RAM SARUP SAH Vs. MUKHI SINGH

JUDGEMENT

(1.) This is an appeal by the plaintiffs from a decision of the Subordinate Judge of Chapra modifying a decision of the Munsif. The facts were as follows : Defendants first party executed a mortgage in favour of the plaintiffs on 21 July 1923, to secure redemption of a loan of Rs. 500. The rate of interest prescribed by the bond was 2 per cent, per mensem with six-monthly rests. At the date of. the institution of the suit, on 20 January 1936, the amount outstanding for principal and interest was Rs. 8492-2-6. The plaintiff abandoned his claim as to Rs. 4992-2- 6 and sued for a recovery of the remaining Rs. 3500. Defendants 4 to 29 were subsequent transferees or mortgagees of the hypothecated property Defendants 8, 9 and 15 claimed priority over the plaintiff's mortgage. In 1917, there had been a zarpeshgi bond to defendants 8 and 9 for Rs. 175 and in 1922 another zarpeshgi in favour of the same defendants for Rs. 200. On 7 April 1924, defendants 8 and 9 advanced Rs. 768 to redeem a previous-mortgage in favour of one Rambharosa and Ramkalar, the brothers of the present plaintiff.

(2.) On 27 May 1925, there was a mort-gage to defendants 8 and 9 for Rs. 1200 to pay off all these previous encumbrances. The claim of defendant 15 was that on 4 July 1925, he had advanced Rs. 800 on a mortgage to pay off a previous mortgage of 7 April 1923. The first Court disallowed the claim of defendant 15 to priority and as to the claim of defendants 8 and & allowed it only to the extent of Rs, 375, that is to say, in respect of the previous-zarpeshgis of 1917 and 1922. Against the decision of the first Court an appeal was preferred by defendants 8, 9 and 15, defendants 8 and 9 challenging the decision of the trial Court with respect to the sum of Rs. 768 and defendant 15 with respect to Rs. 800.

(3.) The appeal was dismissed so. far as the claims of defendants 8, 9 and 15 to priority were concerned, but the Appellate Court gave effect to Section 11, Money- lenders Act, 1938, which prohibits a Court, in a suit brought by a money-lender, in respect of a loan, to pass a decree for the amount of interest for the period preceding the institution of the suit which, together with any; amount already realized as interest through" the Court or, otherwise, is greater than the amount of the loan advanced, that is to say, the plaintiff's claim was reduced to Rs. 500 principal and Rs. 500 interest. The Appellate Court in its judgment made no provision for interest after the date of the institution of the suit up to the date of grace nor for interest subsequent to the date of grace, although the trial Court had-awarded interest at the bond rate up to the date of grace and interest at 6 per cent, per annum for the later period.