MISRI LAL Vs. ALEXANDER GARDNER

JUDGEMENT

(1.) These appeals arise out of a suit brought by the plaintiff Lala Misri Lal on foot of two mortgage deeds, one dated 14 January 1920 for Rs. 1,000 carrying interest at the rate of 2 per cent per mensem compoundable every six. months, and the other dated 5 July 1921 for Rs. 1,800 carrying interest at the same rate. The sum due under the first mortgage on the date of the suit (14 January 1932) was Rs. 11,550 and that due under the second deed on the aforesaid date was Rs. 19,500. Both deeds were executed by one Mr. Alexander Gardner, who appears to have owned considerable zamindari property in the district of Etah, in favour of the plaintiff Misri Lal and his brother Ulfat Rai since deceased. Shares in no less than 10 villages were hypothecated under the aforesaid mortgage deeds. The mortgaged property has since passed to subsequent transferees by private alienations or in execution of decrees against the original mortgagor. About 30 defendants were impleaded, some of whom contested the plaintiff's claim. The only defences which it is necessary to take notice of for the purposes of this appeal are two: (1) that the mortgage money due under the deeds in suit was satisfied by two subsequent deeds dated 17 August 1922, details of which will be presently given; and (2) that the interest stipulated in the deeds in suit was excessive and unfair in the circumstances of the case. Among other defendants, defendant 4, Mathura Prasad, the appellant in First Appeal No. 343 of 1933, raised the two pleas noted above.

(2.) The learned Subordinate Judge, Etah,. in whose Court the suit had been instituted, found that the sums due under the deeds in suit were not paid or otherwise satisfied by the execution of the mortgage deeds dated 17 August 1922 as alleged by some of the defendants. On the question of interest the learned Judge held that the rate stipulated in the deeds in suit was excessive and unfair in the circumstances of the case. Accordingly it was reduced to 18 per cent per annum simple. Two appeals have been filed from the decree of the lower Court. First Appeal No. 228 of 1933 is the plaintiff's appeal in which the sole question raised is whether the lower Court was right in applying the Usurious Loans Act and in reducing the rate of interest. First Appeal No 343 of 1933 is by defendant 4 who challenged the decree of the lower Court in so far as it allowed 18 per cent per annum simple interest which, according to him, is too high a rate. It is contended that no more than 6 per cent per annum should have been allowed. Another question raised by this defendant is whether the lower Court was right in holding that the mortgages in suit were not satisfied by the execution of two subsequent deeds dated 17 August 1922 as alleged on behalf of the defendants. We proceed to deal with First Appeal No. 313 of 1933 first.

(3.) It is not disputed that Alexander Gardner executed on 17 August 1922 two deeds of simple mortgage, one in favour of Doongar Mal for Rs. 12,000 and the other in favour of Gopal Das for Rs. 13,000. The consideration of these mortgages included sums payable by the mortgagor to Misri Lal and Ulfat Rai and to a number of other creditors. Doongar Mal and Gopal Das were directed in their respective deeds to pay off what was then due under the deeds in suit. It was alleged by the defendants that the real mortgagee under the deeds of 17 August 1922 was the plaintiff, Lala Misri Lal and that Doongar Mal and Gopal Das were only benamidars for him. Evidence was led on behalf of the defendants to establish the benami character of the mortgage deeds of 17 August 1922. It may be mentioned at this stage that Doongar Mal is the wife's brother of the plaintiff Misri Lal while Gopal Das is the wife's brother of Ulfat Rai, the deceased brother of the plaintiff, Misri Lal. Ulfat Rai's sons are some of the defendants. The deeds in suit were executed in favour of Misri Lal and Ulfat Rai, but under a family partition they were allotted to the share of Misri Lal alone. Hence he and his sons are the plaintiffs in the present case. The defendants case is that Misri Lal agreed to advance Rs. 12,000 under one deed ostensibly in the name of Doongar Mal and Rs. 13,000 under the other deed ostensibly in favour of Gopal Das and that Misri Lal, the real mortgagee should be considered to have paid himself the entire amount due under the deeds in suit immediately on the execution of the mortgage deeds of 17 August 1922. It will be seen that the defendants plea implies two propositions, one of fact and the other of law.