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Bisesar Ram Marwari and ors. Vs. Thakur Parasnath and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1937All207
AppellantBisesar Ram Marwari and ors.
RespondentThakur Parasnath and ors.
Excerpt:
- - as the revision has partly succeeded and partly failed the parties will pay their own costs in this court......this is admitted. therefore the court should have applied as rate of 4 1/2 + 3 1/2 that is 8 per cent compound interest, instead of this the court has-applied for the period between 31st december 1929 and 19th august 1932 10 1/2 per cent per annum simple on the amount then decreed rs. 7,900. learned counsel for the decree-holder contends that under section 30 there is no provision that a court may alter compound interest into simple interest. on the other hand it is contended that the table in schedule 3 does give the court such an option. it appears that the table is divided firstly into secured loans and unsecured loans, and then each of these is divided into case* where such loans are expressed to be with compound interest or with simple interest. the description indicates that it.....
Judgment:
ORDER

Bennet, J.

1. This is a civil revision by a decree-holder against an order of a learned Civil Judge regulating the rate of interest under Section 30, U.P. Agriculturists' Relief Act of 1934. There was a loan of 1925' and on 31st May 1933 a decree was passed. On 4th January 1936 the Court below varied the interest in accordance' with Section 30. The rate of interest provided in the loan was compound and it was an unsecured loan, the interest being Rs. 1-4-0 per cent per mensem compoundable yearly. Rs 7,900 was the amount of the loan-originally and therefore the case came under Schedule 3, Part C, for loans between Rs. 5,001 and Rs. 20,000 on unsecured loans, -compound interest. For this the formula' is X + 3 1/2. For the period in question it was 4 1/2 per cent, and this is admitted. Therefore the Court should have applied as rate of 4 1/2 + 3 1/2 that is 8 per cent compound interest, Instead of this the Court has-applied for the period between 31st December 1929 and 19th August 1932 10 1/2 per cent per annum simple on the amount then decreed Rs. 7,900. Learned counsel for the decree-holder contends that under Section 30 there is no provision that a Court may alter compound interest into simple interest. On the other hand it is contended that the table in Schedule 3 does give the Court such an option. It appears that the table is divided firstly into secured loans and unsecured loans, and then each of these is divided into case* where such loans are expressed to be with compound interest or with simple interest. The description indicates that it is a kind, of loan which is meant by the column; headed 'compound interest' or the column' headed 'simple interest.' It would be difficult for a Court to lay down any principle on which to decide whether interest was to be compound or simple merely from examining this table, because in aliases the difference would be to the' advantage of one party or to the other, and there is nothing laid down in this Schedule that the Court is to select what would be mostly for the benefit of the debtor. I think therefore that the legislature in framing this table recognized; that certain rates were to be applied to compound interest loans and certain other rates of a larger amount to simple interest loans.

2. A preliminary objection was taken that the points raised would not involve any question of jurisdiction. But it appears to me that the point now established that the Court below applied a rate of interest for which it had no jurisdiction in law to apply is a point on jurisdiction. Accordingly therefore I allow this revision so far as alteration of the simple interest is concerned which I alter to compound interest for the period between 31st December 1929 and 19th August 1932 and I provide that interest of 10 1/2 per cent simple interest, the rate applied for that period, shall be 8 per cent compound interest with yearly rests. No other point has been established. I therefore allow this revision to this extent. As the revision has partly succeeded and partly failed the parties will pay their own costs in this Court.


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