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1971 DIGILAW 167 (ORI)

BHRAMARBAR SAHU v. BASUDEV DAS

1971-09-02

S.K.RAY

body1971
JUDGMENT : S.K. Ray, J. - This is a second appeal by the Defendants who have lost in both the Courts below. It arises out a suit for specific performance of B contract and for setting aside the sale deed executed by Defendant 1 in favour of Kasinath Sahu who was originally Defendant-2, but having died during the pendency of the suit, has been substituted by his legal representatives who are Defendants 2 to 5. The Plaintiff also prays for confirmation of possession in respect of the suit land. 2. The Plaintiff?s case, in short, is that he had taken the suit land, on mortgage, from Defendant on 27-1-1961 for a sum of Rs. 600/-. The mortgage bond stipulated payment of interest at 12?% per annum, and provided two years? time for redemption. As Defendant-1 was not in a position to redeem on the expiry of the redemption period, he contracted with the Plaintiff to sell the property. The oral contract was completed and the consideration money was fixed at Rs. one thousand, part of which was to be adjusted against the outstanding dues under the mortgage-bond amounting to Rs. 775/- and the balance of Rs. 225/- to be paid in cash. Pursuant to the contract, the Plaintiff paid Rs. 225/- in cash to the Defendant who delivered possession of the property on the following day. Four or five days thereafter the parties went to the Sub-Registrar?s Office for Execution and registration of the necessary sale deed. Defendant-1 purchased the stamp paper for the purpose on 4.6.1963. But while the stamp-paper was being written on, Defendant-1 left the place on a pretext and never returned to complete the sale deed. Thereafter, The Defendant-1 sold the suit property to the original Defendant-2 Kasinath Sahu for a sum of Rs. 1000/- on 26.12.1963.Hence the suit. 3. The defence is one of denial of the contract. Defendant 2 took a special plea that he was a bona fide purchaser for value. 4. Both the Courts have negatived the Defendant 2?s special plea and have also held that the alleged contract was true and have, therefore, decreed the suit for specific performance of the contract. 5. Mr. L.K. Dasgupta, appearing for the Appellant, has raised three points, viz.: (i) The date of contract being not certain, the contract itself should be held not to have been established. 5. Mr. L.K. Dasgupta, appearing for the Appellant, has raised three points, viz.: (i) The date of contract being not certain, the contract itself should be held not to have been established. (ii) Assuming that the contract existed in fact, it is void on account of one of its terms being unlawful, that is to say, it involving realisation of interest under the mortgage-bond at the rate of 12?% per annum which is in excess of 9% the lawful interest, recoverable under the Orissa Money Lenders Act. (iii) According to the evidence of the prosecution witnesses, the contract was entered into in the month of Chaitra and it runs counter to the other evidence in the case which fixes the date of contract in the month of Baishakh, and in that view the finding that there was a completed contract, is illegal and unsustainable. In my view, none of the contentions can be sustained. 6. The first, and the third points may be taken together as topically they inter linked. It will be seen that the date of contract is not a term of the contract. The terms of the contract as disclosed in the pleadings and in the evidence of the Plaintiff are definite and certain, and both the Courts also have found that. Absence of date of contract in the plaint may be a factor relevant on the question of factum of contract, but has no bearing on the question of legality of the contract. P.w. 2 is the attester who had signed on the stamp paper purchased by Defendant-1. It is not controversy, rather it is admitted, that Defendant-1 purchased the stamp paper on 4.6.1963. This document shows p.w. 2 as an attester. While deposing in Court to the terms of the contract, purchase of the stamp paper and partial Execution of the sale-deed, he relates the story in a sequence which appears to be natural, and cogent and corroborated by other factors and circumstances in the case. He says that possession of the property was delivered on the day following the date of contract, and three or four days thereafter he accompanied Defendant-1 to Pipli for registration of the sale-deed, where Defendant-1 purchased the stamp. He says that possession of the property was delivered on the day following the date of contract, and three or four days thereafter he accompanied Defendant-1 to Pipli for registration of the sale-deed, where Defendant-1 purchased the stamp. Considering this evidence in the light of the fact that the stamp paper was purchased on 4.6.1963, his evidence that the contract was entered in Chaitra is an obvious mistake and cannot outweigh the other evidence establishing with reasonable certainty that the contract took place four to five days before 4.6.1963. The evidence of this witness as well as the other witnesses is that Rs. 775/- was found to be due under the mortgage bond on the date of the contract. On computation, the amount of interest due under the mortgage bond up to 31.5.963 or 1.6.1963, comes to Rs. 175/- and the aggregate amount of principal and interest (principal being Rs. 600/.) comes to Rs. 775/-, on or about the date of the contract. This corroborates the Plaintiff?s evidence on the point that part of the consideration covered the entire mortgage dues thereby putting an end to the mortgage transaction. The payment of cash also has been proved, and both the Courts below have concurrently found hat the entire consideration money had been paid and the possession of the property had been delivered in pursuance of the oral contract which has been further corroborated by purchase of stamp paper by Defendant-1 on 4.6.1963. This purchase of stamp was attempted it to be explained away by Defendant-1 by saying that he had purchased the stamp paper for Executing the sale-deed in favour of some other person and that sale transaction fell through and that vendee had taken away this document and might have handed over the document to the Plaintiff. That appears to be a cock and bull explanation which was not attempted to be substantiated. The fact, therefore, remains that he purchased the stamp on 4.6.1963 which is a strong piece of evidence in support of the Plaintiff?s case. In the circumstances, I am of opinion that the concurrent findings of the Courts below that there was a contract for sale of the disputed suit land for a consideration of Rs. one thousand, and the contract was true, and unimpeachable on any legal ground. Both the points therefore fail. 7. I will now come to the second point. In the circumstances, I am of opinion that the concurrent findings of the Courts below that there was a contract for sale of the disputed suit land for a consideration of Rs. one thousand, and the contract was true, and unimpeachable on any legal ground. Both the points therefore fail. 7. I will now come to the second point. It is true that the interest recoverable under 80 simple mortgage is 9% per anum. That is provided in Section 9 of the Orissa money Lenders Act. It is, therefore, argued on the footing of Section 23 of the Indian Contract Act that the consideration of the contract being realisation of interest at 12?% under the mortgage-due which is forbidden by the provisions of the Orissa Money Lenders Act, is renders the contract void. It is, therefore, necessary to examine the relevant provisions of the Orissa Money Lenders Act. Section 9 thereof provides that: Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any contract, no Court shall in any suit whether brought by a money lender or by any other person in respect of a loan advanced after the commencement of this Act, pass a decree for interest at rates exceeding 9 per centum simple per annum in the case of a secured loan.... Section 11 of the Money Lenders Act entitled the Court to relieve the debtor of all liability in respect of any interest, in excess of nine per cent per annum in the case of a secured loan and proviso to Clause (iv) of that section provides that: ...Nothing contained in this sub-section shall be deemed to require the creditor to refund? any sum which has been paid to him. Reading these provisions of the Orissa Money-Lenders Act it is quite clear that the prohibition is against the Court passing a decree for interest at a rate exceeding 9% simple per annum, and it imposes no ban for a party to pay and a party to accept a rate exceeding 9%. This is clear from the proviso quoted above. Thus, the Orissa Money Lenders Act does not contain any provision forbidding realisation of interest, out of Court at a rate higher than 9% in case of secured loans and as such, the present contract cannot be treated to be void on that account. This is clear from the proviso quoted above. Thus, the Orissa Money Lenders Act does not contain any provision forbidding realisation of interest, out of Court at a rate higher than 9% in case of secured loans and as such, the present contract cannot be treated to be void on that account. If it had been void, then a party receiving interest at a higher rate than countenanced by law would be regarded as having received an advantage under a void contract, and would be bound to restore it u/s 65 of the contract Act, but the proviso quoted above indicates that the creditor is not to refund any such excess amount paid towards higher rate of interest. This is another indicia that the Orissa Money Lenders Act does not forbid realisation of interest more than 9% in case of secured loans. If the counsel?s contention were correct, then the very mortgage-bond containing a term of contract, forbidden by law, would be void. But the learned Counsel does not go so far as to say that the mortgage-bond is a void document for that reason. The provisions of the Orissa Money Lenders Act only prohibits passing of a decree for interest at a rate exceeding nine per cent, in case of secured loans. No authority has been cited in support of this contention and in absence of any authority and for reasons stated above, J am of opinion that this contention also has no substance. Thus, all the contentions having failed, the appeal is dismissed with costs. Final Result : Dismissed