RAI BAHADUR SETH GANGA SAGAR Vs. REOTI PRASAD

JUDGEMENT

(1.) This is an appeal by Rai Bahadur Seth Ganga Sagar, plaintiff, and arises out of a suit for sale on a mortgage dated 23 May 1934. The mortgage was executed by Reoti Prasad, defendant 1. The other two defendants in the suit were Kaushal Kishore and Brij Kishore, sons of Reoti Prasad. All the three-defendants were admittedly members of a joint Hindu family. The mortgage was for a sum of Rupees 37,000 and the stipulated rate of interest was 12 annas per cent. per mensem with six monthly rests. Out of the sum of Rupees 37,000 advanced under the mortgage deed in suit a sum of Rs. 2762-15-6 was paid to Reoti Prasad in cash before the sub-registrar, and the balance of the mortgage debt was admittedly borrowed for the satisfaction of debts due on the basis of numerous hundis executed by Reoti Prasad. It was recited in the mortgage deed that Reoti Prasad had started business in the name of Kaushal Kishore Shib Kumar at Aligarh and that in connexion with that business, he had incurred debts on the basis of hundis, and that the holders of the hundis were demanding the payment of the money due to them and were even prepared to file suits. It was also stated in the mortgage deed that because of the pressing demands made by the creditors it was necessary to raise a loan on the security of family property. The property mortgaged under the deed was admittedly ancestral property belonging to the defendants.

(2.) The suit giving rise to the present appeal was filed on 4 July 1935. Before the date of the institution of the suit Reoti Prasad had paid to Ganga Sagar, the mortgagee, a sum of Rs. 2220 on account of part of the interest that had accrued due on the mortgage debt, and the claim of the plaintiff was for the balance of the amount due, viz. for a sum of Rs. 38,510-2-6. All the three defendants filed three separate written statements. Reoti Prasad, while admitting the execution of the mortgage deed, denied the receipt of the entire consideration, and pleaded that the interest stipulated in the bond was excessive and unconscionable. He also maintained that he was an agriculturist within the meaning of the United Provinces Agriculturists Relief Act of 1934, and, as such, was, in any case, entitled to be allowed to pay the mortgage debt by instalments and, further, was entitled to have the rate of interest reduced in accordance with the provisions of the Act. Similar pleas were raised by the two sons of Reoti Prasad in their written statements and they also put the plaintiff mortgagee to proof of legal necessity.

(3.) The learned Civil Judge held that out of the sum of Rs. 37,000 an amount of Rs. 34,715-0-6 was proved to have been borrowed for the payment of antecedent debts due from Reoti Prasad, and that the balance of the amount, viz. a sum of Rupees 2284-15-6, was not proved to have been borrowed for legal necessity. He gave effect to the contention of the defendants that Reoti Prasad was an agriculturist and, accordingly, extended to the defendants the benefit of the provisions of the Agriculturists Relief Act. As a result of his findings, the learned Judge passed a decree for sale in favour of the plaintiff for a sum of Rs. 34,715-0- 6 with interest at Rs. 5-8-0 per cent. per annum with yearly rests from the date of the bond to 7 May 1935, and thereafter at Rs. 4-8-0 per cent. per annum and Rs. 4-4-0 per cent. with yearly rests (upto 30 September 1936, namely expiry of period of grace) in terms of Order 34, Rule 4, Civil P.C. He directed that the decretal amount would after 30 September 1936, carry interest at Rs. 3-4-0 per cent. per annum on the aggregate amount including costs. He also granted to the plaintiff a decree for a sum of Rs. 2284-15-6 personally against Reoti Prasad with interest at Rs. 9 per cent. per annum with yearly rests from the date of the bond upto 7 May 1935, and thereafter at Rs. 8 per cent. per annum upto 14 January 1936, and thereafter at Rs. 7-12-0 per cent. per annum.