1. The decree-holder Bank has filed this appeal against the order of the executing Court consigning to the record room its execution application fully satisfied.
2. Shri Mittal, the learned counsel for the respondent-judgment-debtors, had taken the preliminary objection on the last hearing that the appeal has not been filed by a person duly authorised in that behalf by the appellant-Bank. This objection has necessitated on adjournment as Shri Awasthy, the learned counsel for the decree-holder Bank, wanted to get instructions from his clients. He has today placed on record the copy of a resolution dated 10-1-1969 passed by the Executive Board of the appellant-Bank specifically auhtorising Shri Inder Singh, the Manager of their Ludhiana Branch to file an appeal in this case. The general power of attorney executed by the Directors of the Bank in favour of the Secretary has also been placed on record. By virtue of their powers under the Articles of Associations, the Directors may appear to have authorized the Executive Board to take decisions in such matters. The authorisation in favour of the Secretary was made by the Executive Board on behalf of the Directors. The Secretary had in turn appointed Shri Inder Singh, the Branch Manager at Ludhiana, to take and use all lawful proceedings and means for the recovery and realisation of such debts and advances. He was authorised by this general power of attorney to commence, prosecute and defend at large all sections, suits, claims, etc. etc. He had also been authorised to adjust, settle, and compromise all such proceedings and claims etc. Art. 91 of the Memorandum and Articles of Associations of the appellant-Bank authorises such delegation of powers by the Directors to an Executive Board. The said Board had authorised the Manager of the Ludhiana Branch of the Bank to file this appeal by a specific resolution.
3. A similar objection had been taken by the respondents in the trial Court. The case, had, however, been compromised before that objection could be decided. The filing of this appeal by the Branch Manager at Ludhiana has been specifically authorised by resolution dated 10-1-1969 of the Executive Board. The Articles of Associations provided that the Directors can delegate their powers to the Executive Board from time to time. I, therefore, find no force in the preliminary objection raised by Shri Mittal. This objection is accordingly negatived.
4. The suit as originally filed by the appellant-Bank was for the recovery of a mortgage debt by the sale of the mortgaged property. A compromise decree had been passed on 22nd May, 1959 for a sum of Rs.43,616.71 p with future interest. The deed of compromise provided that the decretal amount was to be payable in monthly installments of Rs.416/- each. The first installment was payable on the 5th day of June,1959 and the subsequential installments on the 15th day of each subsequent English calendar month. In case of default in the payment of three installments during any calendar year, the balance was payable in a lump sum. The consequences that were to follow prompt and regular payments of the installments or a default thereof were incorporated in paragraph 4 of the deed of compromise which runs as follows:--
'It is further agreed that in case the defendants pay the installments regularly as stated above, the bank decree-holder shall charge interest of 4 1/2 % P. A only from the date of the decree instead of 9% P. A. from the date of suit as provided in para No.1 above, at the time of payment of last installments due, and shall also remit the costs of the suit at the same time.'
5. The paragraph is not happily worded and its interpretation has naturally offered some difficulty. It appears to have been the common case of the parties before the executing Court that the respondent-judgment-debtors had cleared the principal decretal amount mentioned in the compromise decree in monthly installments which had been regularly paid on the due dates. Shri Awasthy submits that no such concession had in fact been made. Both the parties had filed statements of accounts in the executing Court. According to the account statement furnished by the respondent-judgment-debtors, they had been paying monthly installments of Rs.416/- each well ahead of the due dates. The dates of payment of the various installments as given in the account statement furnished by the judgment-debtors are borne out to be correct by an account statement, Exhibit D. H./1.,furnished by the appellant-Bank. No appropriation has been made on the amounts received towards the principal or interest and the installments have simply been credited to the respondent's account. The monthly installments received over a period of about two years have been dealt with by the Bank in this manner and no debit entries were raised against the respondents in respect of interest in this statement of account, Exhibit D. H./1.
The Bank has been filing revised account statements on later dates and one such account statement has been filed with the memo of appeal. These revised statements may suggest that the Bank has been trying to shift its position from time to time and has been making improvements in its stand. These account statements are nothing more than admissions made by the Bank in its own favour and are not binding on the Opposite Party. The question of any appropriation towards interest during the period that the respondent were paying the monthly installments regularly could not arise as the rate at which the interest was to be charged could not be determined and it could not be anticipated that the judgment-debtors would be committing any default at any future date. The account statements Exhibit D. H./1. and the one furnished by judgment-debtor may, therefore, suggest that at one stage the parties were agreed that the principal decretal amount mentioned in the deed of compromise had been adjusted by monthly installments paid on or before the due dates. The detailed account statement furnished by the judgment-debtors makes it clear that with the payment of Rs.416/- on 5-8-67,the principal decretal amount had been cleared off and that a sum of Rs.63/- could be adjusted towards the interest due. Subsequent monthly installments of Rs.416/- each were being deposited by the respondents and have been adjusted towards the interest at the rate of 4 1/2 per cent per annum. The learned executing Court may, therefore, appear or have observed correctly in the judgment under appeal that the parties had not disputed before it that installments had been paid regularly as agreed between the parties.
6. It may appear that in case of prompt and regular payments of the monthly installments, the judgment-debtors were to get concessions in more than one form. They were to be charged interest at the lower rate of 4 1/2 percent per annum from the date of the decree instead of 9 percent per annum from the date of the suit. There was not only a reduction in the rate but there was also a curtailment of the period for which the interest was to be payable at the reduced rates. The respondents were also to be absolved from the liability to pay costs of the suit. To my mind, no other interpretation of paragraph 4 of the deed of compromise (reproduced above) is possible. Even if two alternative interpretations can be drawn, the one favourable to the judgment-debtors shall have to be adopted. It was held in Gokaran Singh v. Mangli, AIR 1921 Oudh 138 that where the language of a judgment was doubtful, the benefit of doubt was to go to the judgment-debtors.
7. It was then contended by Shri Awasthy that installments were to be adjusted in the first instance towards the interest due that if this method of calculation is adopted, a substantial amount would still be found outstanding against the judgment-debtors. He goes even so far as to say that from the very start, the appellant-Bank was entitled to adjust the payments towards interest at the rate of 9 per cent per annum. The Bank had no justification to anticipate a default and start charging interest in advantage at the higher rate. As long as it was not known as to which of the two alternative rates of interest fixed by the compromise was to be charged, there could be no appropriation of the amounts received towards interest. This may appear to have been the intention of the parties in the deed of compromise. The monthly interest due on the decretal amount if calculated at the rate of 9 per cent per annum would exceed Rs.300/- and would leave such a small amount to be adjusted against the principal that the respondents would have continued in debt for the rest of their lives in spite of the substantial payments they may have been making regularly every month. It is not likely that any of the parties could have agreed to such an iniquitous arrangement.
8. I see no grounds for interference and dismiss the appeal. the parties are, however, left to bear their own costs as a preliminary objection taken by the judgment-debtors had let to an unnecessary adjournment.
9. Appeal dismissed.