CHOTILAL SOWCAR Vs. R JAWANTRAJ SOWCAR

JUDGEMENT

(1.) THIS Letters Patent Appeal involves a question of considerable interest, which does not appear to have been the subject of judicial decision in the precise form in which it has been raised, so far, concerning the interpretation of S. 2 (3) (b) of the usurious Loans Act 10 of 1918. The preamble to this Act sets forth that "it is expedient to give additional power to Courts to deal in certain cases with usurious loans of money or in kind". The expression "suit to which this Act applies" is interpreted in S. 2 (3) as "any suit" to which S. 2 (3) (a) or (b) applies, S. 2 (3) (b) "for the enforcement of any security taken or any agreement. . . . . . . . "

(2.) WE are now in a position to describe the context of facts in which the argument has arisen. In consequence of certain acquisition proceedings relating to s. No. 3477, there was a reference to court under Ss. 30 and 31 (2) of the Land acquisition Act, by the Collector of Madras, on the ground of a dispute between a certain Jawantraj Sowcar, the owner of the property, who is the respondent herein, and Chotilal Sowcar, the mortgagee in respect of the same property, who is the appellant. A sum of Rs. 26126-12-6 was deposited into court, and portions of this amount were drawn by the respective claimants, upon a joint endorsement. The only question which was agitated before the learned Principal Judge in the City civil Court was that the interest stipulated in the promissory note embodied in the security (equitable mortgage by deposit of title-deeds), viz, 15 per cent annum compound, was excessive and usurious. The learned Judge, after referring to the arguments before him, determined the interest at 14 per cent simple. An appeal was instituted from this decision by Jawantraj Sowcar, the owner of the property, before Venkatadri J, in which the same issue, of very restricted scope was canvassed. Without deciding the particular ground of law, which is now urged before us, the learned Judge directed, as the course most equitable compatible with the interests of justice, that the difference claimed as payable towards interest might be disallowed. From this decision of Venkatadri J, the mortgagee (Chotilal Sowcar) has preferred the present Letters Patent Appeal.

(3.) THE issue that is involved may be tersely set forth as follows. As we have seen from the relevant provisions of the Usurious Loans Act, the words descriptive of the proceeding to which the Act applies, are "any suit" and under S. 2 (3) (b), it is clear enough that the language used by the legislature would include an action of this character, a mortgage claim of a security upon immoveable property. But this is not a mortgage suit in the formal sense. What was before court was a reference under Ss. 30 and 31 (2) of the Land Acquisition Act. Indisputably. S. 73 of the transfer of Property Act will apply to this security, and, since the property has been acquired under the Land Acquisition Act, under S. 73 (2), the mortgagee "shall be entitled to claim payment of the mortgage money, in whole or in part, out of the amount due to the mortgagor as compensation". The real point for our determination is whether the proceeding in court arising out of the reference can be justly or properly termed "a suit". If it is not a suit, the argument is certainly conceivable that the Usurious Loans Act itself will not apply, and consequently, that no relief can be granted to the mortgagor in the shape of reduction of the interest stipulated, though, otherwise, the rate might be usurious.