1. This appeal raises two questions. One relates to the meaning of the phrase 'all interest outstanding on the 1st October, 1937', occurring in Section 8 (1) of Act IV of 1938. The other question relates to the fixing of costs on the basis of confession of judgment when there was not a full confession of judgment.
2. The suit arose out of a mortgage of 1930 executed by the father of defendants 1 to 4. The fifth defendant was a puisne mortgagee. The suit was filed on the 14th November, 1938, that is, after Act IV of 1938 came into force. The plaintiff claimed the principal amount due on the mortgage with interest at 6 1/4 per cent. for the year ending March, 1938, and for the subsequent broken period on the basis that the date on which the interest was payable was the 10th March in each year. The mortgagors admitted the suit debt and confined themselves to disputing their liability for interest from the 10th March, 1937, up to the 1st October, 1937. As for the rest of the claim, the defendants pleaded that a decree for the principal amount of Rs. 5,000 with interest at 6 1/4 per cent. from the 1st October, 1937, with proportionate costs on the admitted amount at the 'confession of judgment rate' and future interest at 6 per cent. might be passed and claimed that the rest of the plaintiff's suit should be dismissed with costs. The fifth defendant, the puisne mortgagee, disputed the whole of the plaintiff's claim.
3. Now on the interest question it seems to us clear that, although a date was fixed for the payment of interest, interest must be deemed to have accrued due from day to day according to the ordinary rule. The word ' outstanding' used in Section 8 (1) appears to have been used in its ordinary dictionary sense of 'unpaid'. On the 1st October, 1937, interest from the 10th March, 1937, to that date had certanly accrued due and though it was not payable until the 10th March, 1938, and was therefore not overdue, it certainly had accrued and was unpaid. It follows that this interest was outstanding as on the 1st October, 1937, and therefore liable to be cancelled under Section 8 (1) of Act IV of 1938. The lower Court's decision was right in this respect.
4. As to costs, the lower Court has given the plaintiff proportionate costs on the amount decreed allowing the pleader's fee only at 1 1/4 per cent, apparently under the first proviso to Rule 31 of the Legal Practitioners Fees Rules. This decision was clearly wrong so far as the fifth defendant was concerned for he raised issues which had to be decided after taking evidence. As against the fifth defendant therefore, the plaintiff was entitled to proportionate costs on the contested scale. It is contended that as against the mortgagors (defendants 1 to 4) the plaintiff was also entitled to costs on the contested scale because they had raised an issue regarding the interest from the 10th March, 1937 to the 1st October, 1937. We are of opinion that this contention should not succeed. In a recent case, Appeal No. 107 of 1938, this Bench had to deal with a similar matter when the defendants admitted liability for the major portion of the decree and raised a contest only regarding a small item. We approved of the decision of the lower Court which gave costs on the uncontested scale so far as the adjnitted amount of the plaint claim was concerned and allowed costs on the contested scale only to the extent to which the claim was actually contested. We pointed out that it was open to the plaintiff under Order 12, Rule 6, of the Code of Civil Procedure to have asked immediately for a decree for the admitted amount on the strength of the written statement. The present case is even clearer, for defendants 1 to 4 definitely submitted to a decree for the amount which has actually been awarded asking that costs should be fixed on the uncontested scale and claiming a right only to contest the small claim for interest before the 1st October, 1937 on which they succeeded. Strictly speaking therefore, they should have been awarded their own costs to the extent to which they succeeded and the lower Court was quite right in giving costs against them only on the uncontested scale for the amount for which they had confessed judgment. The appeal against defendants 1 to 4 is therefore dismissed with costs.
5. As against the fifth defendant the appeal is allowed with costs and the lower Court's decree will be amended so as to give the plaintiff costs on the contested scale proportionate to the amount decreed as against the fifth defendant only.