1. The above revision petition has been referred to a bench at the instance of our learned brother Satyanarayana Raju, J., who felt that there was an apparent conflict between the views represented by the decision in Sreenivasa Rao v. Adbul Rahim Saheb, 1956-2 Mad LJ 189 : (AIR 1956 Mad 618) and Nainumal v. Subba Kao, 1957-2 Andh WR 53 : ( (S) AIR 1957 Andh Pra 546) (FB).
2. The facts relevant for the disposal of this revision petition may be stated briefly: The plaintiff borrowed a sum of Rs. 2,500/- on 24-12-1951, from the defendant, Kancherla Narasimbam, and executed a mortgage to secure repayment of the said sum stipulating to pay an interest of 12 per cent per annum. On 26-12-1951 the plaintiff borrowed from the defendant a sum at Rs. 1,500/,-and executed a promissory note in his favour agreeing to pay 12 per cent interest per annum. On 12-2-1954, the plaintiff sent a sum of Rs. 1,100/- by bank draft towards the promissory note, which was credited to the principal due-thereunder. On 23-6-1954, the plaintiff sent another sum of Rs. 1,900/- towards the debt due under the mortgage. On 16-8-1954 she sent a further sum of Rs. 1,400/- by a bank draft. These payments are not in dispute. There is, however, a controversy as to the appropriation of the sum of Rs. 1,400/- sent by bank draft, which will be referred to later.
3. The defendant instituted O. S. No. 224 of 1955, on the file of the District Munsif's Court, Bhimavaram, for the recovery of the money due under the mortgage executed by the plaintiff on 24-12-1951. The present plaintiff contested that suit inter alia on the ground that out of Rs 1,400/- sent by bank draft the defendant should have credited only Rs. 568-12-9 towards the interest at the rate of 5 1/2 per cent per annum as permitted under Act IV of 1938 instead of Rs. 859-11-0 which he actually credited and that the balance between the latter and the former should! have been credited towards the mortgage. In that suit, however, this question was not gone into and the plaintiff was given liberty to file a suit for the recovery of the dues of Rs. 273-14-6. The mortgage suit ended in a decree and we are not concerned with it in the present proceedings.
4. The plaintiff has now launched the present action for the recovery of Rs. 300-11-0, representing the said sum of Rs. 272-14-6 and subsequent interest thereon at the rate of Rs. 5 1/2 per cent per annum. The plaintiff's case is that the defendant knew that she was an agriculturist, that in law he was not entitled to take more than 5 1/2 per cent on the promissory note loan, that when he received Rs. 1,400/- by bank draft there was an agreement that he would collect interest only at 5 1/2 per cent and that in derogation of such an agreement, he credited towards the promissory note the sum of Rs. 859-11-0 at the contract rate, and that, therefore, the plaintiff is entitled to recover the difference.
5. The defendant denied that there was any such agreement and haa also pleaded that, inasmuch the promissory note loan was fully adjusted and discharged, it was not open to the plaintiff to seek to recover any excess as prayed for in the plaint. He also raised the question that the present suit is barred by reason of the decision in O. S. No. 224 of 1955.
6. Upon those contentions, the learned District Munsif formulated the following two points for determination: -
(i) Is the plaintiff entitled to ask the defendant to reopen the transaction and claim to recover the suit amount?
(ii) Does the decision in 0. S. No. 244 of 1955, District Munsif's Court Bhimavaram, operate as res judicata, and bar the present suit?
On the second point, the learned District Munsif held that the decision in O. S. No. 224 of 1955, does not operate as res judicata in respect of the present suit and, therefore, it is maintainable. That finding is not canvassed before us.
7. The controversy really centres round the learned District Munsif's finding on the first point. The learned District Munsif has held that in the instant case the defendant was bound to collect only 5 1/2 per cent as interest on the amount lent on the promissory note and when the plaintiff had admittedly sent Rs. 1,400/- the defendant should have credited only Rs. 568-12-9 and, therefore the plaintiff was entitled to recover the balance. Mr. Suryanarayana Murthy, the learned counsel for the petitioner has assailed the correctness of the above finding.
8. It is not in dispute that the present suit is not a proceeding under Section 13 of Act IV of 1938. The plaintiff, therefore, cannot claim that it is open to her to ask for the reopening of transaction in accordance with the provisions of Section 13 of the Act. If therefore, it is not a proceeding under the provisions of Act IV of 1938, the plaintiff will have to sustain the action under | the general law. Under Section 72 of the Indian Contract Act, it is open to a party to seek to recover from another any payment made under a mistake. In Shiba. Prasad v. Srish Chandra, AIR 1949 PC 297 the Privy Council held that in India the moneys paid under a mistake of law or of fact could be recovered and the decisions contra of the High Court of Madras were overruled. The question, therefore, is whether this is a suit for the recovery of money paid by mistake of law or of fact. On her own showing the plaintiff's case is that there was a representation at the time of the execution of the mortgage and promissory note that the defendant would receive interest as per the provisions of the Act; and that contrary to that agreement the defendant has collected interest at the contract rate. The controversy between the parties was whether the agreement pleaded by her is true or not. The learned District Munsif found upon the evidence that the plaintiff had failed to make out that the defendant agreed to collect interest at 5 1/2 per cent per annum, notwithstanding the contract to the contrary in the promissory note. It is well-known that there is nothing in the Act prohibiting the parties after the Act came into force from entering into a contract of debt stipulating a higher interest than this is provided under Section 13 of the Act. (vide 1957-2 Andh WR 53 : ( (S) AIR 1957 Andh Pra 546) (FB). If, therefore, the plaintiff contracted to pay an interest at iz per cent and she had failed to prove an agreement or the part of the defendant to collect only the statutory rate of 5 1/2 per cent, it cannot be said that she has made the payment under a mistake of law or of fact, such that she could recover the same in the present proceeding.
9. Mr. Dikshitulu, put forward, in the course of the arguments, an alternative contention that the difference between Rs. 859-11-0 actually credited to the promissory note and Rs. 568-12-9 should in law be regarded as moneys had and received by the defendant to the use of the plaintiff. There is no allegation in the plaint in this regard and the plaintiff cannot be allowed to raise the point at this late stage.
10. After the case has been fully argued before us, we felt that the present revision petition was capable of being decided on the facts and the question of the apparent conflict between the two views represented by the two decisions noted by our learned brother in the referring order dots not fall to be resolved in this petition. Normally, in a revision filed under Section 25 of the Small Cause Courts Act, the courts are reductant to interfere, except in cases of grave injustice. In this case, there is an obvious misapprehension of the legal position resulting in the miscarriage of justice and having regard to the language of Section 25 of the Act, we think it right to interfere-with the order of the learned District Munsif.. The revision petition is, therefore, allowed. The-decree of the lower Court is set aside. There shall be no order as to costs in this revision petition.