GURU CHARAN DAS Vs. SMSORI DEI

JUDGEMENT

(1.) THIS is an appeal by the defendant and arises out of a mortgage action. The only question for decision is what is the correct amount which is payable to the plaintiff-mortgagee by the application of the provisions of the Orissa Money- lenders Act. On 1 July 1927, the appellant executed a usufructuary mortgage bond for us. 40 in favour of the respondent. It was agreed between th7e parties that the mortgagee was to appropriate the usufruct of the lands of which he was given possession in lieu of interest on Rs. 20 only that is to say, on half the mortgage amount. The interest was calculated at 25 per cent, per annum. It was also stipulated that the remaining Rs. 20 will carry interest at 25 per cent, per annum. The mortgagee having been dispossessed on 9 January 1939, instituted a suit, giving rise to this appeal on 18 May 1939. He claimed to recover Rs. 85- 13-9. It is unnecessary to set out the defence which was the subject of a number of issues, because the only point pressed before me was the calculation of the true mortgage amount to be deduced by the application of the provisions, of the Orissa Money-lenders Act. The plaintiff claimed in-. terest at 18 1/4 per cent, per annum on Rs. 20 since the date of the bond and on the balance of Rs. 20 since the date of dispossession. The Courts below have concurrently found that the annual value of the usufruct which had been assessed at Rs. 5 in the mortgage bond was a figure given by estimate and that the actual yield of the mortgaged property could not be valued at more than Rs. 2 per annum, and, after deducting expenses for cultivation, only a net profit of Re. 1 per annum remains, so that the plaintiff realised interest on Rs. 20 a sum which did not exceed 5 per cent. Says the learned Munsif: But as a matter of fact the plaintiff has claimed nothing on account of interest over Rs. 20 for the period for which she and her father remained in possession of the mortgaged property.

(2.) CONSEQUENTLY, he did not allow the plaintiff any interest on Rs. 20 for that period. But after the date of dispossession he has been allowed interest at 9 per cent, only and not at 18 3/4 per cent, per annum on the entire Rs. 40, so that the plaintiff has been awarded Rs. 22-0-2 as interest. This decision was affirmed in appeal. Mr. Subba Rao who appears for the appellant argued that by the application of Section 10, Sub-clause (2), Orissa Moneylenders Act, the amount of interest which has been realised in excess of 9 per cent, per annum should be appropriated towards the satisfaction of the loan dues and the plaintiff is only entitled to a decree for the payment of the balance. Mr. K. Khan in reply accepts this contention in law but stresses the fact that as a matter of fact the only amount realised as interest is, as has been found by the Courts below, Re. 1 per annum, and therefore, the plaintiff has not realised any interest in excess of 9 per cent. In reply Mr. Subba Rao says that when the contract between the parties was that by being in possession of the land Rs. 5 per annum will be treated as having been realised towards interest, the Courts below were wrong in embarking into evidence to find out what was the actual usufruct which has been received by the plaintiff during the period of his possession. Having given the matter my full consideration I agree with the contention raised by Mr. Subba Rao. The parties have entered into a contract which is clear that during the period the mortgagee remains in possession he will be deemed to have appropriated the entire produce in lieu of interest on Rs. 20. The interest will be calculated at the rate given in the mortgage bond, that is to say at the rate of 25 per cent. The interest having been reduced by the Legislature to 9 per cent, the defendant is entitled to ask the Court to calculate the excess amount of interest which the plaintiff has thus realised. The office will, therefore, work out the exact amount of interest which the plaintiff has realised during the period of his possession by assuming that a sum of Rs. 5 has been realised towards interest every year that the plaintiff was in possession. The excess amount so realised over the amount which should have been received if the interest was calculated at 9 per cent, per annum will, under Section 10, sub-el. (2) be appropriated towards the satisfaction of the loan of Rs. 40. Let the office draw up a decree in this form. The result is that the decisions of the Courts below are altered. The office will prepare the usual mortgage decree in accordance with my directions above. The period of grace will be one month from today. In the circumstances the parties will bear their own costs both in this Court and in the Court of the District Judge.