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Udit NaraIn Vs. Bishen Dayal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Judge
Reported in(1886)ILR8All486
AppellantUdit Narain
RespondentBishen Dayal and ors.
Excerpt:
mortgage - words creating simple mortgage--bond--interest after due date-- measure of damages. - - with regard to the first of these propositions and to the contention of the plaintiff, i am not prepared to say that cases might not arise in which a jury or a judge might refuse to give a plaintiff any interest, id est damages, save a nominal amount, but the circumstances would have to be of a very exceptional character; 462 was made for a very short period, and it might well be that for this short period and for pressing reasons the obligors were willing to pay at the rate of 18 per cent, per annum......in them from which any contract could be implied to pay interest, post diem, at the contract rate. the judge below has, in fact, never considered or tried this part of the case, and it will be necessary to remand and issue to him for that purpose. to the extent i have above indicated, the second plea, taken in conjunction with the further plea which, as i have stated, was orally urged at the hearing, must prevail.4. in reference to the third plea, the matter raised by it altogether escaped the attention of the judge, and he has held all the first set of defendants indiscriminately and indistinguishably liable, without first determining the circumstances under which the loan was taken by digambar raiand nihang rai, and whether it was of a character and nature in respect of which.....
Judgment:

Straight, Offg. C.J.

1. This is a suit brought upon a hypothecation-bond of the 27th April 1875, for Rs. 462, executed by Nihang Rai, defendant, and Digambar Rai, his brother, in favour of the plaintiff. The amount of the bond, with interest at Re. 1-8 per cent, per mensem, was to be repaid on the 18th June 1875.

2. The claim of the plaintiff is for Rs. 462, principal, and Rs. 794-8-6, interest to date of suit,--in all for Rs. 1,256-8-6. The first set of defendants consists of Nihang Rai, one of the obligors, and his son Har Narain Rai, Bishen Dayal Rai, son of Digambar Rai, deceased, and his sons Lachmi Narain Rai, Jang Bahadur Rai, and Mahesh Narain Rai, Kali Charan Rai, also son of Digambar, and his son Lal Bahadur Rai.

3. The second set of defendants are alienees of the property sought to be brought to sale, but they are not concerned in the appeal, and it is unnecessary to set out their names. I should add, that of the first set of defendants Har Narain Rai, Jang Bahadur Rai, Mahesh Narain Rai, Lal Bahadur Rai, being minors, are represented by Lachmi Narain Rai as guardian ad litem. The defendants Bishen Dayal Rai, Kali Charan Rai, arid Nihang Rai, pleaded, among other matters, that the consideration of the bond was not paid, that the claim is barred by limitation, and that the plaintiff is not entitled to interest after the due date of the bond at Re. 1-8 percent, per mensem, because he has allowed it to accumulate owing to his own laches, in that he took no proceedings upon the bond until the month of November 1884. Lachmi Narain Rai, for himself and the minor defendants, pleaded that the bond was not executed by Digambar Rai and Nihang Rai to raise money for the necessary expenses of the joint family, of which they and these defendants and their fathers were members; that they, therefore, are not liable to have their shares in the joint property sold; that all that could be sold would be the share and interest of Digambar Rai and Nihang Rai; and further, that the plaintiff cannot, for the reason urged by the other defendants, recover interest at Re. 1-8 per cent, per mensem. With regard to the pleas put forward by the other set of defendants, it is, for the reasons I have already given, unnecessary to deal. It will be convenient here to state that among the issues fixed by the first Court was one in the following terms: 'For what necessity was the money taken? Were the heirs of the executants in any way bent filed thereby? 'The Subordinate Judge who tried the case as the Court of First Instance, being of opinion that, the payment of consideration of the bond in suit was not satisfactorily established dismissed the plaintiff's claim. From this decision an appeal was preferred to-the Judge, who, being of a contrary opinion upon that point, and without reference to any of the other questions raised by the defendants, reversed the decree of the first Court and decreed the plaintiff's claim in full. It is from this decree of the Judge that the appear before us has been preferred, and the pleas that were urged at the hearing were, to shortly state them, as follows: First, that the terms of the bond by which the property was hypothecated were of so general a character that they did not constitute a legal hypothecation; secondly, that the plaintiff was not entitled to any interest after due date; thirdly, that in advertence to the plea raised by Lachmi Narain Rai, for himself and the minor defendants, and to the issue fixed thereon by the first Court, the Judge should have tried the question whether the money obtained under the bond was used for family purposes. It was further urged, but no specific plea in appeal was taken to that effect, that as the plaintiff had allowed so long a period of time to elapse from the due date of the bond before bringing his suit, he was not entitled to interest, post diem, at the rate mentioned in the bond. With regard to the first of the above contentions, it does not appear to me to have any force. It seems to me that the passage in the bond--'Our lights and property in the aforesaid taluka of Rajapur shall remain pledged and hypothecated for this debt'--is sufficiently clear and explicit to constitute and create a charge upon the shares and interests of which it is recited at the opening of the instrument that the obligors are the owners. The first plea, therefore, in my opinion, fails. The contention set up by the second plea, which goes the length of asserting that the plaintiff is entitled to no interest at all for the use of his money, post diem, places the position of the defendants too high. It has been settled now by the highest authority in Cooke v. Fowler L.R. 7 H.L. 27 that interest may be claimed after due date, but that such claim is in the nature of one for damages; and further, in the above case it was also ruled by the then Lord Chancellor, Earl Cairns, to the effect that, where parties agree for a certain rate of interest, up to the day of payment the same rate may be, though not necessarily, adopted in assessing the subsequent damages for non-payment, such rate being one that might be fairly presumed to afford a criterion of what the parties valued the use of the money at. With regard to the first of these propositions and to the contention of the plaintiff, I am not prepared to say that cases might not arise in which a jury or a judge might refuse to give a plaintiff any interest, id est damages, save a nominal amount, but the circumstances would have to be of a very exceptional character; as, for example, where the interest contracted to be paid before due date was exorbitant and extortionate. As to the second proposition, I think that in determining the amount of damages, the question whether the plaintiff has unnecessarily delayed bringing his suit, and so allowed his claim to mount up to a sum far in excess of the principal money originally advanced, may be taken into consideration as a reason for not making the original rate of interest as the basis on which to assess such damages. I have already expressed a view to this effect in a case which is relied on by the defendants--Juala Prasad v. Khuman Singh I.L.R. 2 All 617. For it is to be borne in mind that the principle upon which the obligee of the bond may recover interest after due date, does not rest upon any implied contract by the obligor to pay such interest, but proceeds upon the breach of contract which-has taken place by reason of the non-payment on due date, and the reasonable amount to which the obligee is entitled for such breach. It, therefore becomes a question by what standard the damages should be measured, and it is obviously impossible upon such a matter to lay down any general rule for guidance, as the decision of the question must in each case turn upon its own special circumstances. In the present case, the original loan of Rs. 462 was made for a very short period, and it might well be that for this short period and for pressing reasons the obligors were willing to pay at the rate of 18 per cent, per annum. But it does not necessarily follow at all that they were willing to continue the loan at that rate, or that the use of the money over a protracted period of time was of the same value as for the shorter interval. Nor, under ordinary circumstances, could the obligee have reasonably looked to place his money out for a term of years at more than one rupee per cent, per mensem. Now, it is obvious that all these matters were such as should have been considered by the Judge before determining the amount to which the plaintiff was entitled. It is clear from the terms of the bond of the 27th April 1875, that the provision as to payment of interest at Re. 1-8 per mensem had reference only to the period up to date of payment, and there was nothing in them from which any contract could be implied to pay interest, post diem, at the contract rate. The Judge below has, in fact, never considered or tried this part of the case, and it will be necessary to remand and issue to him for that purpose. To the extent I have above indicated, the second plea, taken in conjunction with the further plea which, as I have stated, was orally urged at the hearing, must prevail.

4. In reference to the third plea, the matter raised by it altogether escaped the attention of the Judge, and he has held all the first set of defendants indiscriminately and indistinguishably liable, without first determining the circumstances under which the loan was taken by Digambar Raiand Nihang Rai, and whether it was of a character and nature in respect of which those two persons, being the managing members of the joint family, could bind the other members. Moreover, there is nothing to show what the ages are of the minor defendants, and whether all of them were in existence at the time the bond of 1875 was made. Of course, those of them who were not born at that time would have no right to resist the plaintiff's claim. The third plea therefore must, I think, succeed.

5. Looking at the case, it appears to me that the most convenient and satisfactory course to adopt in regard to it will be to remand the following issues, under Section 566 of the Civil Procedure Code, to the Lower Appellate Court for findings:

1. Under what circumstances, and for what purposes, was the Rs. 462 borrowed by Nihang Rai and Digambar Rai on the 27th April 1875, and in what character did they borrow it, in what way was the money applied, and did Lachmi Narain Rai and the minor defendants benefit by its expenditure?

In determining this issue the Judge will necessarily have to find which of, if not all, the minor defendants were alive at the date of the loan.

2. In advertence to the remarks made by me in dealing with the second plea, to what amount in the shape of damages is the plaintiff entitled for the use of his money between the due date and the date of the institution of this suit?

6. The findings, when recorded, will be returned into this Court, and ten days will be allowed for objections from a date to be fixed by the Registrar.

Mahmood, J.

7. I, concur.


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