BADRI PARSHAD Vs. BABU MURLIDHUR

JUDGEMENT

(1.) THIS is a suit brought by the purchaser and assignee of a mortgagor's interest against the purchasers and assignees of the mortgagee's interest. The mortgage deed between the original parties was dated the 16th of January, 1852. It was a mortgage of what was called the malikana interest of certain talookdars; the amount of that malikana being, during the pendency of the then settlement, a fixed and known sum. The mortgage deed contained this stipulation:

(2.) THE principal question raised by the present appeal, and argued by Mr. Doyne at the Bar, is whether this agreement is sufficient to deprive the Plaintiff of his statutory right, under the 9th and 10th sections of Regulation XXXIV. of 1803, to call upon the Defendants to render the account mentioned in those two sections. A preliminary question however arises as to the legal validity of the agreement. There can be no doubt that such a contract would previous to that Regulation have been a good and legal contract, and that it would, under the law as it row exists since the repeal of the usury laws, be also a good and legal contract, it being an old and well-known customary form of mortgage that the mortgagee should take the mesne profits in lieu of interest, and so be saved from having to account for them. But there can be, on the other hand, no doubt that at the time when this mortgage was made, the law by which, the contract was governed was otherwise; that the Regulation had limited the rate of interest to 12 per cent., and contained provisions under which securities might be avoided if they contracted directly or indirectly for a higher rate of interest; and that the taking of the accounts between mortgagor and mortgagee was regulated by the 9th and 10th sections. Therefore if the stipulation in question had been made in evasion of the usury law introduced by the Regulation, and as a con-trivance for giving the mortgagees a higher rate of interest than that to which they were by law entitled, it would have been a bad contract, and could not have prevented the accounts from being taken in the usual manner. In the present case, however, both the Indian Courts have fouud in favour of the legal validity of the stipulation as will presently be more fully stated. It has however been contended that, however this may be, a mortgagee cannot by contract relieve himself from the statutory obligation of tiling accounts under the 9th and 10th sections; and this is the principal, if not only, point raised by the Appellant.

(3.) THEIR Lordships must by no means be taken to decide that if the amounts received by the mortgagees had been fluctuating they might not have been bound to file the statutory accounts. Those accounts might have been necessary to enable the Court to decide on the validity of the contract set up. In the present case, however, it is clear that the only sum which the mortgages could receive, ultra the interest, was a fixed and unvarying balance of Rs.565, and this the Courts have found to be a sum which the parties might legitimately agree to fix as the allowance to be made for the costs of collection. If this be so, the only result of compelling the Defendants to file accounts would be to increase the costs of suit, which must ultimately fall on the Plaintiff.