JUDGMENT :

VENKATA RAMA SASTRY, J.

1. The defendants 1 to 4 are the appellants in this appeal. This appeal is preferred against the decree in O.S. 45/65 on the file of the 1st Addl. Chief Judge, City Civil Court at Hyderabad.

2. The suit was instituted by the respondent for the recovery of a sum of Rs. 55,125/- on the basis of a registered simple mortgage bond dt. 4-10-61, executed by the appellants herein in his favour. The bond was originally executed for rupees one lakh, out of which the appellants paid a sum of Rs. 50,000/- on 29-6-65, leaving a balance of Rs. 50,000/- as due to the plain-tiff. According to the terms of the mortgage-bond the appellants agreed to pay monthly interest to the plaintiff under the mortgage-bond and paid it punctually till January, 1965 and thereafter committed default. The plaintiff therefore issued for the balance of the principal and the interest that accrued till the date of the suit. The suit was filed on 15-10-65. The hypotheca under the mortgage bond is a house property comprised in municipal No. 5-0-665 Gunfoundry, Hyderabad specified in schedule-A. The interest provided under the bond was at 9% per annum. The bond was executed and registered at Hyderabad and the defendants-appellants were residents of Hyderabad and the suit, therefore, came to be instituted in the Hyderabad court. The defendants admit the execution of the mortgage and the receipt of consideration. They however pleaded that the loan was taken for the investment by the defendants for their business, particularly for the acquisition of the land known as “Karbala Maidan” Secunderabad, that the plaintiff should wait till the complete sale of entire Karbala Maidan, that the plaintiff is aware of the steps taken by the defendants for the sale of the said property, but has unnecessarily come to court in a haste and, therefore, the suit was premature. They also pleaded that in any event, having regard to the payment of interest every month, the rate of interest charged is excessive and the debt is liable to be scaled down. They further pleaded as follows:—

“These defendants understand that the plaintiff is a money lender within the meaning of “Money Lenders Act” and the suit is therefore not maintainable”.

3. The defendants therefore, pray for the dismissal of the suit.

4. On these pleadings the Lower court framed the following issues:—

1) Whether there was any understanding that the money under the mortgage bond was payable only after the sale of the defendants property Known as “Karbala Maidan”?

2) Whether such a plea is tenable in view of the registered mortage bond 4-10-61?

3) Whether the suit is premature?

4) Whether the suit is barred as offending the provisions of the Hyderabad Money Lenders Act?

5) Whether the interest charged is excessive?

6) To what relief?

5. Issues 1, 2, 3 and 5 were not pressed by the defendants and were therefore found against the defendants. The only relevant issue that was taken up by the lower court was issue No. 4. The burden of establishing that the suit is barred by the provisions of Hyderabad Money Lenders Act, being on the defendants the first defendant examined himself as D.W. 1 and filed Exs. B-1 to B28. The plaintiff has examined himself as P.W. 1, his clerk as P.W. 2, his power of attorney agent as P.W. 4 and the Tahsildar as P.W. 3. Exs. A-1 to A-24 have been marked on his behalf.

6. On a consideration of the entire evidence and the relevant case law cited before it, the lower court held that the plaintiff is not a money lender within the meaning of section 2(7) of the Hyderabad Money Lenders Act and the suit is not liable to be dismissed under section 9 of the said Act, for noncompliance of section 3 thereof. The lower court therefore found the issue No. 4 in favour of the plaintiff and ultimately passed a preliminary mortgage decree for the suit amount with costs.

7. In this appeal, preferred by the defendants, Sri G. Seetharamaiah, learned counsel appearing for the defendants-appellants has