Judgment : The sole plaintiff in O.S.No.62 of 1999 on the file of the learned Additional District Judge, Vizianagaram is the appellant. It filed the suit for foreclosure of mortgage created for repayment of loan obtained by the respondents herein. A sum of Rs.2,75,000/- was borrowed by the respondents from the appellant in the year 1985. Mortgage was created. One of the stipulations is that the amount shall carry interest at the rate of 27.54% per annum. Stating that the respondents did not repay the amount, as promised, the suit was filed for recovery of a sum of Rs.19,43,000/- with interest at the rate of 27.54% per annum. Prayer was also made for a preliminary decree against the 1st respondent for a sum of Rs.8,16,890/-due under the mortgage loan, fixing the time for repayment, to pass a final decree for the said amount and to put the plaint A schedule property to sale, if the amount is not recovered. The manner, in which the amount was advanced and the terms of the mortgage, were furnished in detail. The respondents opposed the suit by raising several objections. One of it was that the interest levied by the appellant is excessive and usurious. Since the borrowing of the loan is evidenced by the execution of mortgage deed, there was not much resistance in that behalf. Through its judgment, dated 16.08.2000, the trial Court passed a decree to the effect that the appellant is entitled to recover the original loan amount of Rs.2,75,000/-together with interest at the rate of 13% per annum with yearly rests from the date of transaction i.e., 26.08.1985 till the date of filing of the suit; and with simple interest at the rate of 13% per annum from the date of filing of suit till the date of realization. The method of repayment and the consequences that follow in the event of default, were also indicated. The appellant feels aggrieved by the slashing down of the rate of interest by the trial Court. Sri D.V. Seetharam Murthy, learned senior counsel appearing for the appellant submits that though the Court has discretion to vary the rate of interest from the date of filing of the suit, it has no power to meddle with the rate of interest agreed to between the parties for the period, anterior to the filing of the suit. Sri D.V. Seetharam Murthy, learned senior counsel appearing for the appellant submits that though the Court has discretion to vary the rate of interest from the date of filing of the suit, it has no power to meddle with the rate of interest agreed to between the parties for the period, anterior to the filing of the suit. He contends that the rate of interest incorporated in the agreement happens to be one of the important conditions and modification thereof by the Court would amount to novation of contract. He has placed reliance upon certain precedents on the subject. Sri Venkateswara Rao Gudapati, learned counsel for the respondents, on the other hand, submits that the very objective of enacting Usurious Loans Act, 1918 (for short ‘the Act’) is to ensure that no party levies interest, which is unconscionably excessive and that the trial Court has taken into account, the precedents on the subject and has arrived at a just and proper conclusion. He contends that the prayer made in the suit itself is in a way contrary to the terms of the agreement and that no exception can be taken to the decree under appeal. The trial Court framed the following issues for its consideration: 1. Whether the plaintiff is entitled to recover the suit amount, as prayed for? 2. Whether the plaintiff is entitled to a charge on the mortgaged property, as prayed for? 3. Whether the plaintiff is entitled for a personal decree against D.1? 4. Whether the interest claimed in the suit is usurious? 5. Whether the accounts shown in the account copy are not correct? To prove its case, the appellant examined P.Ws.1 and 2 and filed Exs.A.1 to A.26. On behalf of the respondents, the 2nd respondent deposed as D.W.1 and no other evidence was adduced. The only point that arises for consideration before us is as to whether the rate of interest claimed by the appellant is reasonable? The borrowing of loan of Rs.2,75,000/- by the respondents from the appellant is not in dispute. A perusal of the mortgage deed, dated 25.04.1996 marked as Ex.A.3 discloses that equitable mortgage was created in respect of a sum of Rs.2,60,000/- and simple mortgage in respect of Rs.15,000/-. The clause pertaining to rate of interest reads: 2(a) The party of the First Part shall charge interest at 14% per annum flat over the total amount advanced. A perusal of the mortgage deed, dated 25.04.1996 marked as Ex.A.3 discloses that equitable mortgage was created in respect of a sum of Rs.2,60,000/- and simple mortgage in respect of Rs.15,000/-. The clause pertaining to rate of interest reads: 2(a) The party of the First Part shall charge interest at 14% per annum flat over the total amount advanced. Both principal and interest are payable in equal monthly instalments as provided in this agreement. 2(b) Upon default of payment of instalments on the due dates as per this agreement, default interest of 2½% per month of delay or fraction thereof on the instalments or portion thereof in arrears shall be collected by the party of the First Part. It appears that levy of interest at the rate of 14% flat will work in such a way that though the amount paid by the borrower is deducted from the principal or from time to time, the interest would be levied on the entire amount, which is originally borrowed, till the entire transaction is complete. Obviously for this reason, in the suit, the appellant claimed the interest at the rate of 27.54% per annum. This is totally at variation with what is contained in Ex.A.3. If at all any demonstration was needed as to the usurious nature of interest, it is the appellant that has provided it. At the cost of repetition, it may be mentioned that Ex.A.3 stipulates the rate of interest at 14% per annum, but the hidden effect thereof would result in levy of interest almost at double the agreed rate. The very purpose of the enactment of the Act is to ensure that the persons, who are in need of money are not exploited by the lenders. The question as to whether a particular rate of interest can be treated as excessive or not, has been dealt with by the Hon’ble Supreme Court and various High Courts. Though the agreement as to rate of interest is a matter of contract between the parties, the reasonableness thereof certainly falls within the realm of adjudication on the touchstone of the settled principles. The trial Court has undertaken extensive discussion on this aspect. Detailed reference is made to a judgment of this Court in Sethmal and Co. vs. Sri Laxmi Paradise ( AIR 2000 AP 37 ), which in turn has taken into account the precedents on the subject. The trial Court has undertaken extensive discussion on this aspect. Detailed reference is made to a judgment of this Court in Sethmal and Co. vs. Sri Laxmi Paradise ( AIR 2000 AP 37 ), which in turn has taken into account the precedents on the subject. Certain factors, such as the loan having been secured, the purpose for which it was borrowed, the financial condition of the parties, were taken into account. Though the direction as to payment of interest at the rate of 13% per annum may appear to be the result of indulgence, if one takes into account the rate of 27.54% claimed by the appellant, in reality there is not much of relief granted to the respondents. The reason is that (a) the rate of interest at 27.54% per annum does not find place in Ex.A.3. (b) the rate of interest mentioned in Ex.A.3 is only 14% flat and not compound; and (c) what is granted by the trial Court is 13% compound interest with yearly rests. We do not find that the trial Court has committed any error on facts or in law. Therefore, the appeal is dismissed. The miscellaneous petition filed in this appeal shall also stand disposed of. There shall be no order as to costs.