1. In 1933 the appellant took a transfer of a mortgage debt the rate of interest on which was 12 per cent per annum with annual rests. In 1937,. the Madras Government passed the local Act, (Act VIII of 1937) amending the Usurious Loans Act (X of 1918), under which amendment the Court had to presume that if an agriculturist was charged compound interest, the interest was excessive. The questions that arise for decision are : (1) whether Sub-section 4 of Section 3 of the Act will save the appellant from the application of the Madras amendment, and (2) whether the rate fixed by the lower appellate Court as the fair rate, namely, 9 per cent simple interest, is reasonable.
2. Sub-section 4 of Section 3 of the Usurious Loans Act reads:
Nothing in this section shall affect the rights of any transferee for value who satisfies the Court that the transfer to him was bona fide, and that he had at the time of such transfer no notice of any fact which would have entitled the debtor as against, the lender to relief under this section.
The fact which, according to the learned advocate for the appellant, attracts the provisions of Sub-section 4 is the passing of the Madras Amendment Act VIII of 1937. It is of course impossible for any transferee to know what the legislature is going to pass in the future; but it is incredible that Sub-section 4 was intended to safeguard a transferee against future legislation. The kind of fact that the legislature presumably had in mind was some circumstance such as that the debtor was an agriculturist or one of the circumstances mentioned in Sub-section (2). I have no doubt that the Madras amendment does apply to the facts of this case.
3. It is argued that an application of the Madras amendment would be unfair, because the transferee, the appellant, paid a price which he would not have paid, had he known that such legislation would come into force. No hardship would however result if the Court takes the circumstances into account and award him a higher rate of interest for the period up to the date of his transfer. The appellant says that he paid for the assignment the principal, together with compound interest up to the date of his transfer. That seems incredible, but he may have paid 12 per cent simple interest. It has been strenuously argued with reference to past decisions that this Court has held a much higher rate of interest to be not excessive. On the other hand, this Court has frequently held that 9 per cent is a very liberal remuneration for a secured debt. One has to remember that the times have changed a great deal since some of the decisions relied on were made and rates of interest are now very much lower than what they were a decade or two ago. I am certainly not prepared to say that a creditor suffers hardship because he gets no more than 9 per cent, simple interest on a secured debt.
4. The appeal is dismissed, except with the slight modification noted above in the rate of interest up to the date of transfer. The appellant will pay proportionate costs to the respondent.