SUKHRAJ RAI Vs. RATINATH PANJIRA

JUDGEMENT

(1.) This is an appeal by the plaintiffs in a mortgage suit. The mortgage was executed on 2 July, 1912, by the then kartas of the defendants joint family in favour of one Parbodh Chandra Banerji for an advance of Rs. 7000 carrying compound interest at 10 per cent, per annum with yearly rests. The plaintiffs have acquired by purchase the interest of the mortgagee Parbodh Chandra Banerji. The mortgage is sought to be enforced against the joint family of the defendants on the allegation that the loan was contracted for legal necessity. After giving credit for payment of RS. 11,859-11-4 towards interest and Rs. 500,towards principal, the claim was laid at Rs. 16,151-7-0. The last of these payments was made on 15 Jeth 1388 (17 May 1931), and the suit was instituted on 1 May 1937. Though the suit was brought much more than 12 years after the mortgage money became payable, limitation was sought to be saved by the different payments made. One of the defences raised in the suit was that the rate of interest was high and excessive.

(2.) The learned Subordinate Judge who tried the suit did not come to any definite finding as to whether the stipulated rate of interest was high and excessive. He, however, applied the provisions of Section 11, Bihar Money-lenders Act, 1938, which has since been replaced by Section 7 of Act 7 of 1939. Under that section the interest recoverable up to the date of the suit cannot exceed the amount of the principal mentioned in the bond in suit. As the payments made towards interest were much in excess of Rs. 7000 the amount of loan mentioned in the mortgage bond in suit the learned Subordinate Judge did not allow any interest. There being a payment of Rs. 500 towards principal, he passed a decree for Rs. 6500 only without any further interest. He overruled the other defences raised in the suit and passed a mortgage decree for Rs. 6500 only. He, however, granted instalments according to the provisions of Section 13, Bihar Money-lenders Act, 1938, now replaced by Section 10 of Act 7 of 1939, the instalments being of Rs. 500 each payable on 15 February of each year from 1939 to 1951. The plaintiffs being dissatisfied with this decree, have preferred this appeal.

(3.) The first point raised by Mr. S.C. Mazumdar for the appellants is that the learned Subordinate Judge had no power to refuse pendente lite interest. So far as the interest payable up to the date of the suit is concerned, he concedes that under the provisions of Section 7, Bihar Money-lenders Act (Act 7 of 1939) the decree is perfectly correct. As regards the pendente lite interest the learned Subordinate Judge does not give any reason at all for refusing it. He refers to Section 11 of the Act of 1938, which however expressly limited the interest payable up to the date of the suit to the amount of the loan advanced. That section (the new Section 7 of Act 7 of 1939) does not deal with the interest payable after the date of the suit. The learned Subordinate Judge, therefore, if he really dieted upon Section 11, Bihar Money-lenders Act, was entirely wrong in refusing pendente lite interest. Pendente lite interest is governed by the provisions of Order 84, Rule 4, Civil P.C. Under that rule read with Order 34, Rule 2, the Court shall pass a preliminary decree. (a) ordering that an account be taken of what was due to the plaintiff at the date of such decree for. (i) principal and interest on the mortgage.