FIRM SAHI MAL MANOHAR DAS Vs. MTILTIFATUNNISA BEGAM

JUDGEMENT

(1.) This is an appeal by a creditor arising out of proceedings under the U. P. Encumbered Estates Act (25 of 1934). Iltifatunnisa Begum, who is the respondent in the present appeal, applied under Section i, Enoumbered Estates Act, and the case was, in due course, forwarded by the Collector to the civil Court under Section 6 of the Act. One of the creditors mentioned in the application was firm Sahi Mai Manohar Das which is represented by the appellants in the present appeal. Iltifatunnisa, the applicant, had borrowed a sum of Rs. 7500 from the said firm on the basis of a mortgage deed dated 21 May 1913. The interest stipulated in the deed was at the rate of 11 annas per cent, per mensem com poundable with yearly rests. The property mortgaged was zamindari property, the Government revenue of which was Rs. 1516 and it is admitted on all hands that the security was more than sufficient for the debt advanced.

(2.) The creditor put his mortgage into suit and the suit was decided on the basis of a compromise. The decree that was passed on the basis of the compromise is dated 2 December, 1919. The decree was, in all for a sum of Rs. 13,372-12-0 and by virtue of the compromise that was embodied in the decree, the decretal amount was payable by yearly instalments of Rs. 1200. The decretal amount was to carry interest at the rate of Rs. 8-4-0 per annum with yearly rests. Iltifatunnisa was always punctual in the pay. ment of the instalments provided for by the decree, and it is a matter of admission that by the year 1935 she had paid to the decree-holder a sum of Bs. 18,000. The decree-holder-appellant filed a claim before the Special Judge under S 9, Encumbered Estates Act, and claimed a sum of Rs. 17,467-4-0 as still due to him. The case put forward by him was that in the calculation of the amount due to him the interest should be calculated on the decretal amount at the rate of 8-| per cent, with yearly rests. This position was controverted by Iltifatunnisa, the applicant, ant she claimed the benefit of the provisions of the Usurious Loans Act (10 of 1918) as amended by the Usurious Loans (U. P. Amendment) Act 22 of 1934.

(3.) The learned Special Judge held that the interest provided for by the compromise decree was excessive and accordingly reduced the interest from 8& per cent, compoundable with yearly rests to 7 per cent, simple interest. The decretal amount with interest at the rate of 7 per cent, per annum came to Rs. 16,384-9-0 on the date of the application filed by Iltifatunnisa under Section 4, Encumbered Estates Act. As she had already paid a sum of Rs. 18,000 the learned Judge held that the appellants had received a surplus amount of Rs. 1615-7-0 and as such, were not entitled to a decree with respect to any amount. In view of these conclusions the learned Judge rejected the claim of the appellants. The reasons assigned by the learned Judge for granting relief to Iltifatunnisa in the matter of interest commend themselves to us. The security for the mortgage debt was, as already stated, more than sufficient and the appellants therefore ran no risk in advancing the loan. Iltifatunnisa abided by the terms of the compromise decree and punctually paid the instalments provided for by that decree. She had on the date of the application under Section 4 paid to the appellants a sum of Rs. 18,000 that was far in excess of double the amount originally advanced by the appellants. In this state of the facts it is impossible to hold that the learned Judge was not justified in extending to Ilfcifatunnisa the benefits of the provisions of the Usurious Loans Act as regards reduction in the rate of interest.