JAGANNATH RANGO DANDEKAR Vs. BHASKAR GOPAL BHAT

JUDGEMENT

(1.) This second appeal arises out of a suit brought in 1904 by the respondents for the redemption of a mortgage, dated the 18 of June, 1867. The terms of the mortgage were that interest should run at 20 per cent, on the principal sum, Rs. 299, that compound interest should be charged, that the mortgagee should go into possession and enjoy the rents and profits in lieu of principal and interest, and that the mortgagor should redeem on payment of what might be found due on taking accounts. The Subordinate Judge, who tried the suit in the first instance, raised three issues, none of which covered the question whether on account of the stipulation as to compound interest or any other circumstances surrounding the transaction the mortgage was an unconscionable bargain, calling for equitable relief. But in the course of his judgment he observed that " on account of the high rate of interest with a stipulation to charge interest on interest the burden of redemption becomes so enormous, so much beyond the actual value of the property that it seems a decree for redemption on payment of one lakh of rupees would be virtually a decree declaring that the mortgage cannot be redeemed." As the appellant before us, who represented the mortgagee, had failed to produce proper accounts, the Subordinate Judge held that the case was one to which the principle of damdupat applied. Accordingly, he passed a decree for redemption on payment of Rs. 598 and costs.

(2.) The present appellant appealed from that decree to the District Court. The appeal was at first heard by the Subordinate Judge, First Class, with appellate powers, and he remitted the case to the Court, which had tried the suit, directing that a certain person should be brought on the record, and findings recorded on issues framed by the appellate Court. When those findings were returned, the appeal was heard by the District Judge. He accepted those findings except as to the accounts taken on the mortgage. As to those accounts, he sent the case back to the Subordinate Judge with the direction that they should be taken in accordance with the terms of the deed of mortgage, especially with reference to the term as to compound interest; and in his interlocutory order so directing he said:- On the finding being returned, the Court will consider whether the stipulation as to compound interest should be enforced.

(3.) The Subordinate Judge, on taking the accounts on the footing of the mortgage, found that the principal debt of Rs. 299 due on it had stollen, after calculating interest and compound interest and deducting the profits and necessary charges, to two lacs and odd rupees.