1. This matter arises upon a contention raised on behalf of the plaintiff that the rule of Damdupat does not apply to mortgages under the Transfer of Property Act. There was a reference for accounts upon a mortgage decree in this suit in the usual course. Accounts have been taken and the Official Referee has made his report disallowing interest exceeding the amount of principal applying the rule of Damdupat. It was contended before me on the strength of Madhra Sidhanta Onahini Nidhi v. Venkaturamanjulu Naidu (1), that the rule of Damdupat does not apply. The question has not so far come up for decision in this Court. In In the matter of Hari Lall Mullick (2), the point was raised but not decided. It was held in that case that an order admitting a creditor's claim was tantamount to a decree, and as such put an end to the contractual relationship between the parties. The very same principle has been acted upon in the case of Nanda, Lal Roy v. Dhirendra Nath Chakravarti (1913) I. L. R. 40 Calc. 710.In the Bombay case of Jeewanbai v. Manordas Lachmondas (1910) L. L. R. 35. Bom. 199, 203. the learned Judge held that the rule of Damdupat was applicable. I find, however, that in that case 26 Madras was not cited. The current of decisions in the Bombay Court has been that the rule of Damdupat does apply: see the case of Sundarabai v. Jayarant Bhikaji Nadgowda (1899) I. L. R. 24 Bom 114.
2. In this Court the uniform rule, ho far as I know, has been to disallow as between Hindus interest larger than the amount of principal in making up a mortgage account. As a Court of first, instance I am not prepared to follow, under the circumstances, the Madras case of Madhwa Sidhanta (1903) L. L. R. 26. Mad. 662. It seems to me that in that, case the learned Judges have overlooked the provision of Section 4 of the Transfer of Property Act, taken with Section 37 of the Contract Act. It is conceded in the Madras case that in the Contract Act provision has been made for the application of the rule of Damdupat. Section 4 of the Transfer of Property Act provides that the chapters and sections of that Act which relate to contracts shall be taken as part o the Contract Act. I, therefore, confirm the report made by the Referee and disallow the contention, raised.
3. Attorneys for the Plaintiffs: B. N. Basu $ Co.
4. Attorney for the first Defendant: P. N. Sen
5. Attorney for the second defendant: R. C. Hazra.