1. The finding of the lower appellate Court on the issue remitted by our order of remand, dated 11th February 1929, is that the interest stipulated for in the mortgage deed sued on by the appellant, namely, Rs. 2-12-0 per cent. per month compoundable every half year, is not excessive and unfair as between the parties. It is based on certified copies of two mortgage deeds produced before the lower appellate Court by the appellant. No other evidence of any kind, oral or documentary, was adduced by either party. We are unable to accept the finding, inasmuch as, the evidence, on which it is based, is wholly inadmissible. The original mortgage deeds have not been accounted for, nor has the execution of any of them been proved by anything in the nature of formal evidence. The respondents did not enter appearance before the lower appellate Court, and the appeal before us has been heard ex parte. It cannot, therefore, be assumed that the genuineness of the deeds is admitted by him. The circumstances under which they were executed by the parties to them when they entered into the transactions carrying interest at the high rates mentioned in the deeds are matters of pure speculation. Such rates cannot be accepted as any guide for the determination of the question whether considerations enjoined by the Usurious Loans Act do or do not hold good in the case before us. We cannot, therefore, act upon the finding that has been returned by the lower appellate Court.
2. In the absence of any finding of fact binding upon this Court on the issue remitted by our order of remand, we have now to decide it for ourselves on such materials as are obtainable from the record before us. The rate of interest which is insisted on by the appellant, is on the face of it excessive. Section 3(2)(a), Usurious Loans Act explains excessive interest to mean interest:
which is in excess of that which the Court deems to be reasonable, having regard to the risk incurred as it appeared, or must be taken to have appeared, to the creditor at the date of the loan.
3. There is absolutely no evidence in the case suggesting that the creditor expected to run any unusual risk in advancing the money on the security of the property which the debtor was willing to hypothecate and did hypothecate. That the security is ample is apparent from the anxiety of the appellant to obtain a decree for the whole amount of mortgage money, including interest and compound interest at the stipulated rate. The rate of interest awarded by the Court of first instance namely 24 % per annum simple, did not satisfy him, and he has considered it worth his while to carry the matter before two Courts of appeal. It follows that the appellant himself regards the security to be ample for the accumulated amount of principal and interest which he now claims. It must have been regarded by him as amply sufficient on 1st March 1919, when the mortgage deed in suit was executed.
4. As to whether the transaction was 'substantially unfair.' Section 3(2)(d), Usurious Loans Act provides that the Court shall take into account all the circumstances materially affecting the relations of the parties at' the time of the loan. An explanation is added to the effect that interest may of itself be sufficient evidence that a transaction was substantially unfair. Having regard to the abnormally high rate of interest which the debtor agreed to pay, we are of opinion that the provision above referred to makes it permissible, under the circumstances of this case, to infer that the transaction was substantially unfair. It is true that the high rate of interest is not necessarily to be regarded as excessive or substantially unfair. It is open to the creditor to adduce evidence of circumstances tending to show that the prevailing rate of interest in the locality from where the parties come is the same or nearly the same as has been agreed to in the particular case, or that, under the circumstances in which the loan was advanced, the high rate of interest was justified in view of the risk to which the creditor was exposed, making the transaction a substantially fair one. We afforded an opportunity to the appellant by our order of remand to establish exceptional circumstances of the kind we have illustrated. He has failed to adduce any evidence justifying the excessive rate of interest and showing that the transaction was a fair one between the parties at the date of the transaction.
5. For the reasons stated above, we are of opinion that the case calls for no interference with the decree passed by the Court below. This appeal is, therefore, dismissed. The respondent not having put in appearance, we make no order as to costs of this appeal. The orders of the Courts below as regards costs incurred before them will stand.