Judgment 1. This appeal is focussed by the plaintiff in the suit, as against the judgement and decree dated 25.3.1983 passed by the Principal Subordinate Judge, Coimbatore, which was one for recovery of money. 2. This is a very old appeal of 20 years old. The original defendant died pending appeal and his L.Rs have been brought on record, but no one has appeared before this Court, despite service of notice having been effected as per law. 3. The parties, for the sake of convenience, are referred to hereunder according to their litigative status and ranking before the trial Court. 4. A recounting and recapitulation of the relevant facts absolutely necessary and germane for the disposal of this appeal would run thus: (i) The appellant/plaintiff filed the suit for recovery of a sum of Rs.37,800/- based on the suit promissory note. (ii) The original defendant resisted the suit by pleading that there was no loan transaction based on pro-note, but he borrowed only a sum of Rs.11,000/- from the plaintiff and in consideration of the same, he created a mortgage by deposit of title deeds in favour of the plaintiff. In fact, after deducting service charges, a sum of Rs.9,829.75 was paid by the plaintiff to the defendant by way of cheque on 28.9.1977. In such a case, the suit claim is bad in law and accordingly, the defendant prayed for the dismissal of the suit. (iii) Whereupon the trial Court framed the issues. (iv) During trial, on the plaintiff's side, one Rengasamy examined himself as P.W.1 and Exs.A1 to A9 were marked. On the defendants' side, the original defendant examined himself as D.W.1 and marked Exs.B1 to B9. (v) Ultimately, the trial Court decreed the suit partly holding that the suit promissory note was supported by consideration, only to a tune of of Rs.11,000/-, out of Rs.20,000/-as claimed in the suit. 5. Being aggrieved by and dissatisfied with the same, the plaintiff filed this appeal on various grounds. 6. The learned counsel for the appellant/plaintiff, by placing reliance on the grounds of appeal, would develop his arguments, the pith and marrow of them would run thus: (i) The trial Court fell into error in holding as though the suit promissory note was not supported by consideration to a tune of Rs.9,000/-out of Rs.20,000/, which finding of the trial Court is totally against Section 118 of the Negotiable Instruments Act. (ii) The evidence of P.W.1 as found set out in the judgement of the trial Court itself would amply make the point clear that the trial Court was misled by the defendant, by pointing out certain entries, which were not related to the suit transaction. (iii) In the absence of any evidence adduced on the side of the defendant, the trial Court was not justified in rejecting the part of the claim of the plaintiff. Accordingly, the learned counsel for the appellant/plaintiff would pray for decreeing the suit in entirety. 7. The records would reveal that the appeal was filed in the year 1983; however, it was numbered only in the year 1991. When this Court called for records from the trial Court, the reply was to the effect that the relevant part-III records were destroyed by the District Court, as per Rules and only the following documents were sent to this Court: 8. The learned counsel for the appellant/plaintiff also would submit that they are not having any certified copies of the deposition as well as the documents marked and there is no possibility of re-constituting those records also; however he would entreat and implore that from the available materials, the appeal might be disposed of. 9. The original defendant died and his LRs have not entered appearance, despite, as pointed out above, they having been served as per law, including service by publication as far as R3 is concerned. 10. The points for considerations are as follows: (i) Whether the trail Court was justified in rejecting part of the claim of the plaintiff, without adhering to Section 118 of the Negotiable Instruments Act? (ii) Whether the reliance placed by the trial Court on certain entries found in the ledger book of the plaintiff was sufficient to reject the claim of the plaintiff to the tune of Rs.9,000/- out of the total principal sum of Rs.20,000/- contemplated in Ex.A1-the promissory note? (iii) Whether 25% interest per annum claimed by the plaintiff and awarded by the lower Court is justifiable and whether pendentelite interest awarded at the rate of 18% p.a. also was justified even though there was no reference in the records that the loan transaction was for commercial purpose? (iv) Whether there is any perversity or illegality in the judgement and decree of the trail Court? 11. (iv) Whether there is any perversity or illegality in the judgement and decree of the trail Court? 11. Points (i) & (ii): Both these points are taken together for discussion, as they are interwoven and interlinked, interconnected and entwined with each other. 12. At the outset itself I would like to point out that the precise finding of the trial Court was that D.W.1(the defendant) candidly and categorically, without any reservation admitted the promissory note as the one executed by him. In such a case, presumption under Section 118 of the Negotiable Instruments act was squarely attracted, whereby it could safely be held that the burden of proof was on the defendant to prove that the suit promissory note was not supported by consideration to a tune of Rs.9,000/- out of the principal sum of Rs.20,000/- specified therein. 13. The defendant indubitably and indisputably, unarguably and unassailably failed to produce positive evidence. However, he would place reliance on the entries in the ledger book of the plaintiff. No doubt, evidence can be in any form, but that evidence should be consistent and to the point. 14. P.W.1 while speaking about the entries in the ledger of the plaintiff would clearly and categorically point out that the loan transaction was covered by loan No.215, whereas, the trial Court placed reliance on the entry dated 28.9.1977, which was marked as Ex.A6 and held that only a cheque for Rs.9829.75 was issued on 28.9.1977 by the plaintiff to the defendant and not Rs.20,000/-. The trial Court also would proceed to held that on the said date i.e. on 28.9.1977, the plaintiff's bank balance itself was only Rs.1,676/- and as such, it could not have issued a loan of Rs.20,000/-. 15. Ex facie and prima facie, from the very detailing of the facts by the trial Court in its judgement, it could rightly be held that the trial Court misled itself and simply took the defendant's case for gospel truth. It is the case of the defendant that the loan transaction with the plaintiff was only based on the mortgage by deposit of title deeds created by the defendant in favour of the plaintiff. There is nothing to indicate till now as to what happened to that transaction. It is the case of the defendant that the loan transaction with the plaintiff was only based on the mortgage by deposit of title deeds created by the defendant in favour of the plaintiff. There is nothing to indicate till now as to what happened to that transaction. P.W.1, as found in the judgement itself stated that there were several transactions, which the defendant had with the plaintiff and in that connection there were various entries in the ledger book of the plaintiff. 16. The defendant, who wants equity in his favourshould have disclosed all the details of the several transactions with the plaintiff. The lower Court virtually dealt with the depositions of P.W.1 and D.W.1 and also the documents on either side, so that, it has become easy for this Court to refer to the details of evidence. 17. The learned counsel for the appellant/plaintiff would appropriately and appositely, convincingly and legally point out that the written statement was bereft of any details and the defendant tried to cull out certain facts from the ledger entries of the plaintiff. In the judgement, the learned Judge himself observed that P.W.1 referred to various debts of the defendant. In such a case, the trial Court of its own accord in paragraph Nos.6 & 7 was not justified in simply equating the suit transaction with some of the entries, which were unconnected, apparently, with the suit transaction. 18. Section 118 of the Negotiable Instruments Act, no doubt, contains a rebuttable presumption, but it should be by adducing clinching evidence. But here I could see no such clinching evidence and there is no connection between the loan transaction and the entries relied on by the lower Court for slashing down the principal amount to the tune of Rs.9,000/- out of Rs.20,000/-. Here a little, there a little, picking and choosing of certain entries in the ledger of the plaintiff, by the defendant and trying to create a cloud in the mind of the Court about the suit transaction cannot be taken as evidence in rebuttal within the meaning of Section 118 of the Negotiable Instruments Act. Merely because on the date of plaint, there was a ledger entry, it cannot be assumed that the said entry was relating to suit transaction. 19. Merely because on the date of plaint, there was a ledger entry, it cannot be assumed that the said entry was relating to suit transaction. 19. The learned counsel for the plaintiff would appropriately and appositely argue that if really the suit pro-note was not meant for a separate loan, then the core question would arise as to what prompted or necessitated the defendant to make endorsement i.e. Ex.A2, dated 2.7.79, by paying a sum of Rs.500/- towards interest on the suit pro-note itself. Merely because the opening balance on 28.9.77 of the plaintiff was Rs.1,676/-, that it does not mean that the plaintiff could not have paid Rs.20,000/- on that day to the defendant. The trial Court, on conjectures and surmises partly decreed the suit, disallowing Rs.9,000/- out of Rs.20,000/--the principal amount. Hence, I would like to hold that the pro-note was for the full consideration of Rs.20,000/-. Accordingly, the judgement and decree of the lower Court should be modified and accordingly, Points (i) and (ii) are answered. 20. Point Nos.(iii) and (iv): Nowhere it is found stated that the loan was for commercial purpose, wherefore, I am of the considered view that by any standard, the plaintiff's claim for 25% interest per annum from the date of borrowal till realization is exorbitant. Awarding 18% interest per annum from the date of suit till the date of decree would meet the ends of justice. 21. Section 3 of 'The Interest Act' and 'The Usurious Loans Act, 1918' are re-produced hereunder. Awarding 18% interest per annum from the date of suit till the date of decree would meet the ends of justice. 21. Section 3 of 'The Interest Act' and 'The Usurious Loans Act, 1918' are re-produced hereunder. "Sec.3 of the Interest Act.Power of Court to allow interest – (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say,- (a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings; (b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings: Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment. (2) Where, in any such proceedings as are mentioned in sub-section (1) - (a) judgement, order or award is given for a sum which, apart from interest on damages, exceeds four thousand rupees, and (b) the sum represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then, the power conferred by that sub-section shall be exercised so as to include in that sum interest on those damages or on such part of them as the Court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the proceedings, unless the Court is satisfied that there are special reasons why no interest should be given in respect of those damages. (3) Nothing in this section,- (a) shall apply in relation to- (i) any debt or damages upon which interest is payable as of right, by virtue of any agreement; or (ii) any debt or damages upon which payment of interest is barred, by virtue of an express agreement; (b) shall affect- (i) the compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in the Negotiable Instruments Act, 1881 (26 of 1881); or (ii) the provisions of Rule 2 of Order II of the First Schedule to the Code of Civil Procedure, 1908(5 of 1908); (c) shall empower the Court to award interest upon interest." "Sec.3 of the Usurious Loans Act, 1918 – Re-opening of transaction –(1) Notwithstanding anything in the Usury Laws Repeal Act 1855 where in any suit to which this Act applies whether heard ex parte or otherwise the Court has reason to believe - (a) that the interest is excessive; and (b) that the transaction was as between the parties thereto substantially unfair, the Court may exercise all or any of the following powers, namely, may,- (i) re-open the transaction take an account between the parties and relieve the debtor of all liability in respect of any excessive interest; (ii) notwithstanding any agreement purporting to close previous dealings and to create a new obligation re-open any account already taken between them and relive the debtor of all liability in respect of any excessive interest and if anything has been paid or allowed in account in respect of such liability order the creditor to repay any sum which it considers to be repayable in respect thereof; (iii) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan and if the creditor has parted with the security order him to indemnify the debtor in such manner and to such extent as it may deem just; Provided that in the exercise of these powers the Court shall not- (i) re-open any agreement purporting to close previous dealings and to create a new obligation which has been entered into by the parties or any persons from whom, they claim at a date more that twelve year from the date of the transaction; (ii) do anything which effects any decree of a Court. Explanation – In the case of a suit brought on a series of transactions the expression "the transaction" means for the purposes of proviso (I) the first of such transactions. (2) (a) In this section "excessive" means in excess of that which the Court deems to be reasonable having regard to the risk incurred as it appeared or must be taken to have appeared to the creditor at the date of the loan. (b) In considering whether interest is excessive under this section the Court shall take into account any amounts charged or paid whether in money or in kind for expenses inquiries fines, bounses, premia, renewals or any other charges and if compound interest is charged the periods at which it is calculated and the total advantage which may reasonably be taken to have been expected from the transaction. (c) In considering the question of risk the Court shall take into account the presence or absence of security and the value thereof the financial condition of the debtor and the result of any previous transaction of the debtor by way of loan so far as the same were known or must be taken to have been known to the creditor. (d) In considering whether a transaction was substantially unfair the Court shall take into account all circumstances materially affecting the relations of the parties at the time of the loan or tending to show that the transaction was unfair, including the necessities or supposed necessities of the debtor at the time of the loan so far as the same were known or must be taken to have been known to the creditor. Explanation – Interest may of itself be sufficient evidence that the transaction was substantially unfair. (3) This section shall apply to any suit whatever its form may be if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security. (4) 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. (4) 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. For the purposes of this sub-section, the word "notice" shall have the same meaning as is ascribed to it in section 4 of the Transfer of Property Act, 1882. (5) Nothing in this section shall be construed derogating from the existing powers of jurisdiction of any Court." 22. I hark back to the following decision of the Honourable Apex Court: 2009 (2) CTC 381 (C.K.Sasankan vs. The Dhanalakshmi Bank Ltd.). Certain excerpts from it would run thus: "3. The appellant is the son of late C.V.Kunjikuttan, who was carrying on business as a civil contractor. Said C.V.Kunjikuttan carried on business of contracts in his individual capacity. He died on 8th September, 1989 and on his demise, the business was taken over by his legal heirs. While C.V.Kunjikuttan was alive he had availed of certain facilities from Dhanalakshmi Bank Ltd., Cherthala Branch, AlappuzhaDistrict – respondent herein (for short the "Bank"). The respondent is a scheduled Bank and has its principal place of business at Thrissur in Kerala and Branches in various other places. C.V.Kunjikuttan approached the respondent-Bank in 1973 for sanction of an over draft financial facility. The Bank sanctioned him an overdraft facility of Rs.3 lakh. The overdraft facility allowed to C.V.Kunjikuttan was secured by security of immovable property, which was collateral security. On 30.10.1980, the Bank granted an enhanced overdraft facility of Rs.9 lakh which was secured by late C.V.Kunjikuttan and his children including the appellant herein. 7. In order to appreciate the aforesaid contention, we are required to consider the scope and ambit of Section 34 of the Code which get attracted in the instant case. The provisions of Section 34 of the Code are reproduced here in below" "34. 7. In order to appreciate the aforesaid contention, we are required to consider the scope and ambit of Section 34 of the Code which get attracted in the instant case. The provisions of Section 34 of the Code are reproduced here in below" "34. Interest – (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent, per annum as the court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the court thinks fit: Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I. - In this sub-section, "Nationalised Bank" means a corresponding new Bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). Explanation II. - For the purposes of this Section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability. (2) Where such a decree is silent with respect to the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie". 8. The quantum and rate of interest which the appellant in the present case is entitled to would be in accordance with the provisions of Section 34 of the Code. According to the provisions of Section 34 of the Code interest is to be awarded at a reasonable rate and on the principal amount. 8. The quantum and rate of interest which the appellant in the present case is entitled to would be in accordance with the provisions of Section 34 of the Code. According to the provisions of Section 34 of the Code interest is to be awarded at a reasonable rate and on the principal amount. It is needless to point out that although the amount of interest from the date of filing of the suit till the date of the decree and thereafter till realisation is in the discretion of the Court as is confirmed by the use of the word "may" but such discretion has to be exercised by the Court properly, reasonably and on sound legal principles and not arbitrarily and while doing so the Court is also to consider the parameter, scope and ambit of Section 34 of Code. 9. The aforesaid scope and ambit of Section 34 of the Code has been the subject of discussion in many cases of this Court. We are inclined to refer to the decision in Clariant International Ltd. V.Securities & Exchange Board of India, 2004 (8) SCC 524 , where it was held by this Court that the interest can be awarded in terms of an agreement or statutory provisions and it can also be awarded by reason of usage or trade having the force of law or on equitable considerations but the same cannot be awarded by way of damages except in cases where money due is wrongfully withheld and there are equitable grounds therefore, for which a written demand is mandatory. It was further held that in absence of any agreement or statutory provision or a mercantile usage, interest payable can be only at the market rate and such interest is payable upon establishment of totality of circumstances justifying exercise of such equitable equitable jurisdiction. It was also held that in ascertaining the rate of interest the Courts of law can take judicial notice of both inflation as also fall in Bank rate of interest. The bank rate of interest both for commercial purposes and other purposes has been the subject-matter of statutory provisions as also the judge-made laws. It was also held that in ascertaining the rate of interest the Courts of law can take judicial notice of both inflation as also fall in Bank rate of interest. The bank rate of interest both for commercial purposes and other purposes has been the subject-matter of statutory provisions as also the judge-made laws. In the said case reference was made to the decisions in Kaushnuma Begum v. New India Assurance Co.Ltd., 2001 (3) CTC 170 (SC): 2001 (2) SCC 9 ; H.S.Ahammed Hussain v. Irfan Ahammed, 2002 (6) SCC 52 ; and United India Insurance Co.Ltd. v. Patricia Jean Mahajan, 2002 (6) SCC 281 , and it was observed that even in cases of victims of motor vehicle accidents, the courts have upon taking note of the fall in the rate of interest held 9% interest to be reasonable. Direction to pay such rate of interest is also found to be reasonable and fair as the plaintiff was deprived to utilize and roll its money in commercial transaction and kept out of it due to wrongful withholding of the same by the defendant. 10. Considering the facts and circumstances of the present case, we find that the rate of interest as awarded for pendente lite and future interest is exorbitant and thus we direct that pendente lite and future interest at the rate of 9% shall be paid which is found to be just, proper and reasonable."(emphasis supplied) 23. The above decision is subsequently followed by this Court in the decision reportedin 2009(4) CTC 337 -M.S.Muthukumar vs. M/s.Skyline Financial Services, Madras P.Ltd.,rep.by its Managing Director and another. 24. As such, if it is found that in a contract, if the interest rate is unconscionable and usurious, the Court Court has got the power to interfere. Wherefore, I would like to reduce the interest rate from 25% to 18% from the date of pro-note till the date of filing of the suit. Pendentelite interest in non-commercial transaction is at the discretion of the Court and I am of the view that 6% interest could be awarded from the date of decree till realisation and not at 18%. 25. The plaintiff, who has chosen to claim more interestshould have been careful enough in getting it recorded that the transaction was for commercial purpose, if at all it was one for such purpose. 25. The plaintiff, who has chosen to claim more interestshould have been careful enough in getting it recorded that the transaction was for commercial purpose, if at all it was one for such purpose. But in the pleadings nothing could be seen that the loan was for commercial purpose. Hence, awarding of 18% interest per annum during the pre-suit stage and 6% per annum towards pendentelite and post decreetal stage would meet the ends of justice. Accordingly, point No.(iii) is decided. 26. In the result, the judgement and decree of the trial Court stands modified as under:- The defendants, jointly and severally are directed to pay a sum of Rs.20,000/- (Rupees twenty thousand) with interest at the rate of 18% per annum from the date of pro-note dated 28.9.1977 till the date of filing of the suit and 6% per annum from the date of decree till the date of realization on Rs.20,000/-. Since this decree is operable as against the legal heirs of the original defendant, it is executable subject to Section 50 of the C.P.C. 27. The appeal stands modified to the extent indicated above. However, there is no order as to costs.