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Ram Khelawan and anr. Vs. Ram Nares Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtAllahabad
Decided On
Judge
Reported in51Ind.Cas.52
AppellantRam Khelawan and anr.
RespondentRam Nares Singh and ors.
Excerpt:
hindu law - mortgage--interest, high rate of--necessity--burden of proof. - - the court below has found that the loan was incurred for payment of past debts secured on family property, but it was of opinion that the plaintiffs had failed to prove that there was any necessity for borrowing money at the high rate of interest provided for in the mortgage......that the plaintiffs had failed to prove that there was any necessity for borrowing money at the high rate of interest provided for in the mortgage. it accordingly reduced the rate of interest to simple interest at 18 per cent, per annum and, finding that the amount paid back to the plaintiffs was sufficient to cover the principal and interest at the rate above mentioned, dismissed the suit. the plaintiffs have preferred this appeal. the only contention raised on their behalf relates to the question of necessity for borrowing the money at the high rate of interest mentioned in the mortgage deed. it has been held by their lordships of the privy council, and their decision has been followed in this court, that a mortgagee must not only prove the existence of family necessity but he must.....
Judgment:

1. This appeal arises out of a suit for enforcement of a mortgage, dated the 27th of August 1900. The plaintiffs are the legal representatives of the mortgagees and some of the defendants are mortgagors and the rest are the legal representatives of the other mortgagors. The principal amount secured was Rs. 900. Interest was payable at the rate of 24 per cent, per annum and compound interest with half yearly rests, The amount claimed is Rs. 6,745-4.0, after giving credit for Rs. 2,600 admitted to have been received. Some of the defendants denied the mortgage and also asserted that there was no family necessity for incurring the loan. The Court below has found that the loan was incurred for payment of past debts secured on family property, but it was of opinion that the plaintiffs had failed to prove that there was any necessity for borrowing money at the high rate of interest provided for in the mortgage. It accordingly reduced the rate of interest to simple interest at 18 per cent, per annum and, finding that the amount paid back to the plaintiffs was sufficient to cover the principal and interest at the rate above mentioned, dismissed the suit. The plaintiffs have preferred this appeal. The only contention raised on their behalf relates to the question of necessity for borrowing the money at the high rate of interest mentioned in the mortgage deed. It has been held by their Lordships of the Privy Council, and their decision has been followed in this Court, that a mortgagee must not only prove the existence of family necessity but he must also prove that there was necessity for borrowing at an onerous rate of interest. The latest pronouncement of their Lordships of the Privy Council is contained in their judgment in Nawab Nazir Begam v. Rao Raghunath 50 Ind. Cas. 434 ; 17 A.L.J. 591 ; 36 M.L.J. 521 (P.C.) in the following terms: 'it is incumbent on those who support a mortgage made by the manager of a joint Hindu family to show not only that there was necessity to borrow but that it was not unreasonable to borrow at some such high rate and upon such terms, and if it is not shown that there was necessity to borrow at the rate and upon the terms contained in the mortgage that rate and those terms cannot stand.'

2. This judgment was delivered on the 18th of February last and does not appear to have been reported. Their Lordships adhered to the view expressed by them in Hurro Nath Rai Chowdhri v. Randhir Singh 18 I.A. 1 ; 18 C. 311 (P. C.) ; 5 Sar. P.C.J. 642; 15 Ind. Jur. 34 ; 9 Ind. Dec. (N.S.) 207 and approved of the decision of this Court in Nand Ram v. Bhupal Singh 13 Ind. Cas. 5 ; 31 A. 126 ; 8 A.L.J. 1294. It is true that no evidence was given on the point by either party in this case, but as their Lordships observed in the case to which we have referred, 'the thing spoke for itself.' There can be no doubt that the rate of interest agreed upon by the manager of the family was inordinately high. The property was amply sufficient to secure repayment of Rs. 903 with reasonable interest and the fact that the plaintiffs seek to recover more than Rs. 6,003 by sale of the mortgaged property, is sufficient to show that the security was ample. Under these circumstances we think the learned Subordinate Judge was right in reducing the rate of interest to simple interest at Rs. 18 per cent, per annum. Allowing interest at that rate, the plaintiffs have not only recovered from the defendants the principal amount but also interest at that rate. The suit was, therefore, rightly dismissed and we dismiss this appeal with costs, including in this Court fees on the higher scale.


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