The main legal point established in the judgment is the examination of the effectiveness of the Debt Conciliation Board's certificate, the enforceability of the loan agreement, and the calculation of interest rates.

1. This appeal is by the Defendant against whom a decree for money has been passed by the Court below. The Plaintiffs' case was that they had given a loan of Rs. 3000/- to one Waikar on the 10th August 1929 and the Defendant was a surety for Waikar. The debt is based on Ticket Bahi (Exhibit P-6) and Defendant's liability arises on a letter by which he undertook to pay this amount should Waikar fail to pay it. The letter is Exhibit P-l and is also dated' the 10th August 1929. According to the Plaintiffs, this loan was to carry interest at 9 per cent per annum compound with annual rests and was to be repaid in seven months. The Plaintiffs allege that there was an agreement to enhance the rate of interest to 10 per cent per annum compound in case of default.

2. Plaintiffs state that this money was in fact received by the Defendant and though repayment was asked for, the Defendant avoided to pay this amount acknowledging his liability and asking for time on each occasion. Such letters and acknowledgments are Exhibit P-2 dated the 15th June 1932, Exhibit P-3 dated the 25th June 1932 and Exhibit P-4 dated the 30th July 1932. According to the Plaintiffs, the amount due on this debt was Rs. 3,850/- which, with interest on the date of suit, amounted to Rs. 7,800/-.

3. The Plaintiffs, in addition, claimed a further sum for which, according to them, the Defendant had executed a promissory note on the 25th June 1932. The Plaintiffs aver that the original debt was Rs. 2,500/- lent to the Defendant on the 10th June 1929 on Ticket Bahi (Exhibit P-7). This sum the Defendant was to repay with compound interest at 9 per cent per annum with yearly rests but on accounts being taken in the 25th June 1932, a sum of Rs. 1, 208/8/- was found against the Defendant and he thus executed the promissory note (Exhibit P-8). Another acknowledgment of liability was made by the Defendant on the 14th June 1935 (vide Exhibit P-5). This covered both the debts. In Exhibit P-5 there is a mention of interest on both these debts to be paid at -1121- per cent per annum compound with annual rests.

4. On the 21st September 1936 the Defendant applied to the Debt Conciliation Board at Wardha. His application is Exhibit P-14. This application was, however, dismissed on the 23rd January 1938 by an order (Exhibit P-10) in which it was held that as the bulk of the property was situated in Saoner tahsil where another Board was working, it was proper for the Defendant to make the application there.

5. On the 6th October 1938 the Defendant presented another application to the Debt Conciliation Board at Saoner (Exhibit P-15). It appears, that no notice under Section 7(2) of the Debt Conciliation Act in Form No. 3 was sent. A notice in Form No. 4 under Section 8 of the Act was. sent to the creditors to submit their statements-of claims. The order sheets of the Debt Conciliation Board proceedings at Saoner are Exhibit. P-11. On the 12th April 1939 the Board conciliated some of the debts and issued a certificate under Section 15(1) of the Act in respect of the others, including the debt of the Plaintiffs. This certificate is in dispute in the present case, the Plaintiffs contending that the certificate is ineffective for various reasons, the Defendant contending that it is effective.

6. According to the Plaintiffs, the certificate was ineffective because no notice in Form No. 3 under Section 7(2) of the Debt Conciliation Act had been sent to the creditors; there were several sham creditor's included in the list and the liability due to some others has been inflated; the amount of liability to the creditors who had agreed to conciliate debts did not amount to 40 per cent of the total liability of the Applicants-before the Board and therefore the Board had no jurisdiction to issue the certificate against the present Plaintiffs. The Plaintiffs gave details-of how the debts were inflated, as also the details of those debts which they impugned as being entirely sham. According to the