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Chuni Lal Marwari Vs. Shama Charan Misser and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in(1899)ILR26Cal238
AppellantChuni Lal Marwari
RespondentShama Charan Misser and ors.
Excerpt:
interest - compound interest--the santhal parganas settlement regulation (iii of 1872), section 6--the santhal parganas justice regulation (v of 1893), section 24--contract act (ix of 1872), sections 23 and 24--'unlawful' consideration, meaning of. - .....any adjustment of account which is not final, and includes the renewal of an existing claim by bond, decree or otherwise when without the passing of fresh consideration the original claim is increased by such renewal. illustration.--a bond is given for rs. 75, of which rs. 25 are interest. unless the obligee can prove to the satisfaction of the court that he gave such consideration for the bond as rendered the transaction fair and equitable, of the rs. 75, rs. 50 only will bear interest, and the limit of the claim on the bond will be rs. 100.' there is no law or regulation laying down that an agreement between any two persons living in the santhal parganas to pay compound interest upon the amount borrowed is unlawful within the meaning of section 23 of the contract act. all that the.....
Judgment:

Ghose and Rampini, JJ.

1. The suit out of which this appeal has arisen was based upon two bonds; but there is no question raised before us as regards the first of them. The learned Vakil for the appellant has confined his remarks to the second bond. It appears that this bond was for a certain sum of money, a part of which was interest upon the amount covered by the first bond, and it was agreed between the parties that the whole amount of the consideration as mentioned in the bond should bear interest, the result being that the obligor promised to pay interest upon the interest which was due upon the first bond. The Courts below have given a modified decree to the plaintiff.

2. It has been contended on behalf of the defendant-appellant that, inasmuch as a part of the consideration for this bond was unlawful according to Section 23 of the Contract Act, the plaintiff obligee is not entitled to recover, having regard to the provisions of Section 24 of that Act, any portion of the money covered thereby.

3. Reference has been made to Section 6 of the Santhal Regulation III of 1872, as also to Section 24 of Regulation V of 1893, which modified to some extent the former Regulation. Section 6 provided that 'all Courts having jurisdiction in the Santhal Parganas shall observe the following rules relating to usury, namely, interest on any debt or liability for a period exceeding one year shall not be decreed at a higher rate than two per cent, per mensem, notwithstanding any agreement to the contrary, and no compound interest arising from any intermediate adjustment of account shall be decreed,' and so forth. Section 24 of the other Regulation provides that to 'section 6 of the Santhal Parganas Settlement Regulation the following shall be added, namely: Explanation.--The expression 'intermediate adjustment' of account in Clause (a) of this section means any adjustment of account which is not final, and includes the renewal of an existing claim by bond, decree or otherwise when without the passing of fresh consideration the original claim is increased by such renewal. Illustration.--A bond is given for Rs. 75, of which Rs. 25 are interest. Unless the obligee can prove to the satisfaction of the Court that he gave such consideration for the bond as rendered the transaction fair and equitable, of the Rs. 75, Rs. 50 only will bear interest, and the limit of the claim on the bond will be Rs. 100.' There is no law or regulation laying down that an agreement between any two persons living in the Santhal Parganas to pay compound interest upon the amount borrowed is unlawful within the meaning of Section 23 of the Contract Act. All that the law provides is that compound interest will not be decreed by any Court. And it appears to us that the illustration to Section 24 of Regulation V of 1893, which we have just adverted to, shows clearly that a contract of this character may be so treated as to allow the obligee such sums of money as in law he is entitled to recover, notwithstanding that part of the consideration is compound interest, We are of opinion that the argument of the learned Vakil for the appellant on this head cannot be sustained, and that the plaintiff is entitled to recover the terms of money for which the Court below has given him a decree, barring compound interest.

4. Another point has been raised before us, and it is this: No decree ought to have been given in this case binding the minor son of the obligor at any rate charging the mortgaged property. It appears to us that the Judicial Commissioner has found that the bond was given by the father of the family in his representative capacity, and in that view of the matter the plaintiff is entitled to the relief which he asks for, it not being shown by the defendant that the debt was contracted for any immoral purpose.

5. For these reasons we think that the appeal fails and must be dismissed with costs.


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