GOVIND DANI Vs. PURUSOTTAM MAHAPATRA

JUDGEMENT

(1.) This appeal is by defendant 15 and arises out of a suit on a mortgage, The mortgage was executed by defendant 6, for self and as guardian of his minor son, defendant 7 on 7 March 1910, to secure a loan of Rs. 400. The stipulated rate of interest was Rs. 25 per cent, simple. The object of the loan was to secure money for the purpose of reconstructing or reconditioning the residential house of the mortgagor's family which was staled to be in a dilapidated condition. In the year 1923, one Abdul Karim purchased the mortgaged property in execution of a money decree obtained against the mortgagor, defendant 6. His heirs, defendants 1 to 5, sold the property to the appellant. It has been contended on behalf of the appellant that the mortgage is not binding on the property, not being for legal necessity. The evidence in the case and the findings of the Court below show that out of Rs. 400 Rs. 150 was spent in the construction of a pucca privy and Rs. 175 in repairs effected to the residential house. With regard to Rs. 150 spent on the privy it has been contended that there was no necessity to build a pucca privy as a kutcha privy would have sufficed for the needs of the family. I am not prepared to take this view of the matters. A pucca privy cannot be regarded in the light of a mere luxury. It is essential for sanitary purposes that a privy should be constructed as well as it can be. With regard to the sum of Rs. 175 spent on repairs, this was challenged on the ground that the object of the loan stated in the bond was reconstruction of the residential house and not its repairs. Nor am I prepared to accept the contention that this amount was not for legal necessity.

(2.) The evidence shows that the house was in a very dilapidated condition at the time of the loan and the term construction used in the bond covered repairs on such a scale as might be regarded as practically reconstruction of the house. Then it was contended that in any case Rs. 175 has not been shown to have been required or spent on the house, With regard to that the evidence discloses that the mortgagee was satisfied that the house was in a dilapidated condition and that repairs were urgently needed. In these circumstances it was not necessary for him to see that every rupee of the money advanced was spent for the purpose for which it was apparently required.

(3.) The last contention with regard to the point of legal necessity was that the rate of interest was excessive, and we have been re-ferred to two decisions of the Privy Council, in Nazi Begum V/s. Roa Raghunath Singh A.I.R. 1919 P.C. 12 and Mannulal V/s. Karu Singh A.I.R. 1919 P.C. 108, in which it was held that it is obligatory on the mortgagee to show in a case where a high rate of interest has been charged that there was necessity not only for the loan but also for the rate of interest agreed upon. In the present case the Courts below were not satisfied that at the time when the loan was contracted and in the circumstances in which it was contracted, the amount of interest agreed was excessive. Finally, the appellant sought to take advantage of the provisions of Section 10, Money Lenders Act, which limits the amount of interest recoverable by a money lender in a suit on a loan. The material part of the Section provides as follows: No Court shall in any suit brought by a money lender in respect of a loan pass a decree or an amount of interest greater than the amount of loan originally advanced.