GOVINDA PAI Vs. VELU

JUDGEMENT

(1.) THIS appeal,by a plaintiff,is against an order of remand.

(2.) ON 22nd September 1948,the respondent -defen­dants,who are admittedly agriculturists entitled to the benefits of Kerala Act 31 of 1958,borrowed Rs.4,250 from the appellant -plaintiff on the possessory mortgage,Ext.P -2,under the terms whereof the profits accruing from the mortgaged property were to be appropriated in lieu of interest.On 27th March 1950,they paid a sum of Rs.2,500 towards the debt,thus reducing the principal to Rs.1,750.On the same day,they took the property back on lease under Ext.P -1 for an annual rent of Rs.210,which works out exactly to interest at 12 per cent per annum on the outstanding principal.( This shows that though no rate of interest is specified in the mortgage,the provision being that the entire profits should be appropriated in lieu of interest,the interest could not have worked out to less than 12% per annum.) In 1960 the plaintiff brought his present suit in which(after an amendment of the plaint on the basis that the defendants were entitled to the benefits of Act 31 of 1958)he sought a decree for the outstanding principal of Rs.1,750 together with interest thereon at 5% per annum from 27th July 1958,the rent due under Ext.P -1 up to that date having been paid in full.

(3.) THE defendants contended that,although the mortgage,Ext.P -2,purported to be a possessory mortgage,possession was not,in fact,handed over,and that,till the date of the leaseback under Ext.P -1,they were paying interest at the rate of 12% per annum.They therefore demanded that the debt be scaled down under the provi­sions of the Act,interest being allowed only at the rate of 5% per annum from the date of the mortgage in accor­dance with section 5.