The court's decision was influenced by the application of the Usurious Loans Act and its amendments, which justified the reduction of the excessive interest rate to 1 per cent per month.

Pollock, J—The defendants borrowed Re. 500 from the plaintiff on July 16, 1929, and executed a promissory note for this amount carrying simple interest at 1 per cent, per mensem. On December 1, 1930, no re-payment having been made in the meanwhile, the defendants executed another promissory note in renewal of the first promissory note and this carried compound interest at 2 percent, per mensem. On January 21, 1933, Rs. 350 having been re-paid in the meanwhile, the defendants executed a promissory note for Rs. 468-12-0 in renewal of the former note and this carried simple interest at 1 per cent, per mensem. The lower Court held that the interest on the second promissory note was excessive and has allowed the plaintiff simple interest at 1 per cent, per mensem, throughout.

2. The decision of the case turns mainly on the question whether the Usurious Loans (C.P. Amendment) Act, C.P. Act XI of 1931, applies. It has been contended that this Act dees not apply to Berar. The Usurious Loans Act (X of 1918) has been applied to Berar and by Notification No. 3510-I-B, dated November 3, 1913, which will be found at page 19 of the Berar Code, the Usurious Loans Act (X of 1918) is applicable to Berar in so far as it may be applicable and subject to any amendments to which the enactment is for the time being subject in the Central Provinces. The Usurious Loans Act (X of 1918) has been subject to C.P. Act XI of 1934 since June 15, 1934, and, therefore, since that date the Usurious Loans Act, has been subject to the same modifications in Berar.

3. It has next been contended the Amending Act has no retrospective effect. Under the Usurious Leans Act, as so amended, where the Court has reason to believe that the interest is excessive or the transaction as between the parties thereto substantially unfair, the Court shall exercise all or any of the following powers stated in Section 3 of that Act. When this case came before the Court that amendment was in force, and, therefore, the Court was obliged to see whether the interest was excessive or the transaction was substantially unfair and if it found, that either of these conditions was satisfied, then it was bound to exercise the following powers as stated above.

4. In these circumstances the Small Cause Court, once having come to the conclusion that the interest was excessive, was bound to exercise the above powers, and it was, therefore, entitled to relieve the defendants of all interest that it considered excessive. Under the second proviso contained in Section 3 of the C.P. Act XI of 1934, it is provided that any interest in excess of 18 percent, shall be presumed to be excessive, but that merely lays down the maximum. Here the Small Cause Court has held that the rate provided for in the first and third promissory notes was reasonable and that anything in excess of that was excessive.

5. The Small Cause Court was, therefore, justified in reducing the rate of interest to 1 per cent, per mensem simple, and the application for revision is dismissed with costs. Counsel's fee Rs. 7.

Final Result : Dismissed