Usurious interest claim failed where agriculturist status was unproved and no evidence showed the rate was excessive

Contractual interest was not shown to be excessive or usurious under the Usurious Loans Act, 1918, because the plea of agriculturist status under Section 3(2)(b) was neither properly pleaded nor supported by reliable proof. No issue had been framed on that basis, and the evidence did not establish the status with sufficient certainty. The Court also found no pleaded or proved case of substantially unfair or unconscionable bargain. In assessing excessiveness, the relevant factors include the nature and value of the security, prevailing market rates, and surrounding circumstances; on this record, the absence of evidence on security value or market rate, and the regulated character of the lending institution, meant the stipulated interest was not prima facie excessive.

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Issues: Whether the contractual interest at 11% per annum with half-yearly rests was liable to be reduced as excessive or usurious under the Usurious Loans Act, 1918, and whether the proviso relating to agriculturists under Section 3(2)(b) applied.

Analysis: The appellants had not pleaded in the written statement that they were agriculturists, and no issue had been framed on that basis. The evidence also did not establish that status with sufficient certainty. The Court further found that no case of substantially unfair or unconscionable bargain had been pleaded or proved. The decision on excessiveness depended on the facts of each case, including the nature and value of security, market rate of interest, and surrounding circumstances. On the record, there was no evidence as to the value of the security or the prevailing market rate, while the lending institution's regulated character and the contract's reference to Reserve Bank of India-linked interest did not make the rate prima facie excessive.

Conclusion: The proviso to Section 3(2)(b) did not apply, and the interest stipulated in the decree was not shown to be usurious or excessive.

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