CH HANUMAN SINGH Vs. CHGAYA SINGH

JUDGEMENT

(1.) This is an appeal by the defendants third party, who have purchased the equity of redemption from the mortgagors after the mortgage bond in suit, against the decision of the learned subordinate Judge of Arrah by which he decreed the suit instituted by the respondents to enforce their dues on the mortgage bond executed on 27 May 1923.

(2.) The sole question for determination in this appeal is the extent to which the appellants can obtain relief under the Bihar Money-lenders (Regulation of Transactions) Act, 1939. It is sufficient to state that the mortgage bond in suit was executed on 27 May 1923 to secure a sum of Rs. 3000 which carried interest at 12 per cent, per annum to be compounded annually. On 21 June 1930 the appellants obtained a transfer of the equity of redemption from the mortgagors for a sum of Rs. 13,000. Out of the consideration a sum of Rs. 6685 was left with the appellants to pay off the amount of principal and interest which then fell due on the mortgage calculated at the bond rate. The appellants paid a sum of Rs. 1261- 10-0 in August 1931 and a further sum of Rs. 1350 in June 1938 to the mortgagee, that is to say, a total of Rupees 2611-10-0. The present suit was filed on 30 April 1937.

(3.) The learned subordinate Judge has decreed the suit for a sum of Rs. 11,748- 9-0 with interest pendente lite up to the expiry of the period of grace at 12 per cent, simple per annum besides costs. It is not denied by the respondents and indeed it is obvious that the provisions of Section 7, Bihar Moneylenders (Regulation of Transactions) Act, forbid the Court from passing a decree for an amount of interest for the period preceding the institution of the suit which together with any amount already realised as interest through the Court or otherwise, is greater than the amount of loan advanced upon the mortgage bond in suit. Applying the rule laid down by this section, the plaintiffs would be entitled to a decree for a sum of Rs. 3000 being the principal together with a sum of Rs. 388-6-0 on account of interest, they having already realized Rs. 2611-10-0 from the hands of the appellants.