Manohar Lall, J - (1.)This is an appeal by the plaintiff against a decision of the learned Subordinate Judge dated 2 March, 1936, by which he decreed in part the suit of the plaintiff, which was instituted to recover his dues on the basis of two mortgage bonds dated 16 February 1926 and 11 November 1927. The defendants have also preferred a cross objection. The appeal and the cross objection are both concerned with the question of interest. The learned Subordinate Judge decreed the interest in favour of the plaintiff on the two bonds at the rate of 10 annas per cent, per mensem with yearly rests instead of 12 per cent. per mensem with yearly rests in the case of the first bond of 1926 and 13 per cent, with yearly rests in the case of the second bond of 1927 as claimed by the plaintiff; hence the appeal on behalf of the plaintiff before us.
(2.)The defendants, on the other hand, by their cross objection seek to reduce the interest decreed by the Court below to simple instead of compound with yearly rests. The suit was instituted on 20 December 1934; the principal contest between the parties on the matter which is now before us, was as to whether there was no legal justification for charging the rate of interest as stated in the two bonds. It was also pleaded that under the Usurious Loans Act the transaction as to the rate of interest was hard, unconscionable and unfair, between the parties, and, that the plaintiff had taken advantage of his relationship with defendant 1, who is now contesting the case, and his father, since deceased.
(3.)A large number of cases, which have centred round the question of interest which are usually cited, were placed before us on behalf of the parties. But it is now well settled, as was pointed out by the learned Subordinate Judge in the course of ,his judgment under appeal, that each case depends upon its own facts and circumstances, and that although in some cases the Courts have allowed simple rate of interest and in other cases the Courts have allowed compound rate of interest, at varying rates, it is impossible to lay down any hard and fast rule. The question as to what is a "commercial rate of interest" was decided by their Lordships of the Privy Council in Sunder Mall V/s. Satya Kinker A.I.R (1928) . P.C. 64 where the earlier relevant cases were reviewed. It is well to bear the observations of Viscount Sumner in this case as to the meaning of the words to "borrow upon reasonable commercial terms" in order to decide the matters in issue. It is a matter of common experience in this Court that it is usual for rates of interest to be charged upon secured loans amounting to one per cent. Per mensem, and in some circumstances even going as high as two per cent, per mensem compound: Dalip Narayan Singh V/s. Sharfunnissa A.I.R (1929) Pat. 383. Considering the circum. stances in the present case, I do not see anything unusual in the plaintiff having charged interest at the compound rate at twelve per cent.