1. This is a second appeal by the plaintiffs against the decree of the lower appellate Court refusing to grant interest to the plaintiffs, although the Court upheld a decree for a sum of Rs. 3,000 in favour of the plaintiffs as compensation. The plaintiffs sued under the following circumstances: Defendants 1 and2 executed a sale-deed of certain zamindary property to the plaintiffs on 28th November 1916. On the same date defendants 1 and 2 executed a deed of security in favour of the plaintiffs agreeing that if defendants 1 and 2 were held not to be absolute proprietors of the property specified in the sale-deed, or if they were not found to be the lawful heirs of the estate of their deceased brother Gaya Prasad, or if any defect in title was found in the property sold, then in all those cases the defendants would be liable for all damages and costs of the plaintiffs. This deed of security was executed on account of a suit, No. 233 of 1917, which was then pending between defendant 3, Mt. Singari, widow of Gaya Prasad, and defendants 1 and 2. Eventually in that suit it was held by their Lordships of the Privy Council that Mt. Singhari was entitled to 1/3 of the property sold as successor of her deceased husband, Gaya Prasad. Accordingly she filed a suit, No. 161 of 1927, against the plaintiffs and defendants 1 and 2, claiming possession of 1/3 of the property sold, and the plaintiffs having no hope of success in that case, compromised the case by the payment of Rs. 3,000 to defendant 3, on 8th September 1928. The present suit claims this amount of Rs. 3,000 to be paid to the plaintiffs under the agreement for security and for interest from 8th September 1928, up to the date of suit at 1 p.c, p.m. and pendente lite and future interest up to the date of realization at the same rate. The lower appellate Court has allowed the amount of Rs. 3,000, but has disallowed the claim for interest on the ground that in the contract between the parties there was admittedly no covenant to pay interest, and the case did not come under the Interest Act or any other law.
2. It has been argued before us that the case does in fact come under the agreement for security between the parties. That agreement states that the defendants will be personally liable for any loss or damages incurred by the plaintiffs. The vernacular words are 'nuksan wo harja.' The question is whether these words will cover interest on the amount which the plaintiffs had to pay. No precisely similar case has been shown to us, and learned Counsel for appellants has made reference to the following rulings in which there was no contract between the parties but in which it was held that interest should be allowed although the case-did not come under the Interest Act: Abdul Jalil Khan v. Mohammad Abdul Salam Khan : AIR1932All505 and Hamira Bibi v. Zubaida Bibi AIR 1916 PC 46. We consider that in the present case, in view of the' provisions of Section 73, Contract Act. i the words 'loss and damages' do include the interest on the sum which the plaintiffs had to pay. learned Counsel for defence argued that a liability for interest would only arise in caseu the plaintiffs had been dispossessed of the portion of their property claimed by defendant 3. We do not consider' that any distinction is to be drawn between loss of possession of the property and the payment of a further sum arising from the defect of title of the vendors. In either case the plaintiffs sustained a loss of capital, and in addition the plaintiffs have had j a loss of interest. The plaintiffs are entitled to compensation for both kinds of loss, the loss of capital and the loss of interest. Accordingly we allow this second appeal with costs and we grant the plaintiffs a decree for simple interest at 1 per cent p.m., which we take to be a fair rate, and: this interest will be payable from 8th September 1928, up to the date of suit, and pendente lite and up to the date of payment.