1. This is one of the most preposterous eases which shows that it was absolutely necessary to enact something in the nature of the Usurious Loans Act, 1918. In this case the principal defendants borrowed Rs. 400 on mortgage of properties which admittedly are very valuable. The interest charged was Rs. 7-8 per cent. per mensem which would come up to nearly 100 per cent. per annum with annual rests. The result is that within 4 years, as the Subordinate Judge observes, Rs. 400 principal swelled up to over Rs. 7,500. The Subordinate Judge says the rate is monstrous, we unhesitatingly endorse that opinion. Mr. Roy for the assignee of the mortgagee who is the appellant before us contends that that is the usual rate of interest in that part of the country. If that is so nothing can be more deplorable than the fact asserted, and in every such case the Courts would be justified in rigorously applying the Usurious Loans Act in that part of the country, whenever such a course is justified. The evidence, however, does not satisfy us that that is the usual rate of interest in that part of the country, for mortgage-bonds, The pro forma defendants who were the original mortgagees are, no doubt, very hard money-lenders and they exacted usurious rates of interest in other cases as they have proved themselves. The Courts ought to be alert in allowing them interest in cases which are brought before the Court when usurious rates of interest are claimed by them. We have nothing to add to the judgment of the Subordinate Judge in this case except to point out that it is unnecessary in such cases to consider whether the lender was in a position to dominate the will of the borrower. Where the rate of interest is high the Court may proceed to give relief under Section 3(1), Clause (a) and (b) read with the explanation to the proviso in Clause (d) where it is stated that interest may, by itself, be sufficient evidence that the transaction was substantially unfair. In our opinion nothing can be more unfair than 100 per cent. interest with annual rests where there is sufficient security for the debt.
2. The next point argued on behalf of the appellant is that he comes within Sub-section (4) of Section 3 of the Usurious Loans Act, 1918, inasmuch as the plaintiff was a bona fide transferee from the original mortgagees. To assert such a proposition seems to be a mere effrontery. To say that they were not aware that the rate of interest was unconscionable seems to us to be absurd. Then again he purchased the mortgage-bond for Rs. 2,000 when the actual amount due on the bond was over Rs. 5,000. Was he not put upon an enquiry why the mortgagees were selling their interest at such a loss? The absurdity of the position taken up appears from the very statement of the fact.
3. This appeal is, therefore, dismissed with costs. We assess the hearing-fee at ten gold mohurs.