The burden of proof lies with the Defendant to establish discharge of debt, and the absence of clear evidence leads to dismissal of the appeal.

JUDGMENT:

T Mallikarjuna Rao, J.

1. This Second Appeal, under section 100 of Code of Civil Procedure, 1908 (for short, 'C.P.C'), has been filed by the Appellant/Appellant/Defendant against the Decree and Judgment dated 03.11.2005, in A.S.No.26 of 2004 on the file of District Judge, Nellore (for short, ‘the 1st Appellate Court’) reversing the decree and Judgment dated 18.11.2003, in O.S.No.177 of 2001 on the file of Additional Senior Civil Judge, Nellore (for short, ‘the trial Court’).

2. The Respondent/Respondent is the Plaintiff, who filed the suit in O.S.No.177 of 2001 seeking recovery of Rs.1,42,500/- being the principal and interest from the Defendant based on the promissory note.

3. Referring to the parties as they are initially arrayed in the suit is practical to mitigate confusion and better comprehend the case.

4. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:

This suit has been filed for the recovery of Rs.1,42,500/-, based on a promissory note executed by Defendant in favour of Plaintiff for Rs.75,000/- on 03.06.1998. The Defendant agreed to repay the amount with interest at 30% per annum. Despite several demands, the Defendant has failed to pay the principal and interest. The Defendant is not entitled to the protections under Act IV of 1938.

5. In the written statement, Defendant admits borrowing Rs.75,000/- from Plaintiff on 03.06.1998 for agricultural purposes, not business, and executing a promissory note with 30% interest. He claims to have settled the debt under the suit promissory note and another for Rs.60,000/- (dated 06.10.1997) by paying Rs.1,50,000/-, for which the Plaintiff issued a receipt on 08.09.1999. The Defendant paid interest for both loans but failed to continue after three months. On 01.08.1999, Plaintiff agreed to accept Rs.1,50,000/- towards full settlement, and the payment was made through J. Subrahmanyam Reddy. However, the Plaintiff did not return the promissory notes, citing they were at a relative’s house in Koduru. The Defendant, an agriculturist with Ac.4.00 cents of land, seeks relief under Act IV of 1938, requesting the interest be reduced to 12% per annum. Therefore, the Defendant seeks dismissal of the suit.

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

i. Whether the discharge pleaded by the Defendant is true, and binding on the Plaintiff?

ii. Whether the interest claimed is excessive and liable to be scaled down?

iii. To what relief?

7. During the trial, PW.1 was examined and marked Ex.A.1 on behalf of the Plaintiff. Conversely, DWs.1 and 2 were examined on behalf of the Defendant, and Ex.B.1 was marked.

8. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.1,42,500/- with interest at 30% per annum on Rs.75,000/- from the date of suit till the date of decree and thereafter at 6% per annum till realization.

9. Aggrieved by the same, the Defendant filed an Appeal in A.S.No.26 of 2004 on file of the 1st Appellate Court. The 1st Appellate Court, being the final fact-finding Court, framed the following point for consideration:

i. Whether the discharge pleaded by the Defendant is true? ii. Whether the interest claimed by the Plaintiff is excessive?

iii. Whether the Judgment and decree passed by the learned Senior Civil Judge legal and sustainable?

iv. To what relief?

10. The 1st Appellate Court, after scrutinizing the oral and documentary evidence adduced on behalf of both parties, allowed the Appeal by its Judgment and decree dated 03.11.2005. The 1st Appellate Court modified the trial Court's decree, awarding the Plaintiff Rs.75,000/- with interest at 18% per annum from 03.06.1998 until the date of the suit, followed by 12% per annum interest from the suit date to the decree date, and 6% per annum thereafter until realization. The Plaintiff is entitled to proportionate costs as awarded by the trial Court. A