NARENDRA NATH MITRA Vs. PABAN MONDAL

JUDGEMENT

(1.) The Suit put of which this revision case has arisen was instituted, by the plaintiff for recovery of the principal and interest due on a registered bond, the amounts of principal and interest claimed being respectively Rs. 80 and Rs. 301-7-6 pies. The rate of interest claimed was what was stipulated in the bond, namely compound interest at 25 per cent per annum with yearly rests. The defendant did not appear to contest the claim. The Judge of the Court below decreed the suit ex parte for the principal amount of Rs. 80 and simple interest at the rate of 25 per cent per annum from the date of the bond, namely 1 May 1921, together with costs. The plaintiff has moved this Court and obtained this rule.

(2.) The learned Judge has refused enforcement of the stipulation as to compound interest contained in the bond for the following reason : "The transaction," says he: is between landlord and his tenant and consisting of arrears of rant and salami claimed. I consider that the transaction is substantially unfair inasmuch as an undue advantage has been taken in getting the very hard terms as to stipulation for compound interest. I therefore consider that the transaction is substantially unfair inasmuch as an undue advantage has been taken in getting the very hard terms as to stipulations for compound interest. I therefore consider the transaction unfair and stipulation to pay compound interest excessive, and by virtue of Section 3, I disallow the stipulation to pay compound interest.

(3.) Section 3 referred to in these observations is Section 3, Usurious Loans Act of 1918.