Markanda Pandit and others vs Bidyanath Jethi and others

Wort, J.—This is an appeal from the decision of the Additional District Judge of Manbhum upholding the decision of the trial Court in an action on a mortgage bond.

The only question before us is the question of interest. Interest has been found not to have been excessive although it was at the rate of twenty-four per centum per annum. Mr. Chatterji who appears on behalf of the appellants and who has argued every possible point in the case, also raises a question as to the liability of those members of the family who did not execute the mortgage bond, and contends that in the circumstances those persons are not liable. In my judgment this matter is not open to him having regard to the grounds of appeal as framed The only ground which in any way is connected with the point that has been suggested is that relating to interest ; and in any event, assuming that the point is open, it seems to be answered by the decision of the Courts below. The question of interest for the bond was raised in the ''Courts below and decided by the trial Court and again by the appellate Court (but in the latter instance, after hearing further evidence) against the defendants, that is to say, both the Courts below decided that the bond was for legal necessity. It might be mentioned here that the bond was for Rs. 1,000 which was the amount of interest accruing due on a previous bond. If Mr. Chatterji makes his point as regards necessity of borrowing at this rate of interest, it involve the question which I have stated he has raised, but which is not strictly open to him by reason of the form of the grounds of appeal. But in substance, as I have indicated it makes no difference to his clients.

Mr. Chatterji has rightly contended that it was necessary in the circumstances of the case for the plaintiffs to show not only the necessity for the loan itself, but in terms of the decision of the Privy Council in Nazir Begam v. Raghunath Singh, 1919 P C 12 = 50 I C 434 = 46 I A 145 = 41 All 571 (P C) at p. 149 that in the case of a mortgage made by the manager of a joint. Hindu family it was necessary not only to show

that there was necessity to borrow, but that it was not unreasonable to borrow at some such high rate and upon some such terms, and if it is not shown that there was necessity to borrow at the rate and upon the terms contained in the mortgage that rate and those terms cannot stand.

There is no question here of dismissing the plaintiffs'' claim as regards interest, but the question merely is, what interest should be allowed ? The defendants in their written statement had raised the question in another form by stating that the rate of interest was excessive, and it was from that point of view that the Courts below considered the matter. What appears to have bean in the minds of the trial Judge and the District Judge was whether in the circumstances of the case the interest was unconscionable and excessive within the meaning of the Usurious Loans Act. Now it would appear from what has been said at the Bar that no evidence was directed to the real issue in the matter, that is to say no evidence was given by the plaintiffs that it was necessary for the mortgagors to borrow money at this rate of interest, although according to Mr. Chatterji there were certain bonds (which were produced which were indicative of the proper rate of interest to be paid in the circumstances, (so it was contended). That sort of evidence is the evidence which is usually adduced on the proper issue which should have been tried by the Courts below and, therefore, should be taken into account in considering what should be done in the circumstances of this case. As I have said, Mr. Chatterji was right in saying that the onus was on the plaintiffs. As there is no direct evidence in the matter, it is useless to remand the case to the Court below for a determination of this issue as it will result is the parties being allowed to bolster up their cases by further evidence ; that certainly cannot be allowed. If the case is remanded in the present state of the evidence, the District Judge would have to address his mind to the question of whether this was the proper rate of interest, because only in the case of its being high or improper or excessive that it would be necessary for the plaintiffs to snow the authority of the mortgagors to borrow at that rate. Both the Courts below have come to a clear decision that the rate was not excessive and although, as I have said already, the learned Judges had not in their minds the question of necessity or that the plaintiffs were to prove necessity for the mortgagors to borrow at this rate, the result in my judgment would be the same. Their Lordships of the Judicial Committee in one of the cases relied upon had stated in terms that the High Court was in a better position to deal with the question of the rate of interest than they were themselves, and that was in a case in which both the High Court and the Court below had not correctly applied the principles of law applicable to the case of this kind. In the circumstances of this case I am of the opinion that it would be useless to remand the case, for the finding which would be arrived at on such a remand would, in all probablity, be the same at which the Courts below have arrived at already in other words having considered the question of the fate of interest, and having stated that in the circumstances it was not excessive, the finding on remand would not be otherwise. In my judgment the appeal, therefore, on the substantial ground raised, fails. I should have stated that in coming to this conclusion it should be taken into consideration, although there is no cross-objection with regard to the matter, that the Courts below for some reason, which does not appear to be clear, have deprived the plaintiffs of interest during the pendency of the suit.

I would, therefore, dismiss the appeal with coats.

Verma, J.

I agree.