Case: Meghraj &amp; Ors Vs. Mst. Bayabai &amp; Ors

which any payment is to be made by the mortgagor, and the mortgagee is bound to accept the condition needs no serious consideration.9. It was next urged that the decree was passed by the Trial Court awarding interest at the rate of 3 per cent per annum and the order of the High Court in appeal modifying the original decree by awarding interest at the rate of 4 per cent was erroneous. Under the decree of the Trial Court interest was awarded at 3 per cent. In appeal interest was awarded by the High Court at 4 per cent. Thereafter by a modification in an application for correction of the decree interest at 4 per cent per annum was awarded from August 12, 1941 to November 10, 1946. It was urged, relying upon the order modifying the rate of interest, that from November 11, 1946 the mortgagees were entitled only to interest as the rate of 3 per cent. There is no substance in that contention also. The High Court by order dated August 10, 1946, observed:"A preliminary decree for the sale shall be drawn accordingly and the defendants (the appellant) are given three months; time from today to pay off the decretal amount. The amount shall carry interest at the rate of 3 per cent per annum from the date of suit to 11-8-1941 and at the rate of 4 per cent per annum from 12-8-1941 to the date of satisfaction."Apparently the decree drawn up by the High Court was not consistent with the directions given in the judgment, and an application was made to rectify certain mistakes in the decree. One of the grounds urged in support of the application was that interest should have been computed only on the principal out of the total of Rs.35,299-1-6. The Court rejected the application holding that the Trial Court had decreed the claim of the mortgagees and that interest was payable on Rupees 35,299-1-6 and the High Court had confirmed the decree holding that the amount of Rs.35,299-1-6 was principal. The High Court observed that it was not relevant to consider whether that decision was right, because there was no application review of judgment. They then directed that "the interest will accordingly be calculated on Rs.35,299-1-6 at 3 per cent from October 5, 1936 till August 11, 1941 and at 4 per cent from August 12, 1941 till November 10, 1946. This comes to Rs.50,810-4-6. The decree will be amended accordingly." Relying upon this direction, counsel for the appellants contended that the High Court by order dated March 31, 1947, restored for the period after November 10, 1946, the rate of interest as originally awarded by the Court of First Instance. We are unable to hold that the direction is capable of that interpretation. By directing that interest at the rate of 4 per cent from August 12, 1941 to November 10, 1946 shall be calculated on Rs.35,299-1-6, it was not, and could not be, intended by the High Court that interest after November 10, 1946, was to be awarded only at the rate of 3 per cent. No such application was made by the debtors. It was apparently contended that the amount of Rs.35,299-1-6 as claimed by the plaintiffs in the original suit included interest, and interest could be computed on the amount which formed the principal. The High Court, in view of the decree passed by the Trial Court and confirmed by it, declined to enter into that controversy and indicated the manner in which the interest was to be calculated between October 5, 1936 and November 10, 1946. The High Court did not reduce the rate of interest for the period after November 10, 1946, i. e, the date fixed for redemption of mortgage under the decree of the High Court.10. Counsel then urged that in any event the mortgagees are not entitled to interest exceeding the principal. Reliance in this connection was placed upon the Madhya Pradesh Money Lenders Act 13 of 1934. Section 9 of that Act provides:"Notwithstanding anything contained in any other enactment for the time being in force, no court original or appellate shall decree, in respect of any loan made before this Act comes into force, on account of arrears of interest, a sum greater than the principal of such loan".The section prohibits the Courts from awarding interest exceeding the principal of the loan. Counsel for the appellants contends that if all the amounts deposited from time to time by the debtors be aggregated, it will appear that an amount exceeding the loan was paid. But the prohibition of the statute is against the making of a decree for arrears of interest exceeding the amount of loan. In the present case the decree awards interest amounting to Rs.746.30, whereas the principal is Rs.33,866.51.11. Finally, it was contended that the Custodian of Evacuee Property is not entitled to claim a decree absolute for sale, and only Mohamad Ayyub - one of the partners in the firm of Seth Haroon and Sons - may alone by given a decree absolute in respect of his share. That contention is futile. The Court is concerned at this stage to pass a decree absolute for sale in a mortgage suit. It is not concerned to determine the respective rights of the mortgagees inter se. The mortgagees interest is fully represented before the Court. Whether or not the Custodian of evacuee Property is entitled to the money or that the evacuees have a subsisting interest is a matter which cannot be decided in this appeal. That was made clear by the judgment of the High Court in the application filed by the Custodian of Evacuee Property by order dated November 12, 1962, when the High Court observed:"Time has not come yet to determine this question and it is not necessary at this stage to decide what are the respective rights of the evacuees in the property which is before the Court as between the evacuee-plaintiffs and the Custodian".12.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]4. Under the preliminary decree an amount of Rs.42,430-2-6 was declared due upto June 23, 1941 towards principal and interest. The mortgagors made no payments under the decree directly to the mortgagees.But from time to time they claim to have made deposits in the Court under Order 21, Rule 1 of the Code of Civil Procedure, and in depositing some of the amounts they stated that the payments were towards the principal due. But there is no evidence on the record that the mortgagees were informed that the amounts were deposited towards the principal due, nor is there evidence that the mortgagees accepted the amounts towards the principal. For quite a long time the mortgagees did not withdraw the amount lying in Court. Unless the mortgagees were informed that the mortgagors had deposited the amount only towards the principal and not towards the interest, and the mortgagees agreed to withdraw the money from the Court accepting the conditional deposit, the normal rule that the amounts deposited in Court should first be applied towards satisfaction of the interest and costs and thereafter towards the principal wouldthe normal rule is that in the case of a debt due with interest any payment made by the debtor is in the first instance to be applied towards satisfaction of interest and thereafter to the principal. It was for the mortgagors to plead and prove an agreement - that the amounts which were deposited in Court by the mortgagors were accepted by the mortgagees subject to a condition imposed by the mortgagors In the present case there is no evidence which supports the contention raised by counsel for thethe account submitted by the mortgagees shows clearly that they had given credit for the amounts deposited towards the interest and costs in the first instance and the balance only towards the principal. The account submitted by the mortgagees clearly negatives the plea of theis no substance in that contentionthe decree drawn up by the High Court was not consistent with the directions given in the judgment, and an application was made to rectify certain mistakes in the decree. One of the grounds urged in support of the application was that interest should have been computed only on the principal out of the total of Rs.35,299-1-6. The Court rejected the application holding that the Trial Court had decreed the claim of the mortgagees and that interest was payable on Rupees 35,299-1-6 and the High Court had confirmed the decree holding that the amount of Rs.35,299-1-6 was principal. The High Court observed that it was not relevant to consider whether that decision was right, because there was no application review of judgment. They then directed that "the interest will accordingly be calculated on Rs.35,299-1-6 at 3 per cent from October 5, 1936 till August 11, 1941 and at 4 per cent from August 12, 1941 till November 10, 1946. This comes to Rs.50,810-4-6. The decree will be amended accordingly." Relying upon this direction, counsel for the appellants contended that the High Court by order dated March 31, 1947, restored for the period after November 10, 1946, the rate of interest as originally awarded by the Court of First Instance. We are unable to hold that the direction is capable of that interpretation. By directing that interest at the rate of 4 per cent from August 12, 1941 to November 10, 1946 shall be calculated on Rs.35,299-1-6, it was not, and could not be, intended by the High Court that interest after November 10, 1946, was to be awarded only at the rate of 3 per cent. No such application was made by the debtors. It was apparently contended that the amount of Rs.35,299-1-6 as claimed by the plaintiffs in the original suit included interest, and interest could be computed on the amount which formed the principal. The High Court, in view of the decree passed by the Trial Court and confirmed by it, declined to enter into that controversy and indicated the manner in which the interest was to be calculated between October 5, 1936 and November 10, 1946. The High Court did not reduce the rate of interest for the period after November 10, 1946, i. e, the date fixed for redemption of mortgage under the decree of the Highcontention is futile. The Court is concerned at this stage to pass a decree absolute for sale in a mortgage suit. It is not concerned to determine the respective rights of the mortgagees inter se. The mortgagees interest is fully represented before the Court. Whether or not the Custodian of evacuee Property is entitled to the money or that the evacuees have a subsisting interest is a matter which cannot be decided in this appeal. That was made clear by the judgment of the High Court in the application filed by the Custodian of Evacuee Property by order dated November 12, 1962,