SHARFUDDIN Vs. ABDUL KARIM

JUDGEMENT

(1.) 1. The only point to be decided in this appeal is whether the view taken by the Additional District Judge with regard to damdupat is correct or not The following facts are established: One Jairam sold the prospective cotton crop of his field on 22nd August 1921, the produce being estimated at 16 maunds, to the respondent Abdul Karim. He agreed to deliver the whole crop on 29th January 1922 and further agreed that, if he failed to deliver the crop at the stipulated time, he would pay the price at the prevailing rate on that date with interest. As a security for payment Jairam mortgaged a house in Wun, and apparently the respondent obtained possession of that house. The plaintiff-appellant, who is a transferee from Jairam, brought a suit for redemption, claiming that he was entitled to redeem on payment of Rs. 97 only. The suit was decreed in his favour by the trial Court, but on appeal the Additional District Judge held that, although the rule of damdupat applied, the principal was Rs. 130, viz., the price of the cotton on 22nd January 1922, the date fixed for delivery, and not the amount of Rs. 48, which was the sum paid by Abdul Karim.

(2.) THE lower appellate Court has relied on Ramchand Sur v. Iswar Chandra Giri AIR 1921 Cal. 172, which is a case of a loan of paddy, the amount being charged upon immovable property. I do not however think that that case is quite analogous and, at any rate, the question at issue there was not the rule of damdupat, but one of limitation. The rule of damdupat is an equitable rule in favour of the debtor and should, 1 think, be strictly applied. The gist of the rule is that the amount to be recovered from the debtor at any time can never exceed twice the principal, i. e., the amount advanced to him. Now, by "principal" must, I think, be meant "the amount actually advanced" and not a pecuniary liability which may arise in the future, for which a mortgage security is taken. It is true no doubt that a mortgage of property can be taken for a pecuniary liability which may arise in the future, but such a liability would still be subject to the rule of damdupat. The present case is rather an unusual one, because of the sharp rise in the price of cotton, viz., from Rs. 60 to over Rs. 160 a khandi, between the date of the deed (Ex. P-1) and the time fixed for payment. The respondent-creditor is trying to take advantage of this rise and thereby to evade the application of the rule of damdupat. Such a rise of price however cannot by any analogy be held to be a capitalization of interest and the enhanced price cannot, in my opinion, be considered to be the principal. It has been held in Sadasheorao v. Kalusingh AIR 1925 Nag 272 that sawai, or prospective interest, cannot be considered to be part of the principal for the purposes of the rule of damdupat, and on the same analogy, I hold that an enhanced price or value in a contract of this description, where future crops are sold, cannot form the principal, but that for the purposes of the rule of damdupat the principal must be the amount actually paid.

(3.) I am of opinion then that the view taken by the trial Court is correct and that that taken by the lower appellate Court is wrong. I accordingly hold that the principal of the bond (Ex. P-1) was only Rs. 48 and that the amount for redemption is Rs. 97, as held by the trial Court. I therefore set aside the decree of the lower appellate Court and restore the decree of the trial Court for redemption. As the date for redemption baa now expired I extend the time and grant the plaintiff-appellant a further period of four months, i. e., until 29th June 1932, to redeem : on failure to redeem on that date the right of redemption will he barred. Costs of the appeal in both Courts will be borne by the defendant-respondent. Costs of the suit will be borne as ordered by the trial Court.