CHOGALAL Vs. MALKARJUNAPPA

JUDGEMENT

(1.) 1. The father of Malkarjunappa, the plaintiff, had mortgaged for Rs. 5,000 on 25th September 1914 a house and other property with one Tanba. On 7th July 1920 Malkarjunappa sold the house to Chogalal, the defendant, for Rs. 4,000 and received Rs. 300 in cash, Chogalal undertaking to pay the balance of Rs. 3,700 to Tanba towards satisfaction of the mortgage debt. Chogalal did not make the payment to Tanba in spite of notices given to him by Malkarjunappa until 14th October 1925 when he paid Rs. 4,865, that is Rs. 3,700 with interest at 6 per cent per annum. Malkarjunappa has now sued him to recover interest at the rate of 2 per cent per mensem and has been given a decree allowing him interest at the rate of 1 per cent per mensem.

(2.) IT has been argued on behal of the appellant-defendant that the suit is not one by an unpaid vendor but merely a suit for damages. Reliance is placed upon Abdulla Beary v. Mammali Beary [1910] 33 Mad. 446, in which it has been laid down (at p. 450) that a promise to pay a stranger is a mere covenant, the breach of which must be compensated in damages, and that there is no occasion for the statutory charge in favour of the unpaid vendor to arise. That decision has been expressly overruled in Sivasubramania Ayyar v. Subramania Ayyar [1916] 39 Mad. 997, where it is held that, though a purchaser under takes to pay a part of the consideration to a stranger, Section 55, Sub-section 4, Clause (b), T.P. Act, still applies. For purposes of the present case, it seems to me immaterial which view is correct. Section 55, Sub-section 4, Clause (b), in giving the vendor a charge upon the property sold for the unpaid purchase money with interest thereon, seems to me to give the interest by way of damages; and in the present case, the unpaid balance having been paid, the vendor is now only entitled to claim interest from the purchaser. The purchaser has, in fact, accepted his liability to pay interest by paying it at the rate of 6 per cent per annum when he made his payment of Rs. 4,865 on 14th October 1925, and it is merely the rate of interest that is in dispute. The question is whether interest at 6 per cent per annum gives the vendor reasonable compensation for the delay in payment.