1. This is a first appeal by defendants 1 to 4 out of six defendants. The suit was brought by Mt. Ganga Dei, widow of Shankar Lal, as the sole plaintiff for enforcement of a hypothecation bond dated 25th November 1927, executed by Dr. Gul Ahmad, father of the six defendants, of whom three are sons and three are daughters. The bond was for Rs. 15,000 sat 13 annas per cent, per mensem compound interest with six monthly rests. The property mortgaged consisted of house property in the city of Meerut. Dr. Gul Ahmad is dead the lower Court decreed the suit in lull for the plaintiff.
2. The main point taken by the appellant-defendants is that they are agriculturists and are on titled to the benefits of Sections 5 and 30, U.P. Agriculturists' Relief Act. The Section 5 to which they refer is not correct and Section 3 is intended. This is the main argument in the appeal before us. In Section 3 there is provision for the Court to allow instalments in passing a decree, and in Section 30 there is provision for reduction of the interest on a loan to certain rates in the Schedule. The claim of the appellants is that their father Dr. Gul Ahmad and the appellants both come under the definition of an agriculturist in Section 2(2)(f) of the Act as persons who pay rent for agricultural land not exceeding Rupees 500 per annum. Under Section 8(1) of the Act it is provided as follows:
No person shall be deemed to be an agriculturist for the purposes of this Chapter unless he was an agriculturist both at the time of the advance of the loan as well as at the date of the suit.
3. It is necessary therefore for the defendants to prove two things : (1) that Dr. Gul Ahmad was an agriculturist on 25th November 1927, the date of execution of the hypothecation bond; (2) that the defendants were agriculturists at the date of the suit on 18th July 1936. Evidence was produced on both points by the defendants and the evidence has not been believed by the Court below. The evidence has been laid before us by learned Counsel for the appellants. In regard to Dr. Gul Ahmad it is admitted by D.W. Khalil Ahmad, on page 7, line 29 that Dr. Gul Ahmad was a dentist in Meerut. It is alleged by this witness that he had some zamindari near the Delhi Gate of Meerut and a grove and that he used to carry on cultivation of khudkasht and had ploughs and cattle. D.W. Jagannath, on p. 6 states that he has been the patwari of Meerut which is the agricultural village in question for the last 13 years before his deposition in 1936 and that would take him to 1923 and therefore cover the year in question of the execution of the document in November 1927, which was the Fasli year 1335. Jagannath states that Dr. Gul Ahmad used to cultivate land through his labourers. He does not confirm the statement of Khalil Ahmad that Dr. Gul Ahmad was a zamindar or had khudkasht. On the top of p. 7 the patwari says that he cannot give the numbers of the plots which Dr. Gul Ahmad used to get sown by his labourers, nor can he give the year when this was done. The patwari says that the plots in question were outside the Delhi Gate of Meerut. A list of zamindars in this qasba Meerut is printed on pages 23 and 24 but it does not give the members of this family as holding any zamindari share. For Dr. Gul Ahmad reliance was placed by learned Counsel on three documents. On page 25 there is an extract of the khasra of qasba Meerut for 1334-F (wrongly printed as 1335-P). This shows three numbers of which khasra No. 1321, area 1 bigha 19 biswas was sown with fodder (chari juar) and the tenant in chief was Azizul Haq, the sub-tenant was Abdur Eahman Sheikh. Both of these persons were entered 'as heretofore,' that is they had been previous tenants. In the column of remarks there is the following entry:
Gul Ahmad, son of Muhammad Bakhsh Sheikh of the village under-sub-tenant on a rent of Rs. 15 a year.
4. There are two other numbers entered, 3096 and 3097, area 1 biswa and 17 biswas. These are both shown in col. 22 as land which was without crop and Gul Ahmad is shown as the under-sub-tenant on a rent of Rs. 7 for one year. On page 27, there is an entry from the khasra for the following year 1335-F, which shows 'as again grown in No. 1321 and Gul Ahmad Sheikh as heretofore in the column of remarks.' This indicates that he was again the under-sub-tenant. The same entry is repeated in 1336-P, with the difference that the crop grown was brinjals which were irrigated from some well. Now the criterion laid down in the Act for an agriculturist is the payment of rent for agricultural land. Two questions arise in this connexion. Is it proved that the land was agricultural land and is it proved that rent was paid by Gul Ahmad for it? If the entry is correct Gul Ahmad would pay his rent to Abdur Rahman who is shown as the sub-tenant of No. 1321 and Gul Ahmad would pay his rent for the other two numbers to Shahzad Zarigar who is shown as the sub-tenant of these two numbers. Neither of these two persons are produced to prove that there was any such payment of rent by Gul Ahmad and no reason is given for their non-production. The originals of these khasras are in the tahsil. It is a very remarkable point that the patwari says that he is not able to give the numbers of the plots.
5. Now if these entries were genuine entries the defence might have proved this by sending for the original khasras from the tahsil and showing them to the patwari and asking him if those entries in the column of remarks of the name of Gul Ahmad were in his handwriting. It would also have been apparent to the Court whether those entries were or were not in the same handwriting as the rest of the entries. This course was not adopted by the defence. It is obvious that it is quite possible to have such an addition made to column 23 of the khasra by an unauthorized person because in the case of an under-sub-tenant the entry is not carried into a corresponding entry in the khatauni. In the case of tenants and sub-tenants the entries are carried from the khasra into the khatauni and therefore an alteration in the khasra would have to be accompanied by a corresponding alteration in the khatauni. We have noted that the patwari is vague about this matter of Dr. Gul Ahmad as the patwari does not know the numbers although the numbers are supposed to have been entered by the patwari. The other witness, Khaiil Ahmad, is still more vague because he stated that Dr. Gul Ahmad was a zamindar and that is obviously incorrect and is not supported by the patwari. It appears to us that it is not proved that Dr. Gul Ahmad did cultivate these numbers at all. Apart from that it would appear that the alleged cultivation was merely of fodder in one case and of vegetables in another and it does not appear that such cultivation would make a land agricultural within the meaning of the Agra Tenancy Act, 1926. The Agriculturists' Relief Act, Section 2(9) states that 'land' shall have the same meaning as in the Agra Tenancy Act of 1926. Now that Act in Section 3(2) states that 'land' does not include land for the time being occupied by dwelling houses or manufactories or appurtenant thereto.
6. Dr. Gul Ahmad was a dentist residing in Meerut. If he had a plot of land for growing fodder and vegetables it would appear prima facie that such a plot of land was merely appurtenant to his house as a garden, whether that garden was adjoining his house or at a distance. The use of a small put of land for such a purpose certainly does not imply that the man who uses it is using it for agricultural purposes. Such a use is not for agricultural purpose but for horticultural purpose. We now come to the evidence designed to show that the defendants were agriculturists at the date of suit, 18th July 1936. This evidence' consists partly of a document Ex. D on page 21 which purports to be a lease executed by one Abdul Hamid in favour of defendant 1 who is of full age and his two minor brothers under the guardianship of Rashid Ahmad. This sets out that two numbers in area 1 bigha 13 biswas were leased for one year on Rs. 20 rental for cultivation to these defendants. There was an entry of these two numbers originally as 1295 and 1798, and 1295 is obviously altered to 1795. The lease purports to have been executed on 20th June 1925. Abdul Hamid who was the alleged grantor of the lease is not produced and no explanation is given. His name is shown as one of a large number of cosharers in holding No. 2 of the khewat Ex. E on pages 23 and 24. D.W., Wahid-ud-din, on page 8 states that he is the scribe of this lease, but he denies that he made any correction in the papers. Now as the lease was for one year, 1343-F, it terminated on 30th June 1936. The suit was brought on 18th July 1936 and even if the lease had been genuine its period had terminated before the suit began. The only evidence of any actual cultivation was given by D.W., Rashid Ahmad, and he stated that the lease was executed in his presence and said:
These plots have not yet been cultivated (then said), some jao crop was raised on them.... There is no crop on these plots now. I do not know what is kharif or rabi. The crop was raised on these plots about four months ago. The Jo crop was sown on both these plots. The crop of Jo was cut about four months ago. The Jo crop was cut in July 1936 and it was sown three or four months before. I am the guardian ad litem of defendants to 3. I have maintained an account of raising this crop. I spent about Rs. 10 over this cultivation. I cannot produce that account today.
7. The deposition was given on 28th October 1936. The Court below has pointed out that it is absurd to say that barley which is a winter crop grown in the rabi could possibly be cut in July. Obviously, the witness is a stupid person who is telling stupid lies. We agree with the Court below that it is not proved that the defendants were agriculturists at the time of the suit. The case therefore for the application of the Agriculturists' Relief Act has not been established by the defence and the appeal on this point must fail. There remains one further point in regard to the rate of interest the lower Court was extremely brief on this point and merely stated:
I do not see how the rate of interest was excessive. No evidence has been adduced by the defendants on this point.
8. We consider however that the matter may be approached from the point of view of a ruling of this Court in Gajraj Singh v. Muhammad Mushtaq Ali (1938) 20 A.I.R. All 913, where it is laid down on p. 173 in regard to the number of cases:
But in oar opinion they furnish a sufficient guide to us for holding that prima facie and in the absence of special circumstances to the contrary the rate 12 par cent, per annum may be taken as a four, proper and reasonable rate.
9. On p. 172 there is a reference to the rate of 12 par cent, per annum simple in the absence of special proof of legal necessity as laid down by their Lordships of the Privy Council in Narain Das v. Abinash Chandar (1922) 9 A.I.R. P.C. 347. We may also refer to the ruling in Ram Bujhawau Prasad Singh v. Nathuram (1923) 10 A.I.R. P.C. 37 where their Lordships upheld the same rate 1 per cent, per month simple interest as a fair commercial rate in the absence of special circumstances justifying a higher rate. In these cases it appears that the Courts based their conclusion that this 12 per cent, simple interest per annum was a fair rate on taking judicial notice of the circumstances of commerce. Learned Counsel argued that this was a matter for the defence to prove by producing evidence. We do not think that this has been the view of the Courts which we have mentioned, that is, their Lordships of the privy Council and the Allahabad High Court the particular ruling in question reported in Gajraj Singh v. Muhammad Mushtaq Ali (1938) 20 A.I.R. All 913 has been followed in the following unreported cases by this Court : F.A. No. 532 of 1934 Jagun v. Rameshar First Appeal No. 532 of 1934 decided on 11th November 1937 and F.A. No. 175 of 1933 Mt. Sundae Kuar v. Gokaran Nath, First Appeal .No. 175 of 1933 decided on 23rd April 1936. Turning to the Usurious Loans Act, Act 10 of 1918, Section 3(1) lays down 'where the Court has reason to believe (a) that the interest is excessive' the Court may reduce the rate. Now the expression 'reason to believe' does not require that there should be evidence on the point before the Court. It is sufficient that the Court should have reason to believe by taking judicial notice under the appropriate provisions of the Evidence Act. Accordingly we apply the dictum of this ruling : Gajraj Singh v. Muhammad Mushtaq Ali (1938) 20 A.I.R. All 913. It is therefore on this principle for the plaintiff to show that, there were special circumstances under which a higher rate was justified. Learned Counsel for the plaintiff alluded to the fact shown by the mortgage deed on p. 16 that the major portion of the sum advanced was taken for the purpose of paying off a mortgage decree in Suit No. 115 of 1927 against Dr. Gul Ahmad. Now if a higher rate is to be justified on the ground of the necessity of Dr. Gul Ahmad in paying off this decree, this would indicate that the mortgagee took advantage of the difficult circumstances in which the mortgagor was placed and accordingly extracted a higher rate. The dictum in the ruling is not intended to justify a higher rate on such grounds. On the contrary in our opinion what the dictum means is that circumstances which would justify a higher rate are for example the fact that the security offered was of doubtful value and the mortgagee might well expect a higher rate because he ran the risk of not getting back his principal. In the present case the property mortgaged was house property in the city of Meerut and the sum advanced was Rs. 15,000. The plaintiff has allowed the mortgage to run from 1927 to 1936, a period of nine years, and the interest which she now claims has accumulated to about Rs. 20,000 more than the original principal of Rs. 15,000. It is obvious therefore that she considered that the property was ample security for the amount originally advanced. Learned Counsel argued that her husband was murdered in January of 1932 and this might have delayed her in bringing the suit. She secured a certificate for realizing her debts from the District Judge on 29th August, 1932 and it was not until nearly four years after that she brought the present suit on 18th July 1936. It was therefore not on account of the murder that she delayed in bringing the suit.
10. Under the circumstances we consider that this case may well be governed by the 12 per cent, simple interest rule and accordingly we allow this appeal to this extent that we reduce the rate of interest from 13 annas per cent, per month which is 9 par cent, per annum to 12 per cent, per annum simple interest. The result will be to give a comparatively small reduction in the interest on the decree of the Court below. As the appellants have substantially failed we allow costs of this appeal to the plaintiff respondent, Mt. Ganga Dei.