KOCHUKUNJU Vs. JOSEPH

JUDGEMENT

(1.) Defendants 1 and 2 are the appellants. In resisting the plaintiffs' suit for recovery of the moneys due under Ext. A hypothecation bond, these defendants had contended that the interest claimed in the plaint is excessive and that plaintiffs are entitled to claim only the principal amount together with a moiety of the same by way of interest up to the date of the suit. The rate at which the interest was calculated by the plaintiffs was also objected to. The lower court repelled these contentions and gave a decree to the plaintiffs for recovery of the plaint amount with interest from the suit properties. Defendants have, therefore, come up in appeal.

(2.) The execution of Ext. A bond as well as the liability under it are admitted by the contesting defendants who are the appellants. Their main contention is about the calculation of the interest due to the plaintiffs. In the plaint calculation, the arrears of interest for each year have been added on to the principal and subsequent interest is calculated for the total amount. Plaintiffs adopted this kind of calculation on the strength of the provision contained in Ext. A that the arrears of interest will also be treated as principal carrying further interest. Plaintiffs cannot take advantage of such a provision contained in the bond so as to claim compound interest which is prohibited under law. No doubt, the parties are at liberty to enter into a contract that the interest due at the end of each year would be treated as a separate principal by itself carrying further interest at the stipulated rate. In such a case the amount due by way of arrears of interest for each year would be treated as a fresh loan. The necessary consequence is that the interest due on such amounts also will have to be limited to a moiety up to the date of the suit as per S. 31 of the Travancore Civil Procedure Code. This position is now conceded on behalf of the respondents also. The ruling in Philippose v. Gheevarghese Kathanar (XXIX TLJ 1275) is also to the same effect. Accordingly we uphold the appellant's contentions that in calculating the amount due to the plaintiffs on the date of the suit, the interest on the principal amount for each year from the date of Ext. A up to the date of the suit has to be treated as a separate principal amount and that the interest on such sum has to be separately calculated subject to thelimitation imposed by S. 31 of the Travancore Civil Procedure Code.

(3.) The second point urged on behalf of the appellants is that even though the stipulation in Ext. A. is to pay interest at 12%, they are bound to pay interest only at 6% for the period subsequent to 23.5.1112 on which date the Agriculturists' Relief Act of Travancore (Act III of 1112) came into force. In order that the appellants could get the benefit of that Act, it is necessary for them to establish that they are agriculturists as defined in that Act. But it is seen that these defendants had not set up any such definite plea in their written statement. No one of them has gone into the box to give evidence that they are agriculturists as defined in the Act. Under such circumstances, the plea that interest has to be limited to 6 per cent on the strength of the Agriculturists' Relief Act has necessarily to be negatived.