Hira Singh v. Bishambhar Nath — 1942 DIGILAW 88 (ALL)

JUDGMENT Bajpai and Dar, JJ. - This is an appeal by Kunwar Hira Singh who is a landlord He was an Applicant u/s 4 of the Encumbered Estates Act before the Collector. In due course the enquiry went before the Special Judge. There, a controversy arose between Kunwar Hira Singh on the one hand and Lala Bishambhar Nath and others on the other, a controversy with which we are concerned in this appeal. 2. It appears that Narain Singh, the brother of Hira Singh, executed a mortgage in favour of Lala, Pheki Lal, the father of Bishambhar Nath, for Rs. 2,000 on the 12th of September, 1904. This mortgage was not paid and on the 9th of May, 1914, Narain Singh and Hira Singh executed another mortgage in favour of Pheki Lal for Rs. 6,600. The various items of the consideration of these two mortgages need not be mentioned the mortgage of the 9th of May, 1914, was not paid and therefore a suit was brought on the basis of the same (suit No. 134 of 1924). On the 5th of December, 1924, a decree was passed for Rs. 15,247. Subsequently on the 9th of January 1926 (by this time Pheki Lal was dead and was succeed by his son Bishambhar Nath) another mortgage was executed by Narain Singh and Hira Singh in favour of Bishambhar Nath for Rs. 21,000. This was made up of Rs. 15,247, the decretal amount in suit No. 134 of 1924 and other sums which were either left with the mortgagee for payment of other creditors or for government revenue and expenses of registration. We need not particularise them. 3. When the Applicant landlord filed an application u/s 4 and filed a written statement in the Court of the Special Judge he pleaded that decree No. 134 of 1924 ought to be ripped open and as it was passed upon the mortgage dated the 9th of May, 1914, for Rs. 6,600, more than Rs. 13,200 should not be allowed. This contention was considered by the learned Special Judge and repelled. 4. Hira Singh, therefore, filed an appeal in this Court and he repeats the same contention and draws our attention to Section 14 of the Encumbered Estates Act. 6,600, more than Rs. 13,200 should not be allowed. This contention was considered by the learned Special Judge and repelled. 4. Hira Singh, therefore, filed an appeal in this Court and he repeats the same contention and draws our attention to Section 14 of the Encumbered Estates Act. The relevant provisions of that section with certain omissions are as follows: Clause (4)--In examining each claim the Special Judge shall...decide the questions in issue...subject to the following provisions, namely-- (a) the amount of interest held to be due on the date of the application shall not exceed that portion of the principal which may still be found to be due on the date of the application. (5) For the purpose of ascertaining the principal under Clause (a) of Sub-section (4) the Special Judge shall treat as principal any accumulated interest which has been converted into principal at any statement or settlement of account or by any contract made in the course of the transaction on or before December 31, 1916. (6) For the purpose of ascertaining the principal under Clause (a) of Sub-section (4) the Special Judge shall not treat as principal any accumulated interest which has been converted into principal at any statement or settlement of accounts or by any contract made in the course of the transactions after December 31, 1916. 5. It is conceded that as the mortgage of the 9th of May, 1914, was executed before December 31, 1916, it cannot be touched, but what is contended is that there was a statement of account or settlement of accounts on the 5th of December, 1924 and on that date under the rule of damdupat which is indicated in Section (sic) the principal could not be more than. Rs. 13,200, namely double of Rs. 6,6(sic)0. We would have agreed with this contention if a decree had not been passed on the 5th of December, 19(sic)4 and if a fresh mortgage had been executed or if there had been a statement of accounts or settlement of accounts. The words "statement or settlement of accounts or by any contract made in the course of the transactions" signify that all these things must be by act of parties and not under any decree of Court. No authority has been cited by Learned Counsel for the Appellant in support of this contention. The words "statement or settlement of accounts or by any contract made in the course of the transactions" signify that all these things must be by act of parties and not under any decree of Court. No authority has been cited by Learned Counsel for the Appellant in support of this contention. There is, however, an authority, reported in Mareppa v. Gundo Annaji (1918) 43 Bom. 1 : AIR 1918 Bom. 95, which is against the contention of the Appellant. Batchelor, A. C.J., was construing the words of the Dekkhan Agriculturists' Relief Act, as they occur in Section 13 of that Act. That section reads as follows: In the account of principal there shall not be debited to the debtor any accumulated interest which has been converted into principal at any statement or settlement of account or by any contract made in the coarse of the transactions. 6. The learned Judge then observed: But here this original interest has not been converted into principal at any statement or settlement of account or by any contract made between the parties. The conversion has taken place by means of the decree of the Court and by that decree a single integral sum was awarded to the Defendant as a judgment debt. 7. We also hold that there was no statement or settlement of accounts or a contract made in the course of transactions after December 31, 19(sic)6. There was an adjudication by Court after December 31, 1916, namely on the 5th of December, 1924. The mortgage of the 9th of January, 1925, therefore, has got to be accepted at its face value and that is what has been done by the Court below. Of course proper relief in the shape of reduction of interest has been allowed to the landlord Applicant. There is no force in this appeal and we dismiss it with costs.