The rule of Damdupat is not applicable in the state of Andhra Pradesh. The court has the discretion to reduce the interest rate under Order XXXIV Rule 11 CPC even if it is not penal, excessive or substantially unfair.

JUDGMENT

1. The defendant is the appellant herein. The above second appeal is filed against the judgment and decree dated 04.01.2021 in A.S.No.3 of 2016 on the file of V Additional District Judge, Tirupathi, confirming the judgment and decree dated 09.08.2012 in O.S.No.35 of 2011 on the file of Senior Civil Judge, Puttur.

2. For the sake of convenience, the parties shall be referred to as they are arrayed in the O.S.No.35 of 2011.

3. Suit O.S.No.35 of 2011 was filed by the plaintiff for recovery of Rs.2,48,402/-, principal being Rs.70,000/- with interest @24% p.a. from 16.08.2000 to 30.03.2011, which comes to Rs.1,78,402/-, basing on a registered mortgage.

4. In the plaint, it was contended that defendant borrowed an amount Rs.70,000/- on 16.08.2000 and executed a registered mortgage deed and agreed to pay interest @24% p.a. Since the defendant failed to repay the amount, a legal notice dated 04.02.2011 was issued and filed the suit.

5. Defendant filed written statement and contended that he never borrowed any amount and executed mortgage deed. He further pleaded that he is entitled for the benefit of Act 4 of 1938.

6. During the course of trial, plaintiff examined himself as P.W.1, got examined P.W.2 and Exs.A-1 to A-3 were marked. On behalf of defendant, defendant examined himself as D.W.1 and no documents were marked.

7. The trial Court on consideration of oral and documentary evidence vide judgment dated 09.08.2012 passed preliminary decree fixing two months' time for redemption. Aggrieved by the said judgment and decree, defendant filed A.S.No.3 of 2016 on the file of V Additional District Judge, Tirupathi. The first appellate Court, being final fact finding Court, after framing necessary points for determination, dismissed the appeal vide judgment dated 04.01.2021. Aggrieved by the said judgment and decree, the present second appeal is filed.

8. Heard Sri V.Nitesh, learned counsel for appellant.

9. Learned counsel for the appellant would contend that the appellant is an agriculturist, as such he is entitled for the benefit of Act 4 of 1938. He would also contend that contractual rate of interest @24 p.a. is excessive and prayed the Court to allow the second appeal.

10. Whether the appellant is entitled to benefit under Act 4 of 1938?

11. Whether Doctrine of Damdupat applies in state of Andhra Pradesh?

12. To prove the execution of promissory note, creation of mortgage and passing of consideration, the plaintiff examined himself as P.W.1 and got examined one of the attestors of Ex.A-1 mortgage deed, as P.W.2. Nothing contra was elicited in the cross examination of P.Ws.1 and 2, contrary to the case pleaded by them.

13. Though the defendant pleaded that he is entitled for the benefit of Act 4 of 1938, he could not establish that he is an agriculturist and cultivating the land. Defendant having pleaded that he is entitled for the benefit of Act 4 of 1938, the burden lies on him to prove the same. However, he could not adduce any convincing and cogent evidence. Having pleaded that he was cultivating the land on lease, no document was filed. Hence, the defendant is not entitled for the benefit of Act 4 of 1938 to scale down the interest.

14. With regard to applicability of Rule of Damdupat in Suryapaga Ravikumar Vs. Pakkela Ramarao and others, 2009 (5) ALT 574 the composite High Court of Andhra Pradesh held thus:

'In fact, in Syndicate Bank Vs. Guravareddy 1998 (1) ALT 735, in which the learned counsel for the appellant herein Sri T.S. Anand was Amicus Curiae assisting the Court, His Lordship Hon'ble Sri Justice B. Sudershan Reddy (as His Lordship then was) specifically considered the territorial application of the rule of Damdupat. His Lordship made it clear that the Apex Court judgment in M.R. Patil v. S.B. Rainade (supra) is not an authority for the proposition that the rule of Damdupat is applicable throughout India including State of Andhra Pradesh, but on the other hand, it is held in categorical terms that the rule of Damdupat was ne