IBNEY HASAN Vs. GULKANDI LAL

JUDGEMENT

(1.) This is a defendant's appeal against a decree of the learned Subordinate Judge of Budaun decreeing the plaintiff's claim. It appears that since the case was decided in the Court below both the plaintiff and defendant have died and they are now represented by their heirs. The plaintiff's claim was upon two mortgages, dated 3 February 1919 and 23 July 1924 respectively. The claim was originally against three defendants, namely the executant Maulvi Abul Hasnain, Mohammad Baza defendant 1, his wife Mt. Khurshed Jahan Begam defendant 3 and the present appellant Maulvi Ibne Hasan who was impleaded as a subsequent transferee of a part of the property mortgaged. The suit was originally decreed against all three defendants, but this decree, in so far as it concerned the present appellant, was ex parte. Later the present appellant applied to have the decree, in so far as it affected him, set aside and this was ordered. Upon the matter coming up for hearing a decree was eventually passed against him in the same terms as the decree passed against defendants 1 and 3, that is, the actual executant of the mortgages and his wife. The decree was for the principal sums due together with arrears of interest calculated at the contractual rates.

(2.) A number of defences was taken by the present appellant before the learned Subordinate Judge, but it is only necessary to consider one of the defences in this judgment, because that is the only matter which is now urged before us. It was contended in the lower Court and it has been strenuously contended before us that the rates of interest agreed to, viz., 15 annas per cent. per mensem and Re. 1 per cent. per mensem compoundable annually, were excessive and that the lower Court should have made a substantial reduction in such rates of interest when passing a decree. It is to be observed that the appellant does not contend that no decree should have been passed against him, and all that he urges now is that the rates of interest should be reduced and that the decree should be for a considerably lesser sum. It has been contended on behalf of the appellant that this Court has power to reduce the contractual rates of interest, because this case falls within the provisions of Section 3, Usurious Loans Act, 1918. That section does allow the Courts to interfere in a number of cases where the interest claimed is excessive, but in our view the appellant cannot claim the advantage of that section in this present appeal. Proviso 2 to Section 3 reads as follows: Provided that in the exercise of these powers the Court shall not do anything which affects any decree of a Court.

(3.) In short the Court has no power whatsoever to reduce interest or to re-open hard and harsh bargains if the effect is going to be that another decree of a Court is affected. It is to be observed that this proviso prohibits the Court from exercising its powers under Section 3 in all cases where any decree of a Court is affected. It has been urged that this proviso must has no power to interfere only in cases where a decree of a Court inter partes is affected, but the words of the proviso are very much wider than that. The Court in the exercise of its powers under Section 3 must not do anything which affects any decree whether such decree be inter partes or not. In our view if we accede to the appellant's contention in this case and reduce the rates of interest we would inevitably affect a decree of a Court passed upon these very mortgages. As we have pointed out previously, the original decree passed in this suit was only set aside in so far as it affected the present appellant. That decree, in so far as it affected defendants 1 and 3, remained and still remains effective. The time within which defendants 1 and 3 could appeal against that decree has long since passed and that decree cannot now be varied by them. In that decree the rates of interest given were the contractual rates, namely the rates of interest stated in the two mortgages. If we, in this appeal, reduce the rates of interest at the request of the appellant, there would be two decrees passed upon the same mortgages in which the interest had been calculated at different rates. The decree against defendants 1 and 3 would be for a very much larger amount than the decree against the present appellant if we materially reduced the rates of interest in his case.