K SUBRAMANIA CHETTIAR Vs. VISALAKSHI AMMAL

JUDGEMENT

(1.) The appellant before Court is the defendant. The appeal arises out of a suit for redemption. The properties in dispute were mortgaged on 1 May 1930 by one Srikanta Ayyar in favour of the appellant for Rs. 800. Under the terms of the document the property was to be enjoyed by the mortgagee in lieu of interest. The mortgage amount was payable in three years and in default of payment at the end of three years interest at 12 per cent, per annum was payable in addition. The property was leased subsequent to the mortgage by the mortgagee to the mortgagor and another. That was in 1930 itself. The rent was in arrears and a suit had to be filed in 1936 and decree obtained on 25 March 1937. In the meanwhile on 30 May 1935 the mortgagor Srikanta Ayyar sold the property to one Subramania Ayyar for Rs. 1000 and directed him to redeem the mortgage by payment of Rs. 800. Two years later subsequent to the passing of the decree for rent on 1 April 1937, Subramania Ayyar sold the property to the present plaintiff for the same amount, namely, Rs. 1000 directing her to redeem the mortgage by paying Rs. 800. She deposited Rs. 800 into Court under Section 83, T.P. Act. The appellant contended that the amount tendered was not sufficient as the amount due under the decree for rent as also interest at 12 per cent, per annum from the expiry of three years should also be paid. Hence the suit for redemption.

(2.) The first Court found that the claim for rent was only a personal one which could not be claimed in a suit for redemption of the mortgage. But it found that interest was payable under the mortgage and the same should be paid before redemption; but reduced the rate of interest to 6 per cent, and directed the redemption on payment of the principal amount and interest at 6 per cent, from the date of default. The learned District Judge on appeal held that the liability to pay interest was only a personal one and consequently no amount can be claimed in a suit for redemption in respect of that amount. He further held that the penal clause was not enforceable and found that the tender was valid and directed redemption on payment of Rs. 800. Hence the appeal.

(3.) The only point for consideration in the appeal is whether the defendant can claim payment of any and what amount as interest payable under the terms of the usufructuary mortgage deed before the property is redeemed. With regard to the finding of the learned District Judge that the covenant for payment of interest was only a personal one it has to be pointed out that in Gangaram V/s. Nathasing ( 24) 11 A.I.R. 1924 P.C. 183 it was held by the Privy Council that in the absence of a contract to the contrary there is a charge for interest the payment of which is provided in the mortgage deed. There is absolutely nothing in the terms of the document that there is a contract to the contrary. It is specifically stated that from the expiry of three years fixed for payment of principal, interest at 12 per cent, was payable and that the mortgagee was to enjoy the property in addition to the right to recover interest. I am not able to find any re-cital in the document to indicate that it was the intention of the parties that there was to be no charge for interest. The case reported in Bysani Madhava Chettiar Charity Fund V/s. Krishnaswami Chetty ( 23) 10 A.I.R. 1923 Mad. 71 has no application to the facts of this case. There, there was a specific recital in the document that redemption was to be effected on payment of the principal amount. The use of the expression ?principal amount" in the clause dealing with the amount payable for redemption took the case out of the principle enunciated in Gangaram V/s. Nathasing ( 24) 11 A.I.R. 1924 P.C. 183. The ruling in Pawankumar Chand V/s. Dulari Kuar ( 20) 7 A.I.R. 1920 Pat. 170 was relied on for the respondent. But it was prior to the decision of the Privy Council in Gangaram V/s. Nathasing ( 24) 11 A.I.R. 1924 P.C. 183. The learned District Judge was therefore wrong in finding that the security cannot be enforced in respect of the interest provided in the document.