GULAB CHAND PRASAD Vs. RAM KUMAR

JUDGEMENT

(1.) This is an appeal from a decision of the learned subordinate Judge of Gaya, dated 8 July 1938, decreeing a suit to enforce three simple mortgage bonds.

(2.) The appeal is by defendant 10 alone, who is a subsequent purchaser of one item of the mortgaged property. The first of the bonds in suit was executed on 13 May 1925, for a sum of Rs. 6000 bearing interest at 14 annas per cent, per mensem compoundable with annual rests. The property mortgaged was a house (holding Ho. 27) in the town of Gaya. This bond is Ex. 1. The amount said to be due at the time of the suit was Rs. 20,619-5-6. Only a sum of Rs. 15,500 was claimed, and the balance was given up. The second bond (Ex. 7) was executed on 2 February, 1929, for a sum of Rs. 3200. The property mortgaged was the same and there were the same provisions with regard to interest. The claim in this case was for Rs. 7593-2-3. The third bond (Ex. 66) was executed on 2l August, 1929, for a sum of Rs. 5000. It contained similar provisions with regard to interest, and the same property was mortgaged together with another house (holding No. 66). The claim in this case amounted to rupees 12,076-12-0. These sums claimed ware decreed in full. As however the interest allowed was compound interest, the learned subordinate Judge allowed no interest pendente lite, or for the period of grace. He ordered that after expiry of the date fixed for redemption interest should run at 6 per cent per annum.

(3.) The first point taken in the appeal is that the rule of damdupat as contained in Section 7, Bihar Money-lenders Act, must be applied. Section 7 of this Act provides that no Court shall, in any suit brought by a money-lender before or after the commencement of the Act in respect of a loan advanced before or after the commencement of the Act or in any appeal or proceedings in revision arising out of such suit, pass 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, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by such document. It would follow from this that the amount decreed by way of interest for the period from the date of bond to the institution of the suit cannot be, in the case of the first bond, more than Rs. 6000, in the case of the second bond more than Rs. 3200 and of the third bond Rs. 5000.