1. The appellant sued to recover a sum of Rs. 300 as the principal advanced and due on a mortgage executed on July 25, 1947 in his favour by the respondent and another sum of Rs. 100 alleged to be arrears of rent for the two years prior to the suit. The appellant's case was that it was an anomalous mortgage with possession and a personal covenant to repay after three years and that he had leased out the property to the respondent himself. The respondent admitted the lease except for the year 1948 but, according to him, it was a usufructuary mortgage under which the mortgagee was in possession for at least one year and the debt was liable to be scaled down under the provisions of Section 9-A of the Madras Agriculturists Relief Act, 1938. On that basis, he admitted that a sum of Rs. 290 would be due as principal and that a decree might be granted for the same. As regards arrears of rent, he denied liability on the ground that he got nothing from the lands during the relevant period.
2. On the view that the mortgage was an anomalous one, the trial Court held that Section 9-A was not applicable but scaled down the debt under Section 13 of the Act, treating rent as interest. On this basis, it granted a preliminary derree for a sum of Rs. 68. The lower appellate Court without much of a discussion, agreed with the trial Court and dismissed the plaintiff's appeal. Hence this Second Appeal by him.
3. On the facts mentioned whether the mortgage is anomalous or usufructuary, in either case, Section 9-A cannot apply. That section has application only to a usufructuary mortgage in a suit for redemption. This is not such a suit. Though the Courts below declined to apply the section, they apparently did so upon the only ground that the mortgage was an anomalous one. But as I said, even if it was a usufructuary mortgage, Section 9-A would still be inapplicable to the present suit which is not for redemption.
4. The next question is whether the Courts below were justified in treating the rent as interest as defined in Section 3(iii-a) and applying Section 13 to the debt. Clearly they were not Section 3(iii-a) reads:
'interest' means any amount or other thing paid or payable in excess of the principal sum borrowed or pecuniary obligation incurred, or where anything has been borrowed in kind, in excess of what has been so borrowed, by whatsoever name such amount or thing may be called, and whether the same is paid or payable entirely in cash or entirely in kind or partly in cash and partly in kind and whether the same is expressly mentioned or not in the document or contract, if any.
What is paid or payable in excess of the principal should, in order that it may be regarded as interest under the section, be part of the obligation under the debt. There should be nexus between the liability to make such excess payment and the liability to pay the principal. Payments in discharge of obligations arising under different transactions or contracts, are not, in my opinion, within the scope of the definition. The defendant paid rent not in his capacity as a mortgagor but as a lessee from the usufructuary mortgage. Section 9-A(g)(a)(i) is a special provision which for purposes of that section, directs that rent due to the mortgagee on a lease back to the mortgagor should be deemed to be interest on the mortgage debt. There will be no need for this deeming provision if such rent fell within the scope of Section 3(iii-a). Section 3(iii-a) in the present form was introduced by the Amending Act XXIII of ig48. As originally drafted the sub-section contained an Explanation thereto that rent payable by a mortgagor to his usufructuary mortgagee on a lease back to the former should be regarded as interest. But the Explanation was omitted by the Select Committee as it had been embodied in Section 9-A. In my opinion, therefore, the debt is not liable to be scaled down under Section 13 of the Act either.
5. As regards the rent claimed, it cannot obviously e allowed in this suit which is to enforce a mortgage.
6. The result is, the Second Appeal is allowed and in modification of the decrees, of the Courts below, there will be a preliminary decree in favour of the appellant for Rs. 300 with interest from the date of the plaint. In other respects, the suit will stand dismissed. The appellant will have his proportionate costs throughout. Three months for payment. No leave.