?

(ii) Whether the interest claimed by the plaintiff is usurious?

(iii) To what relief?

6. For the plaintiff, he was examined as PW.1 and Exs.A.1 to A.3 were marked. For the defendants, one witness was examined as DW.1 and no documents were marked.

7. After considering the oral and documentary evidence, the lower Court came to the conclusion that the plaintiff is not entitled to interest on interest or penal interest. The Court passed a preliminary decree for Rs.1,35,597.90 paise along with future interest at 18% per annum, till the date of redemption and thereafter, at 6% per annum from the date of redemption till realization with proportionate costs. It is this judgment by which the interest is scaled down that is challenged in the present appeal.

8. This Court has heard Sri T.S. Anand, learned counsel for the appellant/plaintiff and Sri M. Prasada Rao and O. Manohar Reddy, learned counsel for the respondents/ defendants respectively.

9. The essential grounds that are urged by the learned counsel appearing on behalf of the appellant/plaintiff is that the lower Court committed a grave error in scaling down the interest and reducing the rate of interest. It is the vehement submission of the learned counsel that the respondents are experienced businessmen and they have availed a loan for their business and that therefore, the interest should be awarded at the contractual rate both as per the terms and conditions of the agr