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Judgment
N.D. Patnaik, J.—This appeal if filed by the defendants in O. S. No. 176/79 in the Court of the Addl. Subordinate Judge, Tenali. The respondents who are the plaintiffs filed the suit on a mortgage deed executed by the defendants, for Rs. 16,000/-. The defendants have taken various contentions in the written statement, that is about the execution and attestation of the mortgage deed, that it is not supported by consideration, that they are small farmers and so the debt is discharged and that the interest is penal and usurious and the suit claim is barred by limitation. The trial Court had framed appropriate issues and given findings rejecting all the contentions of the defendants and passed a decree in favour of the plaintiffs. Aggrieved by that the defendants preferred the appeal.
In this appeal, the learned Counsel for the appellants has raised four contentions : (1) that there is no proper execution of the document; (2) that it is not supported by consideration; (3) that the defendants are small farmers and so the suit debt is discharged and (4) the interest is penal and usurious. I will now consider each of the contentions.
The first contention is that the plaintiffs have not proved the execution and attestation of the suit mortgage deed which is marked as Ex. A-1. The mortgage deed as stated above is executed by defendant Nos. 1 to 4 in favour of the plaintiffs. At the time of the execution of the mortgage deed the 4th defendant was minor and so it is executed by the 1st defendant on his behalf as the guardian. The document contained the thumb impressions of the 1st defendant, Bollineni Venkatappaiah, for himself and on behalf of his minor son, Bollineni Shankararao, the 4th defendant. It is also signed by defendant Nos. 2 & 3, i. e., Bollineni Ramaiah and Boltineni Sivaji. The thumb impressions of the 1st defendant or the signatures of defendant Nos. 2 & 3 on the suit document, Ex. A-1 are not dented. There is also an endorsement on the reverse of the document that he execution of the document has been admitted by the 1st defendant IV himself and on behalf of his minor son the 4th defendant and it is also activated by defendant Nos. 2 & 3 and contained their signatures. There Annexure is no dispute regarding the execution of the document by defendant Nos. 1 to 4. The contention of the defendants is that there is no evidence regarding proper attestation of the document. The document is attested by two witnesses who are examined as P. Ws. 2 & 3. P.Ws. 2 who is brought under arrest to the Court did not support the plaintiff''s case and did not say that he had seen the defendants executing the document, though he admitted his signatures on the document. The other attestor who was examined as P. W. 3 has stated that the defendants have executed the document in his presence and he had attested it. The learned Counsel for the appellants-defendants contended that the proof of attestation requires both the attesting witnesses to say that the document was executed in their presence and the other attesting witness has also signed in their presence which is lacking in this case. He relied on a decision of this Court reported in Karri Nookaraju Vs. Putra Venkatarao and Others, . That was a case of proof of a will. In that case, it was held that it is clear from Section 68 of the Evidence Act. read with Section 63(c) of Succession Act that it is sufficient even if one attestor is examined. But that attestor should speak not only about the testator''s signature or affixing his mark to the will or somebody else signing it in his presence and by his direction or that he had attested the will after taking acknowledgment from the testator of the signature or mark, but he must also should speak that each of the witnesses had signed the will in the presence of the testator. In N. Ramaswamy Padayachi Vs. C. Ramaswami Padayachi and Others, it was held that where a gift deed duly signed by the donor is attested by two witnesses but it is not proved that each of the attesting witnesses saw the other attesting in his presence, the evidence of one of the attesting witnesses is not sufficient to prove the execution of the gift deed. Though Section 68 of the Evidence Act does not require both the attesting witnesses to be examined for proving execution of the deed, it does not absolve the party relying on a document, when the execution is denied, to prove that each of the witnesses had seen the executant sign or affix his marks or has received from the executant a personal acknowledgment of the signature or mark.
The learned Counsel for the respondents-plaintiffs has distinguished these decisions on the ground that they are applicable to a case where the execution of a document is specifically denied by the executant but in this case there is no specific denial but it is only a vague and evasive denial and therefore, those decisions are not applicable. He has referred to the averments in paragraphs 3 and 4 of the written statement. In para, 3 of the written statement it is stated that there is neither due execution nor proper and valid attestation of the mortgage bond. Para 4 deals with payment of consideration. Though the defendants did not say in the written statement that they did not execute the document, they have stated that there is no due execution of the mortgage and as pointed out by the learned Counsel for the appellants-defendants, an issue has also been framed by the trial Court regarding execution of the document. So let us proceed on the assumption that the defendants have denied the execution of the document and also the attestation thereon.
Section 68. of the Evidence Act says that if a document is required by law to be attested, it shall not be used as evidence until one attesting I witness at least has been called for the purpose of proving its execution, if | there be an attesting witness alive, and subject to the process of the Court and capable of giving evidence. Proviso reads that it shall not be necessary to call an attesting witness in proof of the execution of any document not being a will, which has been registered in accordance with the provisions of the Indian Registration Act unless its execution by the person by whom it purported to have been executed is specifically denied. Since we are proceeding on the basis that the denial in the written statement amounts to a specific denial the proviso need not be considered. Section 71 of the Evidence Act reads that if the attesting witness denies or does not recollect the execution of the document, its execution may be proved by other evidence. In this case, as was stated earlier, there are two attestors to the document who are examinated as P. Ws. 2 & 3 and out of them, P. W. 3 has spoken in support of the plaintiffs'' case whereas P. W. 2 though speaks about his attestation did not speak about execution of the document. Therefore, there is only the evidence of P. W. 3 who speaks about the execution of the document by the defendants. The lower Court also relied on the evidence of P.W. 1 who deposed about execution of the document, Ex. A-1 by the defendants. The learned Counsel for the appellants contended that in such circumstances, Section 71 cannot be attracted because according to him if one attesting witness does not speak about its execution, the execution can be proved only by the after attesting witness and not by any other person. In support of his contention, he relied on a decision of the Bombay High Court reported in Vishnu Ram Krishna Wani v. Nathu Vithal Wani, 1949 Bombay Law Reporter P 245 . From the facts of that case, it can be seen that there were four attestors to a will but only one attestor was examined. From his evidence it was established that the will was attested by him only. The attestation of the 2nd witness is not established by him and therefore, if the evidence with regard to the attestation was to be confined to the evidence of that attestor, one of the important factors necessary to be established for the due execution of the will, that is, attestation by the two witnesses, would be absent. The other evidence was relied on regarding attestation. Relying upon Section 71 of the Evidence Act, it was pointed out as follows :
" Section 71, in our opinion, has no application when one attesting witness has failed to prove the execution of the will and other attesting witnesses are available who could prove the execution if they were called".
But in the present case both the attestors are examined out of whom one, that is P.W. 3 supported the plaintiffs'' case, whereas the other did not support the plaintiffs case and the lower Court had relied on P.W. 1''s evidence also who speaks about the execution and attestation by P.Ws. 2 & 3. The learned Counsel for the plaintiffs/respondents has relied on the decision of the Calcutta High Court reported in Jaikarandas Agarwalla and Ors. v. Protapsing Agarwalla and Anr., AIR 1940 Calcutta p. 189. in which it is stated as follows:
"Section 71 is one of the exceptions to the rule, relating to proof of documents required by law to be attested which is laid down in Section 68: The rule in Section 68 is stringent and mandatory and cannot be relaxed except in circumstances provided for in the Act itself. One of such exceptional circumstances is to be found in Section 71".
It was further stated as follows :
"Therefore, u/s 68 it is necessary to call an attesting witness not merely to prove the signature of the executant but to prove attestation as well and if such witness turns hostile or refuses to prove execution or attestation other witnesses may be called for the same purpose.. .. Being grantee of the mortgage deed the mortgagee cannot witness the execution of the document made to himself nor can he take its acknowledgment but when the attesting witness turns hostile he is certainly competent to give evidence not as an attesting witness but as a witness to prove attestation by others. The Legislature has not left the fate of attested documents completely at the mercy of the attesting witnesses. The mortgagee''s duty is at an end as soon as he calls one of the attesting witnesses u/s 68. If the witnesses turn hostile he is not helpless and is entitled to adduce other evidence u/s 71. This other evidence includes his own evidence as well".
In case (3) supra which I have referred to above, though other attesting witnesses were available they were not examined but other evidence was adduced regarding the execution of the document. Whereas in this case the plaintiffs have examined the other attesting witness. In addition to that there is the evidence of PW. 1. Section 71 says that if the attesting witness denies the execution of the document, its execution may be proved by other evidence. The decision of the Calcutta High Court in case (4) supra says that the plaintiff is not helpless where the attesting witness turns hostile but the mortgagee himself can give evidence regarding attestation of the document. The lower Court was therefore perfectly justified in relying on the evidence of P.W. 1 coupled with the evidence of P.W. 3 regarding attestation of the document.
The learned Counsel for the plaintiffs/respondents further contended that the signatures of the Sub Registrar and the identifying witnesses at the time of registration of the document also amount to attestation. He has relied on a decision of this Court reported in Donapati Ramireddi v. Kanchanreddi Rama Lakshmamma, 1968 1 AW.R 359.(5) in which the learned single judge held following the Full Bench decision of the Madras High Court in Veerappa Chettiar Vs. Subrahmania Aiyar and Others, that the signature of the executant on the endorsement of the Registrar amounts to execution of the document and since its execution has been seen by the two attesting witnesses in whose presence the thumb mark was put on the endorsement and they attested the two signatures it is a sufficient compliance with the requirements of Section 3.
In this case, as stated above, the 1st defendant on behalf of himself and the 4th defendant put his thumb impression before the Registrar and defendant Nos. 2 and 3 had signed it in the presence of two witnesses. Therefore even on that ground also, there is valid attestation of the document. The trial Court is, therefore, right in holding that the document is executed by defendants 1 to 4 and it is properly attested.
The next question is about the consideration. In the written statement in para 4, it is alleged that the 1st defendant borrowed Rs. 12,600/- at 18% interest but in the mortgage bond only 9% interest is mentioned and the difference of interest is calculated on Rs. 12,600/- for three years and it was added to Rs. 12,600/-. The amount of Rs. 16,000/-was mentioned in the bond as the amount that was borrowed. It is further contended that Rs. 16,000/- was not paid before the Registrar and only Rs. 12,600/- was paid. The document Ex. A-1 recites that the defendants have borrowed Rs. 16,000/- from the plaintiffs. There is also an endorsement made by the Sub Registrar that in his presence Rs. 16,000/- was paid by P.W. 1 on behalf of the claimants that is the plaintiffs to the 1st executant, i.e., the 1st defendant. Therefore, this endorsement made by the Sub Registrar that Rs. 16,000/- was paid in his presence negatives the contention of the defendants that only Rs. 12,600/- was paid and for the difference of interest, the document was obtained for Rs. 16,000/. The contention of the learned Counsel for the appellants/defendants is that the averment in the plaint is that the plaintiffs have paid the amount to the defendants whereas the evidence would go to show that P.W. 1 paid the amount before the Sub-Registrar and so there is variation between the pleadings and the evidence. The plaintiffs are the son-in-law and the daughter of P.W. 1 who paid the amount before the Sub Registrar. The evidence shows that the defendants approached P.W. 3 for arranging a loan and he took them to P.W. 1 and though defendants asked for a loan of Rs. 20,000/- P.W. 1 agreed to give Rs. 16,000/-. The suit document Ex. A-1 is executed in favour of the plaintiffs and the recital therein is that the defendants have borrowed Rs. 16,000/-from the plaintiffs and as per the arrangement it should be paid before the Sub Registrar at Tenali. The endorsement on the document is that P.W. 1 paid the amount on behalf of the plaintiffs. In Om Prabha Jain Vs. Abnash Chand and Another, it is pointed out that the ordinary rule of law is that evidence is to be given only on a pie a properly raised and not in contradiction of the plea. The learned Counsel for the respondents/plaintiffs has argued that there is no contradiction between the pleadings and proof regarding payment of consideration because in the plaint it is stated that the plaintiffs have paid the consideration to the defendants whereas the endorsement would show that P.W. 1 paid the money before the Sub Registrar on behalf of the plaintiffs. Therefore, payment of Rs. 16,000/-by P.W. 1 is only on behalf of the plaintiffs and so to that extent there is no variation between the pleading and proof. The alternative contention of the learned Counsel for the appellants is that even though the consideration may be furnished by the third parties, it must be at the desire of the pro miss or and in this case as there is no such evidence it cannot be considered to be a valid consideration. Reliance is placed on a decision of the Privy Council reported in AIR 1948 150 (Privy Council) wherein it is stated as follows :
"No doubt the respondent pressed the appellant to furnish the-necessary funds but in doing so he was only asking him to give effect .to his grandfather''s undertaking contained in the letter of 29th January. Their Lordships accept these findings. The result is that it cannot be held that the advances of money were made at the ''desire'' of the respondent within the meaning of Section 2, Clause (d), Contract Act".
Therefore, in that case the demand was made for the necessary funds as per the undertaking given by the grandfather. In the present case, the evidence is that the defendants approached P.W. 3 who took them to P.W. 1 for loan and on the request of the defendants P.W. 1 gave the loan. Even alternatively, assuming that the plaintiffs did not furnish the consideration but was provided by P.W. 1 still as that consideration was provided by P.W. 1 at the desire of mortgagors, it will be sufficient consideration, Therefore, the findings of the lower Court that the document is supported by consideration is perfectly justified.
The next point is that the defendants are small farmers and therefore, the debt is discharged. The definition of ''small farmer'' occurring in the Andhra Pradesh Agricultural Indebtedness (Relief) Act, 1987 reads that the small farmer means a person whose principal means of livelihood is income derived from agricultural land and who holds and personally cultivates or who cultivates as a tenant or share-cropper or mortgagee with possession, agricultural land which does not exceed in extent,-(i) in the case of persons other than the members of the Scheduled Tribes, one hectare, if it is wet or two hectares, if it is dry; (ii) in the case of the members of the Scheduled Tribes, two hectares, if it is wet or four hectares if it is dry, but does not include any person whose annual household income other than from agriculture exceeds one thousand and two hundred rupees in any two years within three years immediately preceding the commencement of this Act: Explanation: For the purposes of computing the extent of land under this clause one hectare of wet land shall be deemed to be equal to two hectares of dry land. The suit document Ex. A-1 reads that the debt was borrowed for improvement of the terraced house situated at Tenali and also for purchasing a lorry. The evidence of P.W. 4 who is working as a clerk in the Office of the Regional Transport Authority, Guntur shows that the defendants have purchased a lorry. Therefore, the plaintiffs contend that since the occupation of the defendant is lorry business, they do not come within the definition of a ''small farmer''. The contention of the learned Counsel for the appellants/defendants is that the 2nd defendant owns Ac. 0-78 cents of land covered by Ex. B-l, that though the other defendants did not own any land, they are cultivating the lands of D.Ws. 3 & 4 of an extent of Ac. 5-00 as tenants. He has further contended that though the debt is borrowed by the joint family consisting of four persons, it is to be apportioned between the 4 units, relying on the decision of this Court reported in Krishna Murthy and Ors. v. State of A.P., 1978(2) ALT 504. in which it is pointed as follows :
"When a debt is owed by a joint family, each unit thereof consisting of an individual, the wife or husband as the case may be of such individual, and their unmarried minor children should be taken as a debtor within the meaning of the Act in respect of each share of the debt owed by the family. If any one of the smaller units of the joint family has other land which, taken along with the share which it should get out of the joint family properties, is more than the 1imit prescribed u/s 3(t) then that unit will not get the benefit of the debt relief. That is for the reason that, that particular unit is not a ''small farmer'' within the meaning of Section 3(t)......"
The learned Counsel for the respondents has referred to the finding of the lower Court in which it is stated that the debt is borrowed by the joint family. He has relied on a Full Bench decision of this Court reported in Dasam China Pappayya Raju v. Sripada Ramachandra Prabha kara Rao, 1981 (2) ALT 441 in which it is held as follows :
"If an individual claims to be a small farmer as defined by Section 3(t) the land held and cultivated by him alone must be taken into consideration. If on the other hand, it is a family which claims to be a small farmer, it is the aggregate of the land held and cultivated by that family that has to be taken into consideration. It is not permissible to aggregate the lands held by the members of the family when the individual alone is the debtor or the creditor......"
The evidence of the 1st defendant who is examined as D.W. 1 is that they are getting an income of Rs. 3,000/- to Rs. 4,000/- per annum. So their principal means of livelihood is not derived from agricultural land. It may be that the 2nd defendant is owning Ac. 0-78 cents of land covered by the document Ex. B-1. The lower Court did not accept the evidence that the defendants are cultivating the lands of D.Ws. 3 & 4. Therefore, when the avocation of the defendants is lorry business and agriculture is not the principal means of livelihood they cannot be held to be small farmers and so they are not entitled to the benefits therein and so the lower Court has rightly rejected this contention.
The last contention is regarding the rate of interest at 9% per annum compoundable with annual rests. The contention of the defendants is that it is usurious and penal. In support of the contention the learned Counsel for the appellants relied on a division Bench decision of this Court reported in Godugula Lakshmi Narasimhamurthy v. Muthukumalli Venkata Subbarao, 1971(1) ALT 322. wherein the following tests for deciding reasonableness are laid down :
"(1) The Court can re-open the transaction and give appropriate relief in the matter of interest when the transaction is substantially unfair;
(2) If the interest is excessive, the Court shall presume that the transaction is substantially, unfair, but this is rebuttable presumption;
(3) No hard and fast rule can be laid down as to what is a reasonable or excessive rate without reference to the several circumstances enumerated in Clause (a), (b) and (c) of Sub-section (2) of Section 3 of the Act.
(4) In determining whether the rate is reasonable or not, the Court has to take into consideration the following circumstances :
(a) the value of the security offered ;
(b) the financial condition of the debtor including the result of any prior transaction;
(c) the known or probable risks in getting repayment ;
(d) if compound interest was provided for, the frequency of the period of calculation of the interest ; and
(e) The advantage which the debtor reasonably expected to derive from the transaction."
In that case it was held on facts as under :
"The security was ample compared to the loan amounts borrowed under the several mortgages, that the creditor ran no risk at all in recovering the amounts, that no particular advantage was expected to be derived by the debtor and that the suit debts were borrowed purely for meeting the family expenses, it appears that the contract rate of interest at 0-12-6 per annum with triennial rests in the case of the first and third mortgages, and with annual rests in the case of the 2nd mortgage are excessive and that the conditions requisite for reopening the transaction as prescribed by Section 3(1) of the Act, have been established......"
The learned Counsel for the plaintiffs contended that from the recitals in the document it may be seen that the debt is borrowed for repairing the house at Tenali and for purchasing a lorry which is purely a commercial transaction. So rate of interest at 9% per annum with annual rests is not at all usurious and penal. A division Bench of this Court in Konakalla Venkata Satyanarayana (Died) and Others Vs. State Bank of India and Others, has pointed out that under the Usurious Loans Act, a debtor must prove that charging of compound interest is excessive. Then only presumption u/s 3(1) Expl. (1) can arise as in that case interest at 8 1/2% per annum with monthly rests cannot be presumed to be excessive. In another case reported in General and Credit Corporation (India) Ltd. Vs. Sri Raja Inuganti Venkata Rama Rao Bahadur Garu and Others, it was held that a debtor would get relief under the Usurious Loans Act only if it is established that the transaction is substantially an unfair one. It is true that the Explanation introduced by the Madras amendment has laid down that if the interest is excessive the court shall presume that the transaction was substantially unfair; but such a presumption may be rebutted by proof of special circumstances justifying the rate of interest.
Since the debt is borrowed for a commercial purpose i.e., for purchase of a lorry and the defendants were doing the lorry business, I am unable to agree with the contention that the charging of interest at 9% compound with annual rests is usurious and penal. Hence, the finding of the trial Court on this point is also confirmed.
In the result, the appeal is dismissed. In the circumstances, each party is directed to bear their own costs.