ORDER : 1. The plaintiff O.S.No.266/87 on the file of II Additional Subordinate Judge, Visakhapatnam had preferred this Appeal aggrieved by the Judgment and decree of the court below dated 31-12-1986 granting only simple interest at 12% on the mortgage debt instead of granting compound interest at 12% per annum on Rs. 40,000/- principle form 30-8- 1952, the date of mortgage upto the date of suit i.e. 3-11-1980. The appellant/plaintiff had filed the suit for recovery of mortgage amount due under a simple mortgage deed dated 30-8-1952. The allegations in the plaint are as follows : 2. Plaintiff filed the suit for recovery of balance of a mortgage amount due under a simple mortgage deed executed by late Sadharam Appalanaidu on 30-8-1952 for Rs. 40, 000/- the principal amount borrowed him from the father of the plaintiff. The following are the details of the suit mortgage as in the plaint. (a) Parties to mortgage : G.K. Padmaraju father of the plaintiff was the mortgagee Sadaram Appalanaidu the predecessor of the defendant was the mortgagor. (b) Sum secured : Rs.40,000/- (c) Rate of interest : 12% per annum and interest is to be paid at the end of every year and on default it is agreed to pay the amount with interest at 12% (d) Amount due : Rs. 4,08,343-65 paise 2. Time fixed for redemption : Two years i.e. payable by 30-8-1954. (f) Property mortgaged : "Self acquired immovable property of mortgagor with all the constructions including Sri Varaha Lakshmi Textiles Cinema theatre together with all the projectors rectifiers machine etc. fully described in the schedule." Other terms of the mortgage are that the mortgagor borrowed the amount for his necessity i.e., for his investment in the contract works and for discharging the debts contracted by him for construction of Cinema Theatre in item 3 of the hypothecated property. The properties are the self acquired properties of the mortgagor and himself alone had absolute right, title, interest and enjoyment. The mortgagor agreed to pay the mortgage amount within 2 years together with interest at 12% per annum which is to be paid at the end of every year and in default agreed to pay the same with interest at 12% per annum. The mortgagor agreed to pay the mortgage amount within 2 years together with interest at 12% per annum which is to be paid at the end of every year and in default agreed to pay the same with interest at 12% per annum. It is agreed that in case the hypothecated property is not sufficient to discharge the mortgage debt i.e., principal and interest, the same is to be recovered from his other properties. Subsequently the mortgagor paid Rs. 600/- on 17-7-53, Rs. 2,000/- on 10-9-1953, Rs. 300/- on 13-4-54, Rs. 2,000/- on 19-4-54, Rs. 6,000/- on 8-8-85. Rs. 8,000/- on 16-6-68, Rs. 5/- on 10-4-61, Rs. 5,000/- on 24-9- 62, Rs. 10,000/- on 23-2-66, Rs. 100/- on 12-12-68, Rs. 5,000/- on 18-10-68 and the same are endorsed on the mortgage bond. Subsequently Rs. 2,000/- were paid on 30-3-1969, Rs. 5,000/- on 5-4-1970, Rs. 4,000/- on 30-3-1970, Rs. 3,000/- on 8-3-1971, Rs. 2,800/- on 12-8-1972 and Rs. 1,050/- on 8-9-1972 and after these no further amounts were paid. The mortgagor died in June, 1974. The 1st defendant is the daughter of late Appalanaidu and defendants 2 to 6 are the daughters of his predeceased daughters and he had no sons. The defendants succeeded to the properties of late Appalanaidu and are in possession of the same and are liable to discharge the mortgage amount. The mortgagee Sri G.K.Padmaraju died on 30-11-1964. Late Padmaraju executed a Will and deposited the same in the District Registrar's Office and the same was opened and was registered on 15- 12-1964. As per the said Will, the plaintiff and his younger brother Kamarju are the residue legatees and the above said mortgage amount being a residue the plaintiff and his brother are entitled to all the amount due under the mortgage. The plaintiff and his brother compromised their disputes and as per the said compromise, the plaintiff's brother relinquished all his rights in the above mortgage to the plaintiff by a registered deed. As per the said deed the plaintiff is entitled to the amount due under the above plaintiff is entitled to the amount due under the above mortgage and none else has any right to the same. The defendants are demanded by registered notice dated 5-1-1979. The notices were received by the 1st defendant and the guardians of defendants 2 to 6. The 1st defendant did not sent any reply. The defendants are demanded by registered notice dated 5-1-1979. The notices were received by the 1st defendant and the guardians of defendants 2 to 6. The 1st defendant did not sent any reply. The guardian of defendants 5 and 6 Sri B. Naganna sent a reply dated 22-1-1979 asking further information stating that action for letters of administration for administering the properties of late Appalanaidu was pending and the debt due under the mortgage was also included in the petition. The required information was furnished by registered letter dated 20-1-1977. No further payments are made. The plaintiff made a final demand through lawyer's notice dated 5-3- 1977. The notices were received but no replies were given nor any amount was paid. The plaintiff learnt that action for administering the estate ended in a compromise. All the defendants are liable to discharge the mortgage debt and the plaintiff is filing this suit for recovery of Rs. 4,08,343-65 paise being the amount due up to 3-11-1980 and also subsequent interest. 3. The 1st defendant in the suit -1st respondent in the Appeal, filed written statement, defendants 2 to 4, defendants 5 and 6 filed their written statement. The 7th defendant also filed written statement. The pleading of the 1st respondent 1st defendant is to the effect that she is not aware of any simple mortgage said to have been executed on 30-8-1952 by late Appala Naidu garu. The plaintiff is put to strict proof of the same and it is property of Sadaram Appalanaidu which was shown in the schedule attached to the petition. Whether they are self acquired or ancestral property, the defendant is not aware. The plaintiff is put to strict proof of the same. The conditions in the mortgage as enumerated therein are not admitted. The rate of interest is also not admitted and the rate of interest is excessive. The allegations about the payments by the mortgagor are not true and valid. The defendant is not aware of any payments. The plaintiff is put to strict proof of the endorsements said to have been made on the mortgage bond. The defendant feels that certain of the signatures are forged. They do not tally with the original signatures of late Appalanaidu. It is true that this defendant and other defendants succeeded to the properties of late Sadaram Appalanaidu. The plaintiff is put to strict proof of the endorsements said to have been made on the mortgage bond. The defendant feels that certain of the signatures are forged. They do not tally with the original signatures of late Appalanaidu. It is true that this defendant and other defendants succeeded to the properties of late Sadaram Appalanaidu. It is not true to say that defendant is liable to discharge the mortgage amount. The defendant did not acknowledge the debt and the defendant is not liable for payment of the debt itself is barred by time. The plaintiff is put to strict proof of all the allegations that the mortgagee Sri G.K.Padmaraju executed a Will and deposited the same in the Dist. Registrar's Office and the same was opened and was registered on 15-12-1964, that as per the said Will the plaintiff and his younger brother Kamaraju are the residue legatees and the abovesaid mortgage amount being a residue the plaintiff and his brother are entitled to all the amount due under the mortgage etc. This defendant is not aware of the Will executed by late Padmaraju and subsequently compromised the disputes between the plaintiff and his brother. The plaintiff has to prove the same that he is entitled for the same. The allegation that the defendants are demanded by a registered notice dated 5-1-1976, that the notice were received by the 1st defendant and the guardians of defendants 2 to 6 etc., are not true and valid. It is true that the defendant received the notice from the plaintiff, but she did not send any reply, because she is not aware of the mortgage at that time. The defendant submits that the suit is barred by time. The suit is liable to be dismissed as the suit was not instituted within 12 years from the last date of endorsement. Therefore the defendant prays that this suit may be dismissed with costs. 4. Likewise, defendants 2 to 4, 5 and 6 also had filed written statement in substance taking the same stand. The 7th defendant who is the son-in-law of Sri Appala Naidu had taken a stand stating that he is not aware whether his father-in-law borrowed any amount from J.K. Padmanabhan on 30-8-1952 or on any other date and he had also taken a stand that he is not a necessary party to the suit. 5. The 7th defendant who is the son-in-law of Sri Appala Naidu had taken a stand stating that he is not aware whether his father-in-law borrowed any amount from J.K. Padmanabhan on 30-8-1952 or on any other date and he had also taken a stand that he is not a necessary party to the suit. 5. On the strength of the respective pleadings, the following issues were framed: 1. Whether the suit mortgage bond is true, valid and binding on the defendants? 2. Whether the suit is not in time? 3. Whether the interest is usurious and excessive? 4. To what relief? Subsequent thereto the following additional issues were framed : 1. Whether the payment endorsements on the mortgage bond are true? 2. Whether the 7th defendant is not a necessary party to the suit? 6. On the strength of the pleadings of the respective parties, evidence was let in and PW-1 and PW-2 were examined on behalf of the appellant/plaintiff and Ex.A-1 to A-31 were marked. On behalf of the respondents-defendants none had been examined and Ex.B-1 was marked. Apart from this, Ex.X-1, dated 14-6-1994 - Registration extract of the Will executed by late G.K.Padmanabham also was marked. On the strength of the oral and documentary evidence, the court below had answered Issues 1 and 2 and also the additional Issues 1 and 2, in favour of the appellant/plaintiff. While answering Issues 3 and 4, the court below had at paragraphs 24 and 25 after discussing the rate of interest as per Ex.A-1 mortgage bond had arrived at the conclusion that since it is a secured debt and considering the rate of interest and value of rupee during the year 1952, interest at 12% per annum with yearly rests was held to be excessive and not reasonable. While answering Issue No.4, it was held that the plaintiff is entitled to preliminary decree and he is entitled to simple interest at 12% on the mortgage debt from the date of debt till the date of decree and aggrieved by this portion of the Judgment and decree alone, the appellant/ plaintiff had preferred the present Appeal. 7. Sri T. Veerabhadrayya, the learned counsel for the appellant had contended that 12% yearly rests cannot be held to be penal, excessive or usurious and that is a condition stipulated in Ex.A- 1 itself. 7. Sri T. Veerabhadrayya, the learned counsel for the appellant had contended that 12% yearly rests cannot be held to be penal, excessive or usurious and that is a condition stipulated in Ex.A- 1 itself. When a condition is stipulated in the contract, normally such condition has to be given effect to and there cannot be any deviation. The learned counsel no doubt had drawn my attention to certain other relevant portions of the Judgment, which may not be relevant for the purpose of deciding this Appeal, since this Appeal is preferred by the appellant/plaintiff only to the limited extent stated supra and hence the detailed discussion on other Issues need not be gone into while deciding the present Appeal. It is also brought to my notice that the mortgagor and mortgagee are no more and the legal representatives are fighting the present litigation. The learned counsel also had contended that to show that the interest rate charged under Ex.A-1 is usurious, none on behalf of the defendants at least had entered the witness box and had deposed about the same. In the absence of any evidence, the court below had totally erred in negativing the relief to the appellant/plaintiff. The learned counsel had placed strong reliance on M/s. Poosarla Sambamurthy and Sons v. Maganti Krishan Rao, 1980 (2) APLJ 28 and also State Bank of India v. Yasangi Venkateswara Rao, AIR 1999 SC 896 . The learned counsel further contended that if a party is not examined at all, an adverse inference has to be drawn and it can be presumed that his case is not proved at all. The learned counsel also had placed strong reliance on Vidyadhar v. Mankik Rao, 1999 (2) CCC 152 (SC) : AIR 1999 SC 1441 . Iswar Bhai C. Patel v. Harihar Behera, 1999 (2) CCC 171 (SC) : AIR 1999 SC 1341 . The learned counsel had drawn my attention to Section 34 and also Order 34 Rule 11 Civil Procedure Code and had contended that even on the aspect of principal amount and interest to be granted thereon, the Court below had totally erred and had placed strong reliance on Central Bank of India v. Ravindra, (2001) 7 Supreme 764 : AIR 2001 SC 3095 . 8. Sri. 8. Sri. S. Venkateswar Rao, the learned counsel for the 1st respondent had strongly contended that the Judgment had recorded reasons why simple interest at 12% alone can be granted and it is also pertinent to note that the parties are no more and Ex.A-1 transaction is a very old transaction. The learned counsel also had contended that it is sufficient if the Court is satisfied that the interest is penal or usurious and there need not be any evidence in this regard and the mere absence of evidence on the part of the respondents-defendants will not alter the situation in any way. The learned counsel had placed reliance on several decisions to substantiate his contention viz., State Bank of India v. Karnati Kotaiah, 1993 (2) ALT 473 , Indian Bank v. P. Venkata Satyavathi, 1993 (1) An WR 607(DB), Union Bank of India v. Dalpar Gauri Shankar Upadyay, AIR 1992 Bombay 482 (FB), G. Lakshminarasayamma v. Bonu Satyavathi, 1985 (2) ALT 486 , Andhra Bank v. M/s. Manney Industries, 1993 (1) ALT 134 , N. M. Veerappa v. Canara Bank AIR 1998 SC 1101 . The learned counsel also had contended that the grant of interest in a mortgage transaction is covered by Order 34 Rule 11 Civil Procedure Code. The learned counsel also had stated that at any rate, while granting interest certain factors had been taken into consideration by the court below and hence the Appellate Court should be slow in disturbing the same. 9. Heard both the counsel and perused the material available on record. 10. The Points which arise for consideration in this Appeal are: (a) Whether in the facts and circumstances of the case, the court below is justified in granting 12% simple interest? (b) Whether the interest at 12% per annum with yearly rests stipulated by Ex.A-1 mortgage bond can be said to be penal or usurious? (c) To what relief? POINTS (a) & (b): 11. For the purpose of convenience, Points (a) and (b) can be discussed together. 12. Ex.A-1 is the mortgage bond executed by Appalanaidu in favour of late Padma Raju, dated 30-8-1952. Both the mortgagor and mortgagee are no more and the legal representatives are fighting the present litigation. However, it is also brought to my notice that the amount as decreed by the Court below had been paid by the respondents. 12. Ex.A-1 is the mortgage bond executed by Appalanaidu in favour of late Padma Raju, dated 30-8-1952. Both the mortgagor and mortgagee are no more and the legal representatives are fighting the present litigation. However, it is also brought to my notice that the amount as decreed by the Court below had been paid by the respondents. The crucial question which may have to be considered in the present Appeal is when specifically the interest at 12% per annum with yearly rests had been stipulated as a contract rate under Ex.A-1 mortgage bond, in the absence of any other material contra and in the absence of any evidence whether the Court below is justified in holding that the interest is excessive and not reasonable. The Court below while deciding Issue No.3 at paragraph 24 of the Judgment had observed that there can be no hard and fast rule as to what would be reasonable rate of interest and a distinction has to be drawn between a transaction wherein the creditor has security for his loan and a transaction where there is no security and if there is no security, compound interest at 12% may be a reasonable rate. But when there is security for his loan, the compound interest at 12% per annum is excessive. As already stated supra, no evidence had been let in on behalf of the respondents-defendants. In the decision referred supra, the Apex Court held that where a party to the suit does not appear into witness box and states his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct. In the decision referred supra, the Apex Court held that where the defendant had not entered into witness box to make a statement on oath in support of his pleadings set out in the written statement, an adverse inference would arise that what he had stated in the written statement was not correct. In the decision referred supra, the Apex Court held that where the defendant had not entered into witness box to make a statement on oath in support of his pleadings set out in the written statement, an adverse inference would arise that what he had stated in the written statement was not correct. The learned counsel for the respondent had made a serious attempt to show that the law does not cast such a burden in a matter of this nature and a serious attempt was made to substantiate his contention by placing reliance on the decision referred supra wherein it was observed that the debtor cannot be burdened with proof that interest charged is unfair. Strong reliance also was placed on the decision referred supra. Even if it is a case where a condition in a mortgage transaction relating to the interest is attacked as penal or unreasonable under Usurious Loans Act, it is but reasonable that the parties taking the stand should let in some evidence at least relating to the circumstances as they existed as the time of the transaction. As I can see from the impugned Judgment, the Court below had arrived at the conclusion taking into consideration the rupee value and the fact that it is a secured debt. In the decision referred supra, it was held that where the contract stipulates a particular rate of interest and provides that interest at a higher rate is payable in case of default, it can be held to be penal and not enforceable, but where the contract provides for simple interest at a particular rate and provides that in case of default in paying the interest, compound interest is payable at the same rate from the date of default, it cannot be held to be per se penal. As already observed by me, when once the Court is satisfied that a condition stipulated in the mortgage bond cannot be said to be per se penal or unreasonable, it is for the party claiming such a benefit to establish the relevant facts and circumstances by virtue of which they can claim such a benefit. In the decision referred supra, it was no doubt held that courts undoubtedly have got discretion, but that discretion has to be exercised basing on the facts and circumstances that have been brought out therein. In the decision referred supra, it was no doubt held that courts undoubtedly have got discretion, but that discretion has to be exercised basing on the facts and circumstances that have been brought out therein. In the decision referred supra, while dealing with bank loan and interest, the Apex Court had observed as follows: "We also find it difficult to agree with the observations of the High Court that normally when a security is offered in the case of mortgage of property, charging of compound interest would be regarded as excessive. Entering into a mortgage is a matter of contract between the parties. If the parties agree that in respect of the amount advanced against a mortgage compound interest will be paid, we fail to understand as to how the Court can possibly interfere and reduce the amount of interest agreed to be paid on the loan so taken. The mortgaging of a property is with a view of secure the loan and has no relation whatsoever with the quantum of interest to be charged". Reliance also was placed on the decision referred supra and also supra in this regard. In the decision referred supra, while dealing with the grant of interest in the case of mortgage suits, the Apex Court held that special provision of Order 34 Rule 11 Civil Procedure Code alone is applicable and not Section 34 Civil Procedure Code. Apart from the main controversy between the parties relating to the aspect whether the claim of interest of 12% with yearly rests is penal, usurious, excessive or not, the learned counsel for the appellant also had placed strong reliance on the decision of the Apex Court referred supra for the meaning to be assigned to the phrase "the principal sum adjudged" and "such principal sum" as occurring in Section 34 Civil Procedure Code and the main question that was agitated before the Apex Court was whether capitalisation of interest debited on periodical rests will convert interest into the principal sum and the question was answered in the affirmative. No doubt there is detailed and elaborate discussion on this aspect. But this question was not raised specifically as a ground in the grounds of appeal. No doubt there is detailed and elaborate discussion on this aspect. But this question was not raised specifically as a ground in the grounds of appeal. The learned counsel for the appellant had advanced an argument stating that in view of Article 141 of the Constitution of India, inasmuch as it is the law declared by the Supreme Court, it is binding on all courts and since it is a pure question of law, the question can be raised at any stage. The learned counsel also had contended that on the strength of the admitted facts, this question also can be decided. However, inasmuch as the transaction Ex.A-1 is a very old transaction and in view of the fact that the preliminary decree as granted by the Court below had been satisfied by the respondents-defendants already and especially in the light of the fact that on the aspect of the penal or unreasonable nature of Ex.A-1 transaction, there is no evidence and the Court below had decided the matter in a general way, in the facts and circumstances of the case, I am satisfied that it is a fit matter to be remitted back to the court below for the purpose of affording opportunity to both the parties to let in further evidence on the specific questions discussed in detail supra. It is also made clear that no other question is left open between the parties except the questions which had been discussed in detail while answering Points (a) and (b). POINTS (C): 13. It is needless to point out that normally parties to a contract are bound by the terms and conditions of contract. It is also true that whether hanging of 12% interest with annual rests is penal, excessive, or not, may have to be decided depending upon several facts and circumstances. As far as the Court is concerned, for the purpose of appreciating such contentions it is always desirable to have evidence let in by both he sides. Hence, in the light of the foregoing discussion, the impugned Judgment and decree so an as it relates to the disputed amount and the interest subsequent thereto, is hereby set aside and the matter is remitted back for the purpose of affording opportunity to both the parties to let in evidence on the specific questions decided in his Appeal as discussed supra. Since the matter is an old one, the court below shall make an endeavor to dispose of the suit as expeditiously as possible, preferably within a period of six months. The Appeal is allowed to the limited extent indicated above. No order as to costs.