RAM BUJHAWAN PROSAD SINGH Vs. NATHU RAM

JUDGEMENT

(1.) This is an appeal from a decree of the High Court of Judicature at Patna which varied a decree of the Judge of the Subordinate Court. Hari Charan Mahto, the father of the first of the defendants (appellants), was head, and Karta, of a Hindu joint family, governed by Mitakshara law. He borrowed a sum of Rs. 1,000, secured with interest at thirty-six per cent, per annum with quarterly rests, by hypothecation, of certain immoveable properties of the joint family, and executed a deed of mortgage on July 16, 1903, the rights in which are now vested in the plaintiffs (respondents). Hari Charan Matho died on January 18, 1911, without redeeming the deed of mortgage. At the time of the institution of the present suit to enforce the mortgage bond, it was claimed that there was a sum due on the mortgage for principal and interest of more than Rs. 50,000, after making an allowance for payments which had been made during the lifetime of the mortgagor. The actual claim in the suit was for Rs. 32,000, the plaintiff stating that they had reduced the amount of their claim on the ground that the mortgaged property was not worth the whole sum due for principal and interest.

(2.) In their plaint the plaintiffs (respondents) pleaded that Hari Charan Matho had borrowed the sum of Rs. 1,000, at the above rate of interest, in order to defray some necessary household expenses of the joint family, and that as security for the bond money, principal, with interest and compound interest, he had mortgaged, hypothecated and made liable his milkiat right in certain scheduled properties, which it is not necessary especially to designate. In answer to this claim the first of the defendants (appellants) pleaded, among other things: That the necessities mentioned in the bond in suit are wrong and baseless. This defendant's father never took a shell from the plaintiffs for the requirements and the benefit of the family, nor was there any necessity for the same. That the mortgaged property is the ancestral property of the joint family, and is not at all liable for the payment of the amount claimed. Nor can the property be Bold for the payment of the same. That the rate of interest and compound interest and the period for payment of compound interest are altogether invalid and are by way of penalty. Such an invalid contract and such severe terms, which are by way of unconscionable bargain, cannot be given effect to or put into operation. The account of compound interest and the m inner it has been calculated are also wrong. The plaintiffs are not, in any case, entitled to compound interest on the interest.

(3.) It has been necessary to sat out these pleas at length, since the judgment of the High Court his largely turned on a point 1 of pleading. In the written statements, filed on behalf of the other defendants (appellants) the same defences are raised, and in the issues filed before trial in accordance with Indian practice, 3 and 5 are relevant to the questions argued on the appeal before their Lordships. The third issue raises the question whether the defendants (appellants) are bound to pay the debt. Were they benefited by the loan? Can the defendant raise his objection? The fifth issue raises the question whether the stipulation in the bond for payment of compound interest is penal and unconscionable.