SYED NAWAB MEHDI HOSSEIN KHAN Vs. RAMESWAR KOER

JUDGEMENT

(1.) THE suit in which this appeal is presented is one for the enforcement of a simple mortgage. The Subordinate Judge passed a decree in favour of the plaintiffs for the sum of Rs. 124,239 8a. and interest at 4 per cent, per annum from the date of the suit to date of realization; with directions for sale in case of non-payment in six months. Both parties appealed to the High Court on several grounds; when the High Court varied the decree by ordering 12 per sent. interest instead of 4, and with that exception affirmed it. The defendant appeals from the High Court decree on grounds of which only two need be considered.

(2.) THE mortgage bond in question is dated August 9, 1880. The principal money secured is a lac of rupees to be paid in five years. Interest is to be paid at the rate of R. 1 per cent, per mensem, by three equal instalments in the year, each for four months' interest. In default of those payments of interest, the bond provides that the unpaid interest shall be added to capital and bear interest in its turn.

(3.) THE Gya bond is dated March 26, 1881, and is made payable six months later. The Indian Contract Act, 1872, follows the ordinary rules of law in providing that when the debtor has omitted to intimate, and when there are no circumstances indicating, to which of several debts a payment is to be applied, the creditor may apply it at his discretion to any. debt actually due and payable to him from the debtor. In this case the mortgagor did omit to intimate any intention on the point. Mr. Arathoon contends that there are circumstances indicating that his payments should be applied to the bond in suit. But the only circumstance he can point to is the original reluctance f of the mortgagor to pay any compound interest at all. That reluctance was overcome, and it has nothing whatever to do with the appropriation of payments. It is clear that the mortgagees had a right, in the silence of the debtor, to apply to the Gya bond payments made after September 26, 1881, when that bond had fallen due.