MASTAN SINGH Vs. SOHAG WANTI

JUDGEMENT

(1.) The only point of law involved in this Letters Patent appeal is whether the representatives of a debtor can also take benefit of the provisions of Section 5, Patiala Relief of Indebtedness Act.

(2.) The facts out of which the dispute arose are these: One Kaka Ram mortgaged his house in Sunam for Rs. 310 to Babu Lal by a regd. Deed dated 1-7-81. The mtge. was with possession & one of its essential terms was that the mtgor. was to pay interest on Rs. 310 at the rate of 1 1/4 per cent. per mensem & the rent received by the mtgee. was to be credited to his account. It was also stipulated that in case of default of payment of the balance of the annual interest the mtgee. was entitled to recover the prinoipal as well as unpaid interest from the mortgaged property & also from the person & other property of the mtgor. The mtgee. rights were subsequently transferred by Babu Lal in favour of the applts Mastan Singh & Ors. for Rs. 450 by a regd deed dated 14-11-87. Some ten years after the death of Kaka Ram, the mtgor. his daughtors Mt. Sohag Wanti & Bhagwanti resps. brought the present suit for redemption of the house on payment of Rs. 310. The original mtgee. & also his transferees were marshalled as defts. The defts. did not object to the pltf.'s right to redeem but demanded Rs. 1240-3-0 as the amount due to them on the mtge. The only dispute between the parties thus was regarding the amount that was payable to the defts. The trial Sub-Judge found this amount to be Rs. 237-3-0 & decreed the suit on payment thereof. The Dist. J. on defts.' appeal raised it to Rs. 995, Pltfs. second appeal to this Ct. was accepted & the redemption was allowed on payment of Rs. 326-5-0 only. The Single Bench has, however, certified the case to be a fit one for appeal Under Section 52 of Ordinance X [10] of 2005, & this is an appeal by the defts.

(3.) The only item that is disputed before us is that of interest. The stipulated rate of interest, as already observed, was Rs. 1-4-0 per cent. per mensem, i.e. Rs. 15 per oent. per annum & if the interest is calculated at this rate it comes to Rs. 1029-6-0 which is the amount claimed by the applts. On the other hand, the case of the resps. is that according to Section 5, Relief of Indebtedness Act the maximum rate of interest permissible ia Rs. 7/8 per cent. per annum, & when calculated at this rate, the amount comes to Rs. 514. This is what has been allowed by the Single Bench. It may be mentioned here that Section 6, Patiala Relief of Indebtedness Act, makes Part 3 of the Act in which Section 5 falls, applicable to all suits pending on or instituted after the commencement of the Act. The Act came into force in Sawan 2000 & the suit was brought in 2003. Section 5 of the Act admittedly applies to secured as well as unsecured debts & Sub-section (3) of it enjoins that the section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security. The present case would thus be admittedly hit by Section 5 of the Act if the section is otherwise applicable. Now Section 5 lays down that notwithstanding anything contained in any other enactment in force in the State for the time being, wherein any suit brought against a debtor whether agriculturist or not, & whether heard ex parte or otherwise, the Ct. has reason to believe that the interest is excessive.