RAJARAM BAIJNATH Vs. NANDKISHORE SHEOBUX RAI

JUDGEMENT

(1.) THIS appeal by the plaintiffs is against the judgment and decree of the 3rd Additional District Judge, Bilaspur dated 25-4-1968 decreeing their suit for the enforcement by sale of the mortgaged property. The plaintiffs had brought the suit to recover Rs. 1,60,950 being the amount due under the mortgage, Rs. 1,50,000, as principal, and Rs. 10,950, as interest from 1-10-1962 to 18-12 1963. The learned Additional District Judge has, however, adjudged the sum due on the mortgage to be Rs. 70,125, by disallowing the entire interest including a sum of Rs. 79,875 paid by way of interest upto 1-10-1962 and adjusting the same towards the principal amount under clauses (b) and (c) of section 7 of the Madhya Pradesh Money-lenders act, 1934 (hereinafter referred to as "the Act" ).

(2.) THE facts are not in dispute. By a deed of settlement dated 13-5-1946, ex. P-64, the trust known as "seth Kirodimal Charity Trust", Raigarh was created. The settler Seth Kirodimal made over a sum of Rs. 30,00,000 to the board of Trustees constituting himself to be its Chairman, to hold upon the trust and for the purposes mentioned therein. The trust was registered as a public trust under the Madhya Pradesh Public Trusts Act, 1951, and was a trust for charitable purposes i. e. establishment and maintaining of hospitals, medical colleges, etc. The trustees by clause 5 of the deed, Ex. P-64, were empowered to make investments of the trust's funds. Clause 5, so far as relevant, reads:

(3.) THE defendant No. 1 Nandkishore and his father Seth Sheobux Rai, since deceased, borrowed from Seth Kirodimal, a sum of Rs. 1,50,000 on 18-11-1953 at Bilaspur for payment of their antecedent debts amounting to rs. three lacs and odd due on 7-11-1953 corresponding to Diwali Samvat 2010 to M/s Paluram Dhanania, Raigarh, a joint family business of which Seth paluram, the munim of Seth Kirodimal and a member of the Board of Trustees, was the karta. It appears that a telephonic message was received from Seth sheobux Rai by Seth Kirodimal and he sent the amount of Rs. 1,50,000 through mangiram (P. W. 2), munim of M/s Paluram Dhanania. The defendant No. 1 Nandkishore and his father Sheobux Rai, thereupon jointly executed the mortgage deed dated 18-11-1953, Ex. P-63, mortgaging their Flour and Dal mills known as "shri Krishna Rice Mills", Bilaspur as a security for repayment of the loan. On 20-11-1953, they repaid Rs. 1,50,000 to M/s Paluram Dhanania as per rokad, Ex. P-106. The mortgage amount was, therefore, borrowed by them to repay the debt of Seth Paluram. Incidentally, the application for registration, Ex. D-l, shows that Bhagirath Lal Gupta son of Seth Paluram became a partner of the firm Shri Krishna Rice Mills w. e. f. 7-11-1953.