LAXMI CHAND GANGARAM Vs. BRIJBHUSHANDAS

JUDGEMENT

(1.) THE appellant's suit for sale against the respondents was in respect of mortgaged property on foot of a mortgage dated September 2, 1956, for Rs. 17,000/-, and another mortgage dated July 6, 1947, for Rs. 5,000/ -. The agreed rate of interest under the former was 10 annas per cent per month and under the latter 12 annas per cent per month. The suit was instituted on April 19, 1957. The defendants resisted the suit. The trial Court passed a preliminary decree for sale for the entire claim of the plaintiff i. e. principal sum Rs. 22,000/- and interest at the stipulated rates from the date of the execution of the mortgages to the date of the institution of the suit. But from the date of the institution of the suit to the date of preliminary decree it allowed 3% per annum (4 annas per cent per month ).

(2.) IN this appeal the plaintiff's grievance is that there was no justification for not allowing interest pendente lite at the contractual rates as it was mandatory under order 34, Rule 11, C. P. C. Alternatively, it is argued that discretion has been exercised arbitrarily. Under Order 34, Rule 11 of the Code of Civil Procedure a court may order payment of interest upto the date on which payment of the amount found due or declared under the preliminary decree is to be made by the mortgagor at the rate payable on the principal.

(3.) THE provisions now contained in Order 34, Rule 11 C. P. C. were enacted by the c. P. C. Amendment Act No. 21 of 1929. Earlier, in Jagannath Prosad v. Surajmul jalal, 54 Ind App 1 = (AIR 1927 PC 1), the suit was to enforce by sale a mortgage bond which provided for interest at 12% per annum with quarterly rests. The subordinate Judge passed a decree in favour of the plaintiff and allowed interest at 9% per annum until the date of the institution of the suit and 6% per annum from that date until payment. The plaintiffs appealed as to the interest allowed. The high Court allowed the appeal and made a decree for interest at 12% per annum with quarterly rests, as stipulated in the bond, to the date fixed by the decree for payment, and thereafter at 6% per annum. The Privy Council took the view that till the period of redemption has expired, the matter remains in contract and the interest has to be paid at the rate and with the rests specified in the contract of mortgage.