MUTHUKUMARASAMIAH PILLAI Vs. SUBRAMANIAN CHETTIAR

JUDGEMENT

(1.) This second appeal arises out of a suit filed on the basis of a hypothecation bond executed by defendants 1 and 2 who were the subscribers to a chit fund as security for the payment of future instalments of the chit, they having drawn a prize in connexion with a half share they were holding. Defendant 4 who is the appellant before me is the purchaser of their properties subject to the hypothecation bond.

(2.) Only two points have been argued before me; (1) that the 3rd, 4 and 5 instalments have been paid by defendants 1 and 2. In support of this an account book Ex. 5 of defendants 1 and 2 has been filed. The District Munsif relying on Ex. 5 finds the point in favour of the defendants. He thinks that the entries in Ex. 5 exactly correspond both in respect of the dates and the amounts to the instalments which were due. The Subordinate Judge points out that this was incorrect and no argument has been adduced before me to show that the Sub- ordinate Judge's view is erroneous and that the District Munsif's view is correct. The Subordinate Judge finds that all the other accounts of defendants 1 and 2 are not genuine. He finds no reason to discredit the evidence of defendant 3 who was the original stake-holder and who was the obligee of the bond Ex. A, and who assigned it to the plaintiffs. He finds the point in favour of the plaintiffs. I must accept the finding of the Subordinate Judge and can see no reason to reopen it (2). The second point argued is that the conditions of the bond are penal. Under this point he raises two questions, first that the rate of interest payable in default is penal and secondly the stipulation relating to a payment of all the future instalments on two defaults is also penal.

(3.) Mr. Patanjali Sastri appearing for the respondents argues that the second point was really not raised either in the written statement or in the issues. It was raised very vaguely in the written statement. It is true it is not raised in the issues. Defendant 4's conduct in depositing the amount of the instalments 6 to 21 with interest at 12 per cent. from the date of the 6th call up to 17 August 1920, namely Rs. 1,746, seems to suggest that he intended to raise no question about the advancing for the payment of instalments 6 to 21. The suit was filed on the 8 September 1920. By that date, instalments 6 to 13 had fallen overdue and 14 to 21 have not. Even assuming that the stipulation about the payment of all the instalments on the defaults is penal, there is nothing to prevent defendants from paying and the plaintiff from accepting the amount of instalments 14 to 21, before their time. The only question is whether the amount of interest which he has paid for these instalments, namely, Rs. 546, was too much if it be regarded as the amount of interest only on instalments 6 to 13. One thing is clear that he was quite content to get rid of the obligation to pay instalments 6 to 21 by paying an interest of Rs. 546, for them whichever way the figure may be arrived at. That sum represents nearly an interest of 45 per cent. if interest is calculated on instalments 6 to 13 from the respective dates they fall due. If interest is calculated at the rate of 30 per cent. (the rate finally adopted by the Subordinate Judge) from the respective dates, it represents an excess of about Rs. 179-8-0. It is unnecessary for me to consider whether any relief in respect of instalments 6 to 21 so as to reduce the amount payable from Rs. 1,746, should be given, as the amount has been unwillingly paid. The only question I have got to consider in respect of instalments 6 to 21 is whether the plaintiffs are entitled to any larger amount than Rs. 1,746, the sum deposited.