AJODHYA PRASAD BHAGAT Vs. GOBIND MISSIR

JUDGEMENT

(1.) This is an appeal by the plaintiff whose suit for recovery of a sum due on the basis of an instalment mortgage bond has been dismissed by the appellate Court on the ground of limitation. The facts are no longer in controversy and must be stated in order to appreciate the strenuous contention raised by Mr. Misra on behalf of the appellant. On 4 June 1924, the defendant executed a Kstbandi mortgage bond for Rs. 408-4-0 in lieu of a previous debt in plaintiff's favour. The bond provided that Should there be default in payment of any instalment, the said creditors shall have the right to realise the expired and unexpired instalment at a time by instituting suit in Court.... In case of default of interest the said creditors shall have the right to realise the money of all the instalments with interest from the date of this bond till realisation at the rate of one percent, per mensem.

(2.) The defendants paid Rs. 286-8-0 towards principal and interest in four instalments during 1925 to 1927. On 23 June 1930 a sum of Rs. 11 was paid. The endorsement on the back of the bond regarding this item is "egareh rupeya adai kia," that is to say, Rs. 11 has been paid. The plaintiff's case was that this amount of Rs. 11 was paid towards interest, but the defendants case was that they never made any payment of Rs. 11 as alleged by the plaintiff but that they made a payment of Rs. 125, and that the writing of that payment has been removed by the plaintiff and in lieu thereof he has forged the entry of payment of Rs. 11. The Courts below have concurrently found that the defendant's case is false, and that on the evidence it must be held that the sum of Rs. 11 was paid in the nature of a general payment by the defendants and that the factum of that payment appears in the handwriting of the defendant. The trial Court erroneously thought that the plaintiff had stated in the plaint that the payment of Rs. 11 had been made towards principal and interest. The plaint has been read out to us, and we are satisfied that the learned Subordinate Judge is right when he stated in appeal that the plaintiff's case was that Rs. 11 has been paid towards interest. It may be that the learned Munsif fell into the error because be was thinking of the other payments which were made towards interest and principal. It is true that the plaintiff did not state in his evidence that Rs. 11 was paid towards interest, but after the close of the evidence of P.W. 2 he was recalled and made to say that the payment of Rs. 11 was made towards interest. But the learned Subordinate Judge has disbelieved this evidence of the witness and having disbelieved him he comes to the conclusion that there was nothing in the record to show that the intention of defendant 1 was that the payment of Rs. 11 should go towards interest. It must, therefore, be held that the payment of Rs. 11 was not made towards interest as such . The situation is thus covered by the Full Bench decision of the Allahabad High Court in Udeypal Singh V/s. Lakshmi Chand and the majority view was accepted as correct by their Lordships of the Judicial Committee in Ram Shah v. Lalchand . The suit of the plaintiff, therefore, which was instituted on 10 June 1942, was barred by limitation.

(3.) The learned advocate for the appellant, however, seeks to escape from the difficulty by arguing in the first place that the debt in the present case was not an interest bearing debt. He has referred elaborately to the commentary by Pollock and Mulla under Section 74, Contract Act, where it is stated that where interest is payable as default it is really damages by way of interest. Having perused the Kistbandi bond, which we got translated by the office, I am satisfied that in the present case the debt is an interest bearing debt. It is true that no interest was payable if all the instalments were paid within time, but the parties contracted that if the instalments were in arrears, the creditor would have the right to realise interest at a stipulated rate, It may be that in a proper case, the Court may come to the conclusion that the stipulation to pay this rate of interest was by way of penalty, but that would only affect the question as to the rate upon which interest would be payable by the debtors. It would not mean that the debt was not an interest bearing debt.