LAWS(MAD)-1973-9-26

NAVIS AMMAL FERNANDO Vs. S. SUBBIAH IYER

Decided On September 13, 1973
Navis Ammal Fernando Appellant
V/S
S. Subbiah Iyer Respondents

JUDGEMENT

(1.) THE defendant in O.S. No. 76 of 1965 on the file of the Court of the Subordinate Judge of Tuticorin are the appellants herein. The suit was instituted by the respondent for recovery of a sum of Rs. 31,861 due on a mortgage admittedly executed by the first defendant -first appellant in favour of the respondent for Rs. 12,003. The mortgage deed is dated 1st August, 1953 and the same has been marked as Exhibit A -1 in these proceedings. Tae consideration recited in the document consists of three items, namely, (1) a sum of Rs. 8,600 paid by the respondent for and on behalf of and at the request of the first appellant to the second appellant (second defendant) on 1st May, 1963 by cheque No. 148689 on the Canara Bank issued in favour of the second appellant in discharge of the equitable mortgage in respect of the identical property created by the first appellant in favour of the second appellant for Rs. 8,000; (2) a sum of Rs. 2,305 -6 -0 being the amount due to the respondent by the first appellant in respect of the monthly auction chit conducted by the respondent and settled at that figure; and (3) a sum of Rs. 1,094 -10 -0 received as cash from the respondent. The rate of interest stipulated in the mortgage deed was 12 per cent per annum, interest accruing for each month being payable on the 10th of every succeeding month, for which, receipt was to be obtained then and there. The principal amount was to be paid in three years' time, that is, on or before the 1st August, 1956 and the mortgage deed got back with the endorsement of discharge. The document further provided that if interest was not paid monthly, the amount of monthly interest due should be added to the principal amount and the whole amount should carry interest at the rate of 131/2 per cent per annum and the entire amount of principal and interest due as aforesaid was to be realised in a lump sum whenever the plaintiff wanted, by proceeding against the mortgaged property and also personally. Contending that the first appellant had not paid any amount till date of suit towards the principal and interest due on the mortgage, the respondent instituted the suit. He stated in the plaint that he was satisfied with interest at 12 per cent per annum on the principal sum of Rs. 12,000 from 1st August, 1953 the date of mortgage to 10th September, 1953, when the first month's interest became due and payable and was not paid and thereafter simple interest at 131/2 per cent per annum from nth September, 1953 till date of suit and subsequent interest. The further case of the respondent was that on 27th October, 1965 the second appellant sent a registered letter to the respondent stating that he had purchased the mortgaged property on 22nd October, 1965 from the first appellant, that a sum of Rs. 5,622 -50 was reserved in the document of sale for payment in full of the amount due on the suit mortgage, that he was willing to pay the same and that he was not liable for interest thereafter. The respondent contended that the said sale deed was taken by the second appellant in collusion with the first appellant and her husband with ulterior design; that it was not a genuine transaction; that the second appellant knew that the amount as claimed on the suit -mortgage was due; that he was getting a document with false recitals for a lower amount than was actually due; that that itself showed the mala fides of the second appellant and that the sale is his favour was not genuine. According to the respondent, the offer by the second appellant of the said amount in full discharge of the suit mortgage debt was mala fide and it was promptly rejected by the respondent, since nothing was paid either towards the principal or towards interest due to the respondent under the mortgage deed, Exhibit A -1.

(2.) THE suit was resisted by the appellants herein. The first appellant -first defendant denied that the mortgage was supported by consideration to the extent of Rs. 12,000. She admitted that the mortgage was supported by consideration to the extent of Rs. 8,600, the amount which was paid by the respondent to the second appellant towards discharge of the equitable mortgage admittedly created by the first appellant, in favour of the second appellant. In effect, the first appellant denied the other two items of consideration. The further case of the first appellant was that she had made payments to the respondent and that the amount due under the mortgage was only a sum of Rs. 5,622 -50 which was reserved with the second appellant for payment to the respondent, when the property was sold by the first appellant in favour of the second appellant. The substance of the written statement of the second appellant was also the same. In addition to putting forward the above contentions, on merits, they further contended that the rate of interest provided for in the mortgage deed was penal and usurious and that the first appellant was entitled to claim the benefits of the Madras Agriculturists Relief Act (IV of 1938) and that the interest was liable to be scaled down under the provisions of the Usurious Loans Act (Central Act X of 1918) as well as the Madras Money -lenders Act, 1957.

(3.) WHETHER the first defendant is entitled to claim the benefits of the Madras Act IV of 1938 ?