GIRDHARI LAL Vs. JANG SINGH

JUDGEMENT

(1.) This is a revision application arising out of proceedings under the Encumbered Estates Act. Girdhari Lal and other applicants made an application under Section 4, Encumbered Estates Act, which was sent to the Special Judge under the provisions of Section 6. The opposite party, Jang Singh and others, had a claim against the landlord debtors and they preferred their claim which was based on foot of a mortgage decree, dated 6 December 1929, in the Court of the Special Judge. It may be noted here that the application under the Encumbered Estates Act had been made on 11 April 1936. The main question for consideration in the present appeal is whether the lower Appellate Court was right in allowing interest to the creditors in defiance of the provisions of Section 14, Encumbered Estates Act. Both parties are agreed that the principal amount due from the landlord debtors to the creditors was a sum of Rs. 3240. Section 14, Encumbered Estates Act, among other things ordains as follows: ...In examining each claim the Special Judge shall have and exercise all the powers of the Court in which a suit for the recovery of the money due would lie and shall decide the questions in issue on the same principles as those on which such Court would decide them, subject to the following provisions, namely- (a) The amount of interest held to be due on the date of the application shall not exceed that portion of the principal which may still be found to be due on the date of the application.

(2.) Section 15, Encumbered Estates Act, enjoins as follows: In determining the amount due on the basis of a loan which has been the subject of a decree the Special Judge shall accept the findings of the Court which passed the decree except in so far as they are inconsistent with the provisions of Section 14....

(3.) If we read the provisions of these two sections carefully, it becomes at once apparent that in the matter of granting interest the powers of the Court are curtailed to a considerable extent. To me it is clear that under the provisions of Section 14 the Court can grant a decree for the principal sum due which in the present case was Rs. 3240 plus interest which shall not exceed the principal amount which was due on the date of the application. In view of these provisions, it is no longer open to the Court to award interest on some other consideration. The fact that a decree has been obtained on the basis of a loan does not make the slightest difference because Section 15 makes it clear that the powers of the Court in determining the amount are subject to the provisions of Section 14 and according to that Section interest cannot possibly exceed the principal amount which was due on the date of the application.