MARIMUTHU PILLAI Vs. GOPALAKRISHNA AIYAR

JUDGEMENT

(1.) The 1 defendant is the appellant before me, and the only question that arises in this Second Appeal is whether the plaintiff, the hypothecatee, is entitled to post diem interest after 23 May, 1911, the date for payment fixed in the document. The document recites that the mortgagor borrowed Rs. 1,000 from the mortgagee, and it states that the amount would be paid within a period of two years, namely, 23 May, 1911... There is also a provision as regards payment of interest once in six months, and a further provision that, if interest be not regularly so paid, the interest in arrears should carry interest at 12 per cent. Contrary to the expectations of the parties, the mortgagor did not pay the amount in 1911, the period of two years fixed in the document, and the suit was instituted by the mortgagee in 1923 to recover the principal, interest, and interest on interest as provided in the document. Both the Lower Courts have held in favour of the plaintiff as regards post Sent interest. The District Munsif however held that the rate to be awarded as interest on arrears of interest should be restricted to 9 per cent., whereas the Lower Appellate Court held that the same should be paid at the rate of 12 per cent as provided in the document.

(2.) The learned Advocate for the appellant contends that no post diem, interest at all is payable if the document be properly construed. He also criticises the award of interest upon arrears of interest by the Lower Appellate Court. There are considerations mentioned in the judgment of the Privy Council reported in Mathura Das V/s. Raja Narinddr (1896) L.R. 23 I.A. 138: I.L.R. 19 A. 39:6 M.L.J. 214 (P.C.) which would warrant the award of post diem interest. I may at once answer the preliminary argument of the learned Advocate for the appellant by saying to be consistent I should either disallow all post diem interest after 1911, or allow post diem interest plus interest on interest as provided in the document. Both the Lower Courts have construed this document as entitling the plaintiff, the hypo-thecatee, to post diem interest, and after consideration I think they are right The ordinary presumption in such cases is this--though a period is fixed for payment of the amount due and though the mortgagor hoped to be able to discharge the amount due on or before the fixed period, the Courts having regard to the ordinary intentions of parties and common course of conduct are entitled to presume that the real intention was that interest should be paid till the amounts are actually repaid, and as put by Sir KumaraswamiSastri, J., in Agnes Isabella Campbell V/s. Audikesavulu Naidu (1924) 20 L.W. 153, "unless there be anything in the document which necessarily indicates that the parties did not intend to pay post diem interest," the tendency of the Courts has been to award such interest.

(3.) My attention has been drawn to two cases decided by this Court, viz., Narasimhayya v. Srinivasayya (1918) 36 M.L.J. 118. (Sadasiva Aiyar and Spencer, JJ.) and Ghantayya v. Papayya (1899) I.L.R. 23 M. 534 (Subramania Aiyar and Moore, JJ.). In the second of these cases, reference was made to a Calcutta decision where Maclean and Banerji, JJ. observed that "in a simple mortgage transaction it is not an unusual intention, that if the principal money he not paid by the stipulated time, interest should continue to run and run at the stipulated rate." Having regard to the decisions which have laid down that, unless intention to the contrary be clear, interest should be decreed by Courts till payment of the debt, I think that the Lower Courts have rightly come to the conclusion that in this particular case the plaintiff is entitled to interest as claimed.