CHERUVU NAGESWARASWAMI Vs. VADREVU VISWASUNDARA RAO

JUDGEMENT

(1.) The appellant before us is the sixth defendant in a suit, commenced by the plaintiff-respondent in the Court of the Subordinate Judge at Masulipatam (being Original Suit No. 29 of 1937) for recovery of a sum of Rs. 99,653 annas odd by enforcement of a simple mortgage bond. The mortgage bond is dated 28-9-1930 and it was executed by defendant No. 1 for himself and as guardian of his two minor sons-defendant 2 and 3--all of whom constituted together a joint Hindu family at that time. The plaintiff mortgagee happens to be the son-in-law of defendant 1 and at the time of the execution of the mortgage the first defendant it was indebted to a large number of persons including the mortgagee himself, and being hard pressed by his creditors requested the plaintiff to lend him a sum of Rs. 1,25,000 on the hypothecation of the properties in suit, to enable him to tide over his difficulties and discharge his debts, The total consideration of Rs, 1,25,000 as stated in the deed is made up of the following items:-

(2.) The money lent was to carry interest at 7 1/2 per cent simple, per annum and the due date of payment of the principal money was 30-9-1933. The interest would, however, have to be paid annually on the 30th of September every year, in default of which the whole of the principal and interest in arrears would become repayable immediately with interest at 9 per cent compound per annum with yearly rests. It was expressly stated in the mortgage deed that if the mortgagee was unable to advance the entire amount of Rs. 1,25,000, the terms set out. above would apply to the amount actually advanced. It appears that after the execution of the mortgage bond a sum of Rs. 3,000 only was paid by the mortgagee to defendant 1 on 5-11-1930. In the plaint, which was filed by the plaintiff on 15-9l937, the total claim was laid at Rs. 99,653 annas odd, out of which Rs. 55,287 annas odd constituted the principal money as stated above and the, rest was claimed as interest calculated at the rate of 9 per cent per annum compound with yearly rests.

(3.) Besides the original mortgagors, who were defendants 1 to 3 in the suit, there were three other persons impleaded as parties defendants. Defendant 4 was the Receiver in insolvency in whom the entire estate of the defendant 1 vested by reason of his being adjudged a bankrupt by an order of the District Judge of Kistna dated I8-1-1932 in Insolvency Proceeding No. 20 of 1931, started at the instance of another creditor of the first defendant. Defendant 5 was a lessee in respect of the mortgaged properties under defendant 4, while the sixth defendant was the purchaser of all the mortgaged properties from the Receiver in insolvency. The Receiver, it seems, had put up all the suit properties to sale subject to the mortgage, on 19-4-1937 and they were knocked down to defendant 6 for the price of Rs. 1,340. A registered deed of sale was executed by the Receiver in favour of the purchaser on 20-1-1939.