(1.) THE facts of this case are sufficiently clear from the lower Court's judgment. The plaintiff Kisan has come up here on appeal with regard to the disallowance by the Subordinate Judge of compound interest. Very obviously, the Subordinate Judge erred in supposing that he was at liberty to apply the provisions of the Usurious Loans Act, 1918, to the facts of the present case. The mortgage-deed in suit was executed in 1908 and the present suit cannot be described as a "suit to which this Act applies" under Section 3 of the said Act.
(2.) THE only question which remains, therefore, is whether, in the circumstances of the present case, this Court is entitled to give relief to the respondent under Section 74, Indian Contract Act. Prima facie, as shown by the Subordinate Judge, there would be a strong case in equity for giving relief in view of the grossly swollen nature of the claim, in which the interest claimed amounts to some 11 times the original principal, and also in view of the fact that the plaintiff had delayed so long in bringing his suit. The actual provision as regards interest in the mortgage-deed in suit is that it was to run at the simple rate of Re. 1-8-0 per mensem and repayment of the amount due under the mortgage was to be made within five years. If the mortgagor failed to make such repayment, then compound interest was to be charged. In Janki Das v. Ahmad Husain Khan [1902] 25 All. 159 and in Prayag Kapri v. Shayam Lal [1901] 31 Cal. 138 the learned Judges respectively concerned took the view that such a stipulation as we are concerned with here is not in the nature of a penalty; and it is difficult to see how, in view of the terms of the explanation to Section 74, Con-tract Act, it could be possible to hold that a mere stipulation for compound instead of simple interest at the original rate can be described as increased interest. There has been no proof or, indeed, specific plea, that in the present case the creditor was in a position to dominate the will of the borrower or that the latter did not understand the perfectly simple terms included in the deed in suit as regards interest. With respect, therefore, in view of the exaggerated amount of interest which the plaintiff would appear to be entitled to claim in the present case, I am forced to the conclusion that it is not open to me to give relief to the respondent in this matter of interest and 1 hold that from 2nd September 1913 up to date of suit appellant is entitled to compound interest with yearly rests at the contract rate of Re. 1-8-0 per cent. per mensem. A decree will be drawn up accordingly in supersession of that passed by the lower Court. The case, however, is one in which, from an equitable point of view, the defendant-respondent is certainly entitled to any relief which it is within the power of the Courts to give him, and the only method in which I can give such relief, and that only to a limited extent, is by ordering the parties to bear their own costs incurred in both Courts. A provision to this effect will be included in the decree which will be drawn up under Order 34, Rule 4 (1), Civil P.C., in accordance with this judgment. I allow six months time for payment from date of decree, but I see no reason to allow interest pendente lite or future interest.