JUDGMENT:

1. This second Appeal was filed under Section 100 of the Code of Civil Procedure, 1908 (for short, 'C.P.C.') against the Judgment and decree, dated 20.07.2011 passed in A.S. No.246 of 2009 on the file of learned VIII Additional District Judge, (Fast Track Court), East Godavari, Rajahmundry (for short, 'the lower appellate court'), modifying the Judgment and decree, dated 21.10.2009 passed in O.S. No.477 of 2005 on the file of learned II Additional Senior Civil Judge, (Fast Track Court), Rajahmundry (for short ‘the trial court’).

2. The parties to the Appeal are referred to as they are arrayed in O.S.

No.477 of 2005.

3. Plaintiff filed O.S. No.477 of 2005 to recover Rs.2,40,437.39ps, being the principal amount and interest due on a promissory note dated 20.10.1999 executed by the defendant in favour of the plaintiff for Rs.50,000/- agreeing to repay with interest at 30% per annum, with yearly rests for subsequent interest and costs.

4. In the plaint, it is averred that the plaintiff lent Rs.50,000/- to the defendant on 20.10.1999 by way of cheque bearing No.063092, dated 20.10.1999 drawn on Canara Bank, Gandhipuram Branch, for business and purchase of properties. The defendant, having received the said amount and executed a promissory note on the same date in favour of the plaintiff, agreed to repay the same with compound interest at 2.50 per hundred per month with yearly rests. On 18.10.2012, the defendant paid Rs.200/-, which was endorsed on the promissory note backside. Subsequently, despite the plaintiff's repeated demands, the defendant failed to discharge the debt. The defendant is a businessman who, apart from running a lodge at Innespeta, Rajahmundry, owned several properties in and around Rajahmundry. The defendant is not an agriculturist and is not entitled to benefits under debt relief laws.

5. In the written statement, the defendant refuted most of the plaint averments and asserted that in 1999, he borrowed Rs.50,000/- from the plaintiff for the purpose of purchasing agricultural land and investing in agricultural bore. At that time, at the plaintiff’s request, the defendant signed a blank promissory note, apart from subscribing the signature on the back of the first page as a security for the said debt. The defendant asserted that they had an oral agreement regarding the rate of interst which was set at Rs.1.50 paise per month per hundred. The defendant alleged that the plaintiff had fabricated the promissory note and is claiming an excessive and usurious rate of interest. The defendant also contends that he is an agriculturist and owns Ac.8.00 cents of land.

6. Based on the pleadings in O.S. No.477 of 2005, the trial Court framed the following issues:

(1) Whether the suit promissory note is true, valid and binding?

(2) Whether the payment endorsement dated 18.10.2002 is not true?

(3) Whether the plaintiff is entitled for suit claim amount?

(4) To what relief?

7. The trial Court, has re-casted issues as under by deleting the earlier issues:

(1) Whether the suit promissory note, dated 20.10.1999 is true, valid, supported by consideration and binding on the defendant?

(2) Whether the payment endorsement dated 18.10.2002 is true and binding on the defendant?

(3) Whether the rate of interest claimed by plaintiff is usurious and liable to be scaled down?

(4) Whether the plaintiff is entitled to recover the suit amount?

(5) To what relief is the plaintiff entitled?

8. During the trial, on behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A1 and A.2. On behalf of the defendant, D.W.1 was examined, and no documents were marked.

9. After the completion of the trial and hearing the arguments of both sides, the learned trial Court, by its Judgment, dt.21.10.2009, decreed the suit with proportionate costs for Rs.1,47,000/- along with interest at 12% per annum, from the date of suit till the date of decree and thereafter at 6% per annum, till the date of realization on the principal amount of Rs.50,000/-.

10. Aggrieved