SOLIMUNNISA Vs. SHAIKH JONAB ALI

JUDGEMENT

(1.) This is an appeal on behalf of the plaintiffs in an action for recovery of money due upon an instalment mortgage bond executed in their favour on the 2 December, 1892, by persons now represented by the defendants respondents. On that date the mortgagors took a loan of Rs. 400 and by the bond agreed to repay Rs. 800 in eight instalments of Rs. 100 each. The first instalment was payable on the 11 February 1894 and the latter instalments on the corresponding date of subsequent years down to 1901. The mortgage bond contained a stipulation that, if default was made in payment of an instalment, all the instalments would forthwith become due and recoverable with compound interest at 36 per cent per annum. On the 11 September 1900 the mortgagees commenced an action to recover Rs. 3,522 upon the bond on the allegation that default had been made in payment of the instalment due for 1895 and they had become entitled to recover all the instalments with compound interest. The Court of first instance made a decree in favour of the plaintiffs, but disallowed a portion of the claim for interest. Upon appeal the District Judge found that the instalments for 1894, 1897 and 1891 had been paid in full, that Rs. 35 had been paid out of the instalment for 1895, Rs. 40 out of the instalment for 1898 and Rs. 93 out of the instalment for 1898. He further found that the instalment for 1900 had been duly tendered but refused. On these facts, as upon other circumstances relating to the conduct of the parties to which it is not necessary to refer in detail, the District Judge came to the conclusion that although there was a default in 1895, the mortgagees had waived their right to enforce the stipulation of the bond. He thereupon dismissed the suit. This decision was subsequently affirmed on appeal to this Court. On the 3 July 1906, the mortgagees instituted the present action to recover Rs. 1,199 on the same instalment bond. They alleged in their plaint that since the institution of the previous suit, the instalment for 1901 had fallen due, and further that although the previous suit had been dismissed, they were entitled to recover whatever was due on the mortgage on the footing that default was made in 1895 whereupon they became entitled to recover compound interest upon all the instalments at 36 per cent per annum.

(2.) The Court below concurrently held that the plaintiffs are entitled to recover the instalment for 1901, but nothing in respect of any previous instalment. The Subordinate Judge as well as the District Judge have come to this conclusion on the ground that the part of the present claim which relates to instalments before 1901 might and ought to have been enforced in the previous suit. In this view they have made a decree in favour of the plaintiff for the instalment of 1901 only. As regards interest they have held that the stipulation for payment of compound interest was in the nature of penalty and not enforceable and have consequently allowed simple interest in the shape of damages at 36 per cent per annum.

(3.) The plaintiffs have now appealed to this Court and on their behalf the decision of the District Judge has been challenged on only one ground, namely, that the principle of res judicata has no application to this case and that notwithstanding the decision in the previous suit the plaintiffs are entitled to recover not only the instalment for 1901, but whatever is due in respect of any previous instalment on the footing that upon default made in 1895 they became entitled to recover all the instalments with compound interest at 36 per cent. In answer to this argument it has been contended by the learned Vakil for the respondent that, so far as the instalments before 1901 are concerned, what is now urged as a ground for the claim might and ought to have been made a ground of attack in the previous suit and as the plaintiffs omitted to do so they are debarred under explanation 2 of Section 13 of the Code of 1882. In my opinion the contention of the respondent is well-founded on principle and is amply supported by authorities and must consequently prevail.