P C MUTHU CHETTIAR Vs. KVMEENAKSHISUNDARAM AYYAR

JUDGEMENT

(1.) This is an appeal against a decree of the High Court of Judicature at Madras, dated January 18, 1924, allowing an appeal from the judgment of the Subordinate Judge of Dindigul dated October 80, 1920. The suit was brought by the assignee of a mortgage dated January 28, 1911, for a mortgage decree for Rs. 21,532-8-6, During the pendency of the suit the defendants paid into Court Rs. 12,500. The Subordinate Judge made a decree for a further sum of Rs. 12,801-9-6, but on appeal the High Court held that by the payment into Court the mortgage was discharged, and made a decree accordingly dismissing the suit. Against the last- mentioned decree the plaintiff (hereinafter referred to as the appellant) has preferred this appeal, and the question in it is the rate of interest due under the mortgage.

(2.) It is essential to examine closely the provisions of the two instruments upon which the appellant's title to relief purports to be based. The first of these is a hypothecation bond dated January 28, 1911, by which Subraraania Ayyar (the father of the respondents) purchased a house therein described for the sum of Rs. 20,000 from one Padmanabha Nayudu, of which sum it was by the said bond provided that the sum of Rs. 10,000 should remain outstanding on mortgage of the properties as purchased. On July 27, 1912, the purchaser, Padmanabha Nayudu, by written instrument, assigned his aforesaid mortgage to the present appellant. It is stated in this instrument and apparently not disputed that the mortgagor had, on April 9, 1912, paid in part discharge of the mortgage debt a sum of Rs. 1,000, and that the interest which had accrued on the mortgage debt up to the end of May, 1912, had been duly paid by or on behalf of the mortgagor. On February 11, 1917, a sum of Rs. 12,500 was tendered to the mortgagee in discharge of the mortgage. It is not disputed now that this sum was, upon the construction of the mortgage deed, adopted by the High Court, sufficient to discharge the mortgage debt due up to that date, but the appellant refused to receive it, stating that it was insufficient. On August 21, 1919, the appellant instituted a suit against the mortgagor and his son, alleging, amongst other things, that, according to the terms of the deed of assignment and according to law, the first defendant was bound to pay the interest accruing on the mortgage debt at the rate of eight annas per month, and that on default in paying this interest the defendant was bound to pay the entire balance of the mortgage debt due at the date of this default with compound interest thereon at the rate of Rs. 1 per cent, per mensem from the date of default up to the date of payment, which liability, up to the date of the plaint, was, he alleged, found to be Rs. 21,532-5-6. In respect of this debt he prayed for the usual decree for this amount with subsequent interest thereon and costs.

(3.) On November 28, 1919, the said defendant filed a statement of defence in which he alleged, inter alia, that the plaintiff's construction of the clause in the deed of assignment providing that on default of payment of interest due at any time the appellant was entitled to compound interest at oue per cent 3 with monthly rests, was preposterous and penal, that the tender made by him was adequate and proper, that the plaintiff was not entitled to further interest after the date of the tender, and that he, the respondent, was prepared to pay the sum of Rs. 12,500 if the plaintiff would accept it in full discharge of his claim. On October 30, 1920, the learned Subordinate Judge of Dindigul delivered judgment in the case, holding that on the proper construction of the vernacular words used in the document (i. e., the deed of transfer), it was clear that compound interest at twelve per cent, was agreed upon, that the rate of interest, payable under the suit bond in default of payment of interest every month, was twelve per cent, compound interest, He also held that there was an attempt to tender some amount on February 11, 1917, but that Rs. 12,500 was not actually before the plaintiff, and that the tender was neither legal nor valid, and he accordingly allowed the plaintiff's claim. A formal decree was drawn up for the amount claimed by the plaintiff with further interest and costs less the sum of Rs. 12,500 paid into Court by the first defendant, and on July 4, 1920, drawn out by him. Their Lordships, for reasons to be presently stated, are quite unable to take the same view as the learned Subordinate Judge took as to the proper construction of this suit deed, as it is styled this deed of assignment.