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Jagannath Rango Dandekar Vs. Bhaskar Gopal Bhat - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number Second Appeal No. 324 of 1908
Judge
Reported in(1910)12BOMLR795
AppellantJagannath Rango Dandekar
RespondentBhaskar Gopal Bhat
Excerpt:
.....the subordinate judge held that the case was one to which the principle of damdupat applied. if there be any element of law in the matter open for our consideration then i am satisfied that the finding of the district judge is correct. if it contain an element of law open to our consideration, i am satisfied that the district judge was right......and necessary charges, to two lacs and odd rupees.4. when this finding was returned, the district judge raised the question of undue influence, and, relying on certain circumstances apparent on the evidence recorded, such as the illiteracy of the mortgagor, his indebtedness to the mortgagee at the time of the transaction and inability to pay off his debts, the fact that he had to mortgage not only his land but also his cart and live stock, and the stipulation as to compound interest, he held that that stipulation rendered the transaction unconscionable. it was contended before him for the present appellant that there having been no allegation of undue influence in the plaint, and no issue having been raised on that question either at the original trial or on remand, it was not competent.....
Judgment:

N.G. Chandavarkar, Kt., J.

1. This second appeal arises out of a suit brought in 1904 by the respondents for the redemption of a mortgage, dated the 18th of June, 1867. The terms of the mortgage were that interest should run at 20 per cent, on the principal sum, Rs. 299, that compound interest should be charged, that the mortgagee should go into possession and enjoy the rents and profits in lieu of principal and interest, and that the mortgagor should redeem on payment of what might be found due on taking accounts. The Subordinate Judge, who tried the suit in the first instance, raised three issues, none of which covered the question whether on account of the stipulation as to compound interest or any other circumstances surrounding the transaction the mortgage was an unconscionable bargain, calling for equitable relief. But in the course of his judgment he observed that ' on account of the high rate of interest with a stipulation to charge interest on interest the burden of redemption becomes so enormous, so much beyond the actual value of the property that it seems a decree for redemption on payment of one lakh of rupees would be virtually a decree declaring that the mortgage cannot be redeemed.' As the appellant before us, who represented the mortgagee, had failed to produce proper accounts, the Subordinate Judge held that the case was one to which the principle of damdupat applied. Accordingly, he passed a decree for redemption on payment of Rs. 598 and costs.

2. The present appellant appealed from that decree to the District Court. The appeal was at first heard by the Subordinate Judge, First Class, with appellate powers, and he remitted the case to the Court, which had tried the suit, directing that a certain person should be brought on the record, and findings recorded on issues framed by the appellate Court. When those findings were returned, the appeal was heard by the District Judge. He accepted those findings except as to the accounts taken on the mortgage. As to those accounts, he sent the case back to the Subordinate Judge with the direction that they should be taken in accordance with the terms of the deed of mortgage, especially with reference to the term as to compound interest; and in his interlocutory order so directing he said:-

On the finding being returned, the Court will consider whether the stipulation as to compound interest should be enforced.

3. The Subordinate Judge, on taking the accounts on the footing of the mortgage, found that the principal debt of Rs. 299 due on it had stollen, after calculating interest and compound interest and deducting the profits and necessary charges, to two lacs and odd rupees.

4. When this finding was returned, the District Judge raised the question of undue influence, and, relying on certain circumstances apparent on the evidence recorded, such as the illiteracy of the mortgagor, his indebtedness to the mortgagee at the time of the transaction and inability to pay off his debts, the fact that he had to mortgage not only his land but also his cart and live stock, and the stipulation as to compound interest, he held that that stipulation rendered the transaction unconscionable. It was contended before him for the present appellant that there having been no allegation of undue influence in the plaint, and no issue having been raised on that question either at the original trial or on remand, it was not competent to the Court at that late stage to accord relief on a ground never pleaded by the respondents. But the District Judge overruled that contention on the ground that in his order of remand, he had said that he reserved the consideration of the question whether the stipulation for compound interest should be relieved against, though he had raised no specific issue as to it. Acting on his finding as to undue influence, he declined to enforce the stipulation as to compound interest and varied the decree under appeal before him by allowing redemption on payment of Rs. 988 odd only.

5. In second appeal the contention as to undue influence is renewed by the learned pleader for the appellant. In the first place, he argues, as was argued before the District Judge, that it was not open to the latter to make out a case of undue influence for the respondents which they had not raised by their pleadings at the original trial. As a general rule, it is true that parties ought to be kept to their pleadings, and the Court should not raise for them in appeal a new point. But to this rule there are exceptions. One of them relates to agreements entered into between persons who stand to each other in the relation of mortgagor and mortgagee, or trustee and cestui que trust. A Court as a Court of Equity is bound to examine into the nature of such agreements, where, on the face of them, or having regard to surrounding circumstances, the Court finds pnma fade grounds to suspect that the transaction is oppressive or unconscionable.

6. That is a duty imposed upon the Court: Vinayak S. Voze v. Raghi (1867) 4 A.C.J. 202; and Kedari bin Ranu v. Atmarambhat (1866) 3 A.C.J. 11. In the first of these cases, the question as to the oppressive character of the transaction had not been raised at the original trial but was raised in appeal. And this Court in special appeal upheld the appeal decree on the ground that the rule above mentioned was binding on the Court as one of Equity. In the second case, the question had not been raised either at the trial or in appeal; nevertheless, this Court reversed the lower Courts' decrees on the ground of undue influence, apparent as that was on the face of the deed of mortgage there in dispute. Then the learned pleader for the appellant in the second appeal before us argues that if it was open to the District Judge to raise the question of undue influence for the first time in appeal, he ought not to have decided it without giving the the appellant an opportunity of meeting it by evidence. This argument would have been sound, if, when the question had been raised before the District Judge, the appellant had insisted upon his right to lead evidence on the question.

7. Instead of that, he took his stand on the bare ground that it was not competent for the Court to raise the question at all. When a question is fairly raised either at the original trial or in appeal and it is met there by one of the parties on a specific ground, though other grounds were open, and the specific ground fails, that party should not be allowed, as a general rule, to rely upon any of the other grounds in second appeal, if the allowing of that ground necessitates a remand for the taking of fresh evidence and thereby prolongs the litigation. In such a case this Court will presume, in the absence of clear indications from the record to the contrary, that the other grounds were waived by the party.

8. For these reasons the decree must be confirmed with costs.

Heaton, J.

9. The District Judge in appeal has held that the mortgage was entered into as the result of undue influence exercised over the mortgagor by the mortgagee. It is contended that this was a question raised for the first time in appeal and that the defendant, the mortgagee, had no opportunity of meeting it by adducing evidence. It seems, however, that all the evidence on the point available has been adduced. Such evidence must necessarily relate to the time of the transaction which was 1867. It is not asserted that there now survives any one who has personal knowledge of what took place then : so the question of undue influence must necessarily turn on the facts disclosed by the documentary evidence. They have been fully and carefully considered. It is not asserted before us that as a fact any lather evidence is available : nor was it asserted so far as the record shows, before the District Judge. If it were shown that fresh evidence were available, it might be necessary to have that evidence recorded and considered : but I see no necessity to remand the case when, as now,' it is not asserted that there is, and when the natural presumption is that there is not, further evidence.

10. If the finding of the Court of first appeal as to undue influence be a pure finding of fact we are bound by it. If it be not; if there be any element of law in the matter open for our consideration then I am satisfied that the finding of the District Judge is correct.

11. It was also argued that the mortgage was a hard and unconscionable bargain which our Courts will not give effect to. If this be a question of fact, the finding of the Court of first appeal is against the mortgagee and cannot be interfered with. If it contain an element of law open to our consideration, I am satisfied that the District Judge was right. Therefore I would confirm the decree of the lower Court with costs.


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