Marimuthu Pillai vs Gopalakrishna Aiyar and Another

Anantakrishna Aiyar, J.—The 1st defendant is the appellant before me, and the only question that arises in this Second Appeal is whether

the plaintiff, the hypothecatee, is entitled to post diem interest after 23rd May, 1911, the date for payment fixed in the document. The document

recites that the mortgagor borrowed Rs. 1,000 from the mortgagee, and it states that the amount would be paid within a period of two years,

namely, 23rd May, 1911... There is also a provision as regards payment of interest once in six months, and a further provision that, if interest be

not regularly so paid, the interest in arrears should carry interest at 12 per cent. Contrary to the expectations of the parties, the mortgagor did not

pay the amount in 1911, the period of two years fixed in the document, and the suit was instituted by the mortgagee in 1923 to recover the

principal, interest, and interest on interest as provided in the document. Both the Lower Courts have held in favour of the plaintiff as regards post

Sent interest. The District Munsif however held that the rate to be awarded as interest on arrears of interest should be restricted to 9 per cent.,

whereas the Lower Appellate Court held that the same should be paid at the rate of 12 per cent as provided in the document.

The learned Advocate for the appellant contends that no post diem, interest at all is payable if the document be properly construed. He also

criticises the award of interest upon arrears of interest by the Lower Appellate Court. There are considerations mentioned in the judgment of the

Privy Council reported in (1896) L.R. 23 I.A. 138 (Privy Council) which would warrant the award of post diem interest. I may at once answer the

preliminary argument of the learned Advocate for the appellant by saying to be consistent I should either disallow all post diem interest after 1911,

or allow post diem interest plus interest on interest as provided in the document. Both the Lower Courts have construed this document as entitling

the plaintiff, the hypo-thecatee, to post diem interest, and after consideration I think they are right The ordinary presumption in such cases is this--

though a period is fixed for payment of the amount due and though the mortgagor hoped to be able to discharge the amount due on or before the

fixed period, the Courts having regard to the ordinary intentions of parties and common course of conduct are entitled to presume that the real

intention was that interest should be paid till the amounts are actually repaid, and as put by Sir KumaraswamiSastri, J., in Agnes Isabella Campbell

v. Audikesavulu Naidu (1924) 20 L.W. 153 ""unless there be anything in the document which necessarily indicates that the parties did not intend to

pay post diem interest,"" the tendency of the Courts has been to award such interest.

My attention has been drawn to two cases decided by this Court, viz., Narasimhayya v. Srinivasayya (1918) 36 M.L.J. 118. (Sadasiva Aiyar

and Spencer, JJ.) and Ghantayya v. Papayya I.L.R.(1899) M. 534 (Subramania Aiyar and Moore, JJ.). In the second of these cases, reference

was made to a Calcutta decision where Maclean and Banerji, JJ. observed that ""in a simple mortgage transaction it is not an unusual intention, that

if the principal money he not paid by the stipulated time, interest should continue to run and run at the stipulated rate."" Having regard to the

decisions which have laid down that, unless intention to the contrary be clear, interest should be decreed by Courts till payment of the debt, I think

that the Lower Courts have rightly come to the conclusion that in this particular case the plaintiff is entitled to interest as claimed.

Finally, the learned Advocate for the appellant wanted to restrict the operation and scope of the ruling of the Privy Council reported in Mathura

Das v. Raja Narindar (1896) L.R. 23 IndAp 139 : ILR A. 39 : 1896 6 M.L.J. 214 (P.C) by drawing my attention to the circumstance that as a

matter of fact in that particular case the mortgage deed contained a provision that the mortgagor would not alienate the property till the amount due

to the hypothecatee had been paid; and it was argued that it was owing to the existence of such condition that the Privy Council held that post diem

interest was awardable. I am unable to accept this contention. This Privy Council decision has been considered in Narasimhayya v. Srinivasayya

(1918) 36 M.L.J. 118 Ghdntayya v. Papayya and Agnes Isabella Campbell v. Audikesavulu Naidu (1924) 20 L.W. 153. I am not able to say that

the learned Judges who decided those cases understood the Privy Council decision in the way in which the learned Advocate for the appellant

wants me to understand the same. No doubt he was able to draw my attention to a decision of the Allahabad High Court, Balwant Singh v. Gayan

Singh I.L.R.(1913) A 534 where the learned Judges of the Allahabad High Court do say that in the absence of such provision in the mortgage

deed as existed in Mathura Das v. Raja Narindar (1896) L.R. 23 IndAp 139: ILR 1896 A. 39 : 6 M.L.J. 214 (P.C), the Allahabad High Court

was not prepared to award post diem interest. But having regard to the decision of this Court and having regard to the reasons contained in the

Privy Council decision, I am inclined to think that the learned Judges of the Allahabad High Court have (speaking with all respect) put rather too

restricted a construction on the decision of the Privy Council reported in Mathura Das v. Raja Narindar (1896) L.R. 23 IndAp 139: ILR A. 39 : 6

M.L.J. 214 (P.C).

For the reasons I have mentioned, I think that the Lower Appellate Court was right in allowing post diem interest and also interest on interest at

the rates mentioned in the document, and I accordingly dismiss the Second Appeal with costs.