The main legal point established in the judgment is the retrospective application of the Money-lenders Act and the presumption under Section 16, which requires the court to presume that any rate of interest higher than 9 per cent is excessive and substantially unfair for the purpose of the Usurious Loans Act, 1923.

( 1 ) THIS is an appeal against the judgment in R. A. 62 of 47-48 on the file of the Additional subordinate Judge, Mysore, dismissing the appeal against the judgment and decree in C. S. 601 of 45-46 on the file of the Munsiff, Nanjangud. The respondent-plaintiff filed a suit for recovery of money due on a hypothecation bond executed in his favour by the defendant appellant on 30th july 1933. One of the pleas raised by the defendant is that the rate of interest is excessive and usurious under the Usurious Loans Act and under the Money-lenders Act. It may be stated here at this stage that the rate of interest fixed in the hypothecation deed is at 12 per cent. the rate of default of regular payment being 15 per cent.

( 2 ) SECTIONS 14 to 16, Money-lenders Act are as follows:

"14. Notwithstanding anything contained in any law for the time being in force, no Court shall, in any suit brought in respect of loan advanced after the commencement of this Act pass a decree for interest at rates exceeding 9 per centum, per annum, in the cage of a secured loan and 12 per centum per annum in the case of an unsecured loan.

15. No money-leader shall recover by suit interest of any kind at a rate exceeding 6 per centum per annum with yearly rests in respect of any loan made after the commencement of this Act under a contract which provides for the payment of compound interest.

16. Where the interest charged is in excess of the rates prescribed as maximum in Sections 14 and 15, the Court shall presume for the purpose of Section 3, Usurious Loans Act, 1923, that the interest charged is excessive and that the transaction was substantially unfair. "

( 3 ) IT may be noticed that according to Section 14, Money-Lenders Act, no Court shall in any suit brought in respect of loan advanced after the commencement of the Act, pass a decree for interest at rates exceeding 9 per centum per annum in the case of secured loans, while under section 16, it has to be presumed for purposes of Section 3, Usurious Loans Act, 1923, that where the interest charged is in excess of the rate prescribed as maximum in Sections 14 and 15, the Court shall presume that the interest is excessive as the transaction was substantially unfair. It is urged that there is nothing in Section 16 to confine its application to loans advanced after the Act and that this presumption could not be of any help when a suit is brought in respect of any loan after the commencement of the Money-Lenders Act. The rate fixed under Section 14 is 9, per centum in the case of secured loans and the rate fixed in the case of unsecured loans is 12 per centum per annum while there is merely a rebuttable presumption under Section 16 that rates higher than these are usurious. It is clear that the presumption under Section 16 would be of no help to cases to which Section 14, is applicable. The fact that it is clearly stated in Section 14, that it is applicable to loans advanced after the commencement of the Money-lenders Act and the fact that no such restriction is found in Section 16 makes it clear that Section 16 is intended to apply not merely to loans advanced subsequent to the enactment of the Money-lenders Act, but also to loans advanced prior to the enactment of that Act.

( 4 ) IT will again be observed that Section 16 does not affect any substantive law; it affects a mere procedure and it lays down a rule of evidence in raising a presumption. In cases of this kind the law must be considered to be retrospective. I may here refer to the decision reported in 14 Mya. L. J. 391. It was observed in that case as follows:

"the amendment introduced by Section 6 of Regulation XVII [17] of 1928 to Section 79 of the land Revenue Code does not affect any substantive rights, it effects a matter of procedure and lays down a mere rule of evidence in raising certain presumptions under certain circumstances. It is retrospective to the extent that the Court is bound to give effect to it if by the time it ha