Subbai Goundan vs Palani Goundan and Another

The facts which have given rise to this appeal may be shortly stated. The appellant who had obtained a subsequent possessory mortgage from

2nd defendant sued to redeem a prior possessory mortgage Ex. I dated, 7th April 1903 for Rs. 1,000, in favour of the 1st defendant (1st

respondent). The document provided that the principal amount was payable on 7th April 1910, and ""that in default of payment within the

prescribed time the amount was repayable with interest at 4 annas per Rs. 100 per mensem from the date of expiry.

On 28th May 1910 the appellant deposited Rs. 1,004-2-0 in Court u/s 83 of the Transfer of Property Act. 1st respondent was served with

notice of the deposit but he did not appear and admittedly the money was not drawn from Court; the petition u/s 83 of the Transfer of Property

Act was dismissed on 21-6-10.

On 17th September 1912 the appellant instituted the present suit in which he claimed Rs. 600, as mesne profits for two years, (May 1910 to

May 1912). 1st respondent contended that the amount deposited was not correct, that he had surrendered the land to appellant, that he was

entitled to Rs. 50 for value of improvements and also to interest up to the date of the written statement and that appellant''s claim for mesne profits

was unsustainable.

The District Munsif held that 1st respondent''s plea that he had surrendered the land was untrue and that he was not entitled anything for value of

improvements.

At the same time he disallowed the appellant''s claim for mesne profits and allowed 1st defendant''s claim for interest on the ground that the

amount deposited was incorrect, and directed each party to bear his own costs in the suit. On appeal, the Subordinate Judge confirmed the District

Munsif''s decision. The Lower Court found that the amount deposited was incorrect and fell short of the amount due by 2 annas, the appellant

having by mistake calculated interest for 50 days instead of for 51. In second appeal, it is contended inter alia that the Lower Court should have

held that interest ceased from the date of deposit.

The appellant is not, we think, entitled to raise this contention, Court fee not having been paid on the amount of interest decreed. The valuation

of the second appeal has been taken as Rs. 800, the amount of mesne profits for 4 years from 1910 to 1914. The only question, therefore, for

determination is whether the appellant is entitled to claim mesne profits and whether there was a proper deposit of what was due under the

mortgage.

Section 84 of the Transfer of Property Act provides, that ""when the mortgagor or such other person as aforesaid has deposited in Court the

amount remaining due on the mortgage, interest on the principal money shall cease...as soon as the mortgagor or such other person as aforesaid

has done all that has to be done by him to enable the mortgagee to take such amount out of court."" The section provides that the interest on the

principal money shall cease from the date of the deposit of the ""amount remaining due on the mortgage"".

In Deo Dut v. Ram Autar ILR (1886) A. 502 , the opinion was expressed that, where the mortgagor deposits an amount which falls short of the

amount actually due, presumably interest would not cease, even pro tanto. On the other hand in Haji Abdul Rahman v. Haji Noor Mahmad ILR

(1890) B. 141. Telang J., held that the rule laid down in Dixon v. Clerk (1847) 5 C.B. 365 S.C. 16 L.J. C.P. 237 that the tender of only a part of

the debt must be treated as if it had never been made, applies only where the party making the tender admits more to be due than is tendered.

It may be doubted whether the view taken by the learned Judge is supported by the language of Section 84 of the Transfer of Property Act. On

the wording of the mortgage document Ex. I, the principal amount was repayable on 7th April 1910 and interest was payable from the date of

expiry (presumably 7th April) excluding that date. In the absence of mercantile custom or usage, interest cannot be charged for either the day the

money was advanced or on which it was repaid. See Raghub Prusti v. Bhobui Sahoo (1903) 8 C.W.N. 216.

The appellant appears to have made a bona fide mistake in calculating the number of days for which interest was payable. Interest was payable

clearly from and including 8th April 1910 up to the date of deposit i.e., 28th May 1910. In other words, interest was payable for 23 days in April

and 28 days in May. The appellant seems to have thought that interest was not payable for the 28th day of May, which was the date of deposit.

For 23 days in April the interest came to Rs. 1-14-8 and for 28 days in May, it amounted to Rs. 2-4-1 17/31. Interest for 27 days only was Rs.

2-2-10 2/31. According to the plaintiff''s calculation therefore he had to deposit Rs. 4-1-6 2/31 and he deposited Rs. 4-2-0 (in addition, of

course, to the sum of Rs. 1,000.) He evidently thought that he had paid about 6 pies more than what was due. Strictly speaking he had to pay Rs.

4-2-9 17/31 that is, 9 17/31 pies more than he paid. (The Lower Court''s view that the deposit fell short of 2 annas seems to be based on a wrong

calculation). That the plaintiff had to pay the interest for the 28th May also seems to be clear from the maxim ""Fractionam deci non receipt lex.

Where there are conflicting rights as between subject and subject a fraction of a day will be treated as a whole day; as for instance, in a claim for

demurrage of a ship, in which case it was expressly held that a fraction of a day counts for a day, Commercial Steam Ship Co., v. Boulton (1875)

L.R. 10 Q.B. 346. A creditor cannot also be required in reason to seek another investment for his money on the very day it is paid up. We regret

that we are constrained to hold that the deposit made by the plaintiff, having fallen short of the sum due by 9 1/2 pies, was not a proper deposit,

though we are unable to agree with the learned Subordinate Judge that the deposit should have included the interest till the date on which the

defendant got notice of the deposit through Court. Section 84 requires the mortgagor only to do all that has to be done by him to enable the

mortgagee to take such amount out of Court and when he pays batta for notice with the proper address of the mortgagee he has done all that has

to be done by him. See also Krishnasami Chettiar v. Ramasami Chettiar ILR (1910) M 44, where it is said that, if the mortgagor pays the proper

amount into Court and causes a notice to be issued upon the mortgagee, there is nothing more that he has got to do under Sections 83 and 84 of

the Transfer of Property Act to stop the running of interest except that he should not afterwards withdraw the money which he deposited in Court.

We are therefore constrained to substantially confirm the decree made by the Lowar Courts; but we think the mortgagee''s conduct was

altogether unreasonable. He dishonestly raised a false plea as to the delivery of the mortgaged property to the plaintiff and his claim to be entitled

to the value of alleged improvements was also disallowed. We will therefore modify the Lower Appellate Court''s decree by directing the parties to

bear their own costs in that Court. With this modification the second appeal will stand dismissed but without costs.