BACHU LAL Vs. JANG BAHADUR RAI

JUDGEMENT

(1.) This appeal arises out of a suit for redemption of a usufructuary mortgage of 10 April 1863. The sum advanced was Rs. 400 in consideration of which a thika was given at an annual rent of Rs. 35-5-0. Rupees 30 out of that sum was set aside for the mortgagee as interest at 7 per cent, per annum on the money advanced; Rupees 4 was set aside for collection charges and the balance of Rs. 1- 5-0 was to be payable by the mortgagee to the mortgagor. This haqazri had never been paid since the execution of the mortgage. The plaintiffs had prayed for an account, praying that if the account should show a balance in their favour, a decree should be given entitling them to realize that amount on payment of the requisite court-fee. The Munsif found that the mortgage had actually been redeemed owing to the defendants failure to pay the haqazri as it fell due, and that a sum of Rs. 924-13-0 was payable to the plaintiffs. He arrived at this result by treating the haqazri as if it had been realized by the plaintiffs, reducing the principal amount due on the mortgage so long as the account showed that anything did remain due on the mortgage, and henceforth he treated the mortgagee as liable to pay the full amount of Rs. 31-5-0 reserved by the mortgage deed, since the mortgagee was no longer entitled to any interest because the principal had already been swallowed up by the accumulating haqazri.

(2.) On appeal, the District Judge modified the decree of the Munsif, merely calculating the arrears of haqazri without reducing the amount of the principal money due year by year; and calculating by this method he found that a sum of Rs. 90-15-4 was due to the defendants. The plaintiffs have appealed from that decision; and a cross-objection has been preferred by certain respondents who held some mortgages of the property. The learned District Judge in adopting his method of calculation, considered that he was bound by the decision in Muhammad Sadiq V/s. Harakh Narain A.I.R (1936) . Pat. 583, but as Mr. B.N. Mitter points out on behalf of the appellants, in that case the rate of interest to which the mortgagee was entitled was not specified in the bond.

(3.) The learned Chief Justice dealing with the zarpeshgi deed in that case, treated the mention of haqazri as fixed and consolidated jama as if that were a fiction; but the present deed is a thika zarpeshgi lease in the ordinary form, whereby the mortgagee obtains a thika lease at a certain reserved rent, retaining for himself a fixed amount of the rent as interest upon the zarpeshgi money. The transaction is a transaction both of lease and of mortgage; but it certainly is a usufructuary mortgage, because by the deed the mortgagee retains the thika property as security for the repayment of the four hundred rupees advanced. The deeds recite that the mortgagee is entitled to interest at 7 per cent, per annum on the amount advanced and that he is liable to pay Rupee 1.5-0 annually to the mortgagor. When at the earliest period of the mortgage the mortgagee failed to pay that amount, the amount due to the mortgagee was reduced by Rs. 1-5-0 and in the following year the amount of interest due on that advance at 7 per cent, was slightly reduced, and in the end the liability of Rs. 400 was by this lease completely wiped out. We consider that the learned. Munsif acted rightly in thus making the account on the principle laid down in Section 76 (h), T.P. Act, and that in a case like this, where the rate of interest is actually specified, the method of accounting adopted in Muhammad Sadiq V/s. Harakh Narain A.I.R (1936) . Pat. 583 would not be properly adopted.