MOHANLAL Vs. KALLOO

JUDGEMENT

(1.) THIS reference arises out of a suit instituted by the petitioner Mohanlal for recovery of Rs. 104 as the balance of principal and Rs. 19 -8 -0 as interest on the basis of a bond. The question referred to by the learned single Judge for decision is : -

(2.) WHETHER a debtor is entitled to invoke benefit of section 3 of the Madhya Bharat Interest Act, 1956, so as to claim a readjustment of interest already paid by him or appropriated by the creditor at a rate higher than the maximum permissible under that section ?

(3.) IN the context of these facts, the real question that arises for determination is whether the lower Court was justified in scaling down the interest under Section 3 of the M. B. Interest Act, 1956. If the reduction of the rate of interest is justified, then clearly in order to give effect to the reduction it would be open to the Court to make a readjustment of the interest amount already paid by the debtor or appropriated by the creditor so as to make the payment of interest in conformity with section 3 of the Act. If a redaction of the rate of interest under section 3 is not permissible in a particular case, then obviously no question of readjustment of interest amount already paid at the stipulated rate can arise.