KANCHERLA NARASIMHAM Vs. MAHABUBUNNISA BEGUM

JUDGEMENT

(1.) .The above Revision Petition has been referred to a Bench at the instance of our learned brother Satyanarayana Raju, J., who felt that there was an apparent conflict between the view represented by the decision in Sreenivasa Rao v. Abdul Rahim Saheb (1956) a M.L.J. 189. and Sait Nainamul v. Subba Rao (1957) 2 An.W.R. 53 (F.B.).. The facts relevant for the disposal of this Revision Petition may be stated briefly.

(2.) The plaintiff borrowed a sum of Rs. 2,500 on 24th December, 1951, from the defendant, Kancherla Narasimham, and executed a mortgage to secure repayment of the said sum stipulating to pay an interest of 12 per cent, per annum. On 26th December, 1951, the plaintiff borrowed from the defendant a sum of Rs. 1,500 and executed a promissory note in his favour agreeing to pay 12 per cent, interest per annum. On 12th February, .1954, the plaintiff sent a sum of Rs. 1,100 by bank-draft towards the promissory note, which was credited to the principal due thereunder. On 23rd June, 1954, the plaintiff sent another sum of Rs. 1,900 towards the debt due under the mortgage. On 16th August, 1954, she sent a further sum of Rs. 1,400 by a bank-draft. These payments are not in dispute. There is, however, a controversy as to the appropriation of the sum of Rs. 1,400 sent by bank-draft, which will be referred to later.

(3.) The defendant instituted O.S. No. 224 of 1955 on the file of the District Munsif's Court, Bhimavaram, for the recovery of the money due under the mortgage executed by the plaintiff on 24th December, 1951. The present plaintiff contested that suit inter alia on the ground that out of Rs. 1,400 sent by bank-draft the defendant should have credited only Rs. 568-12-9 towards the interest at the rate of 5 1/2 per cent, per annum as permitted under Act IV of 1938 instead of Rs. 859-11-0 which he actually credited and that the balance between the latter and the former should have been credited towards the mortgage. In that suit, however, this question was not gone into and the plaintiff was given liberty to file a suit for the recovery of the dues of Rs. 272-14-6. The mortgage suit ended in a decree and we are not concerned with it in the present proceedings. The plaintiff has now launched the present action for the recovery of Rs. 300-11-0 representing the said sum of Rs. 272-14-6 and subsequent interest thereon at the rate of Rs. 54 per cent, per annum. The plaintiff's case is that the defendant knew that she was an agriculturist, that in law he was not entitled to take more than 54 per cent, on the promissory note loan, that when he received Rs. 1,400 by bank-draft there was an agreement that he would collect interest only at 5 1/2 per cent., and that in derogation of such an agreement he credited towards the promissory note the sum of Rs. 859-11-0 at the contract rate, and that, therefore, the plaintiff is entitled to recover the difference.