IMPORTANT POINT
The court upheld the trial Court's decree, ruling that defendants engaged in business do not qualify for debt relief under applicable laws.

JUDGMENT :

(V. Gopala Krishna Rao, J.)

1. This Appeal, under Section 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellants/defendants 1 and 2 challenging the Decree and Judgment, dated 16.01.1991, in O.S. No.88 of 1987 passed by the learned Subordinate Judge, Markapur [for short 'the trial Court']. The Respondents herein are the plaintiff and defendants 3 and 4 in the said Suit.

2. The respondent No.1/plaintiff filed a Suit for recovery of a sum of Rs.40,098.90 paise as per the account filed by the balance of principal and interest of the loan facility availed by first defendant company.

3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.

4. The brief averments of the plaint, in O.S. No.88 of 1987, are as under:

The plaintiff is a Syndicate bank a body incorporated and functioning under the banking companies Act. The first defendant is the Venkata Ramana Saw Mill and Timber Depot and second defendant is the proprietary concern of the first defendant and the second defendant represented by the first defendant executed a demand promissory note for Rs.20,000/- on 07.10.1981 and also executed relevant documents and borrowed amount from the plaintiff bank and third defendant and fourth defendants stood as a co-obligants to the debt borrowed by the defendants 1 and 2 and defendants 3 and 4 acknowledged the debts and all the defendants executed relevant documents with the plaintiff bank. The plaintiff further pleaded that despite of repeated demands made by the plaintiff bank, the defendants failed to discharge their liability. The plaintiff bank further pleaded that the defendants 2 to 4 have jointly executed a promissory note for Rs.20,000/- which was sanctioned as a working capital to the second defendant undertaking to repay the same to the plaintiff bank or its order whenever demanded with interest at 6% p.a. above the Reserve Bank of India rate subject to minimum of 15% p.a. on 07.10.1981. The plaintiff further pleaded that the defendants 2 to 4 executed a letter of authority in favour of the plaintiff bank authorizing the second defendant to operate or overdraw on the same pronote executed by them. Despite of several demands made by the plaintiff bank, the defendants failed to discharge their liability and that the plaintiff is constrained to file the suit

5. The second defendant filed a written statement, the same was adopted by the other defendants. The brief averments of the written statement filed by the second defendant are as under:

The borrowing of amount is not at all disputed by the defendants. It is also admitted that the second defendant is the proprietary concern of the first defendant mill and applying loan amount by the second defendant with the plaintiff bank is not at all disputed and the defendants are also not disputing about the execution of the relevant documents before the plaintiff bank. The defendants pleaded that they are the agriculturists within the meaning of Act 4 of 1938 and the plaintiff is not entitled to claim any interest more than the statutory rate of interest and the interest claimed is usurious and they further sought the instalment decree and they further pleaded that they want to pay the entire amount on instalments and the suit may be decreed accordingly with costs of the defendants.

6. Based on the above pleadings, the trial Court framed the following issues:

(i) Whether the defendants are entitled to the benefits of Andhra Pradesh Act of 4 of 1938?

(ii) Whether the interest claimed is usurious ?

(iii) Whether the defendants are entitled for any instalments decree?

(iv) To what relief?

7. During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 was examined and Ex.A1 to Ex.A7 were marked. No evidence is adduced on behalf of the Defendants.

8. After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 16.01.1991, again