Charles Gordon Spencer, Officiating C.J.
1. This is a suit for sale of mortgaged property brought upon a hypothecation bond dated the 6th of December 1917. The interest was at 9 per cent. per annum, and in default of payment in regular monthly instalments it was to be at 15 per cent. Interest was regularly paid until the mortgagee died on the 30th of July 1918. Upon his death, there was a dispute between the widow and his adopted son as to which was entitled to his estate. Each gave notice (Exs. VIII and IX) to the mortgagor not to pay interest to the other claimant. The appellants, who are purchasers of the equity of redemption, paid the money due up to date on the 15th of January, 1920, into Court under Section 83 of the Transfer of Property Act. There was a suit by a stranger against the widow and the adopted son, O.S. No, 49 of 1921, which was compromised by the widow admitting the right of the adopted son. The Subordinate fudge has given the latter, who is the plaintiff in this suit, a preliminary decree for sale of the hypothecation in default of payment of the amount claimed including interest and costs within two weeks from the decree.
2. The Subordinate judge has held that the deposit made by the appellants was not a proper deposit under Section 83, because it was conditional. He says that the appellants when depositing the amount into Court, requested the Court to decide which of the two counter-petitioners was entitled to receive the amount and also to decide whether the higher rate of interest was payable or not, and further to fix the amount of compensation due for breach of contract in case the higher rate of interest was considered to be penal. We have perused the petition put in by the appellants, which is Ex. I. The prayer portion of this petition merely asks for the issue of notice to the counter-petitioners, for cancellation of the hypothecation deed and the return of the title deeds, and for the direction that they should take the amount due from the amount deposited in Court and pay the petitioner's costs. There is no request that the Court should decide whether the higher rate of interest was payable or not and should fix the amount of compensation payable, as the Subordinate judge surmises. In the body of the petition there is a statement that it is just that an order should be passed directing either the two counter-petitioners or anybody who may be entitled, to receive the whole of the said amount or the amount that may be found due. The Court refused to pass an order upon this petition on the ground that the counter-petitioners were disputing each other's title to receive the mortgage money, not on the ground that the amount due had not been determined. Neither the widow nor the adopted son in their replies to the petition raised any objection as to the correctness of the amount, deposited. The 2nd counter-petitioner, who is the plaintiff in this suit, stated that he was advised that he was entitled to a larger amount, but he did not say what amount was actually due to him. The other counter-petitioner said that she was not able to say whether the amounts deposited into Court were the correct amounts because the 2nd counter-petitioner had taken away the bond. The present plaintiff expressed his willingness to receive the amount deposited if it was paid to him unconditionally and said that if that was done he would waive all other objections. The other counter-petitioner similarly asked for the whole amount to be paid to her. There was no prayer on the part of either the petitioner or the counter-petitioner for a regular enquiry as to the exact amount due. On receiving a petition under Section 83 it was the statutory duty of the Court to give notice to the mortgagee, and it was the mortgagee's duty upon receiving such notice to state the amount due on the mortgage and his willingness to accept the money deposited in full discharge of that mortgage and to deposit the mortgage-deed in Court and receive the money. The Court's reason for refusing to pass orders upon this petition was clearly wrong. It has been decided in Subba Rao v. Paddiammal Nadathi (1923) 46 M.L.J. 74 that the expression 'mortgagee' in Section 83 of the Transfer of Property Act includes the legal representatives of the mortgagee and that a deposit by the mortgagor of the mortgage money is payable to the legal representative as a legal deposit; and in Nagathal v. Arumugham Pillai : AIR1923Mad354(1) it has been held that, where there are disputes among the heirs of the mortgagee and money is deposited in Court but the money not drawn out owing to those disputes, interest will cease to run from the date of the deposit. In Ram-sumran v. Schibzada Bijai Pratab Narain Singh (1885) 5 A.W.N. 347 where there was a dispute as to the succession to the estate of the mortgagee and the mortgagor deposited the money in Court on account of the persons so claiming, it was held that he had complied with the requirements of Section 83. The Subordinate Judge was, therefore, in error in treating the deposit as having been conditional, on account of the title of the legal representatives being undecided. It was no fault of the mortgagors that the succession to the mortgagee's estate was in dispute, and they cannot therefore be made to suffer in consequence.
3. As regards the rate of interest due, the 2nd counter petitioner did not in his reply petition, as he should have done, state how much money was due at that time nor did he question the sufficiency of the amount deposited. He therefore, cannot now be heard to argue that the deposit was invalid because the rate of interest was undecided. The depositors were willing that he should take the whole of the amount deposited if the principal and interest came to that amount; and it is not now suggested that anything more was due. The Subordinate Judge has further held that the deposit was not a proper one because interest was not calculated for the date of the deposit, 16-1-1920, but interest was deposited for the 5th of July 1918 treating that as the first date of the default. The hypothecation deed being dated the 6th of December 1917, there could be no default before the 6th of July and, therefore, if interest for one day, namely, the date of the deposit was in defect, it was made up by the amount deposited for the 5th of July 1918, when nothing was due for that date.
4. It is not necessary to decide the further question which has been raised before us, that is, whether the Subordinate Judge was right in ordering penal interest to be paid from the date of the default or whether the Court should allow a reasonable rate of compensation.
5. Holding that the deposit made by the appellants was a proper deposit, we must allow the appeal and modify the decree by disallowing interest from the date of the deposit in court 16-1-1920. The respondents must pay the costs of the appellants in this Court. Each party will bear his own costs in the lower court.