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Satyabhama Sundari Wife or Chandra Sekhar Majumder Vs. Mohamed Esahak Meah - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1923Cal268,68Ind.Cas.497
AppellantSatyabhama Sundari Wife or Chandra Sekhar Majumder
RespondentMohamed Esahak Meah
Cases ReferredBalla Mal v. Ahad Shah
Excerpt:
interest - bond--high rate of interest--court not to interfere unless interest penal--contract act (ix of 1872), section 74. - .....the munsif that the sum of rs, 144 had been paid by him on account of the debt. this claim the munsif disallowed. the defendant appealed and the lower appellate court found that rs. 144 had been paid by the defendant, and the court modified the decree of the munsif allowing interest at the rate of 25 per cent. there was no cross-appeal by the plaintiff against that part, of the munsif's judgment which disallowed compound interest. the defendant conter(sic)ds that the interest allowed is harsh and unconscionable and he states, relying on the provisions of section 74 of the contract act, that the provision for interest at the rate mentioned in the bond must be taken to be by 'way of penalty and accordingly we are asked to interfere with the rate of interest allowed by the subordinate.....
Judgment:

1. This is an appeal by the plaintiff against a decision of the Subordinate Judge of Noakhally modifying a decision of the Munsif. The plaintiff's suit, was brought on a simple mortgage bond, the principal was Rs, 150. The defendant, agreed to pay interest on the money lent at; the rate of Rs. 3 2 0 percent, per mensem, that he would pay off the, money together with, interest within the month of Bhadra 1317, that he would pay interest for every 3, months within 3 months, otherwise the arrears of every 3 months' interest would, be, regarded as the principal and the defendant would pay interest there on at the rate mentioned in the bond. The date of the bond is the 2nd Sravan 1317. The plaintiff sued to recover Rs. 1.000, deducting Rs. 362,13 which he reliequished out of the compound interest.

2. Ths first Court decreed the suit in part allowing simple interest on the principal at 31/2th percent per month from the date of the bond up to the period allowed for re-demotion and thereafter at 6 percent until realization. The decree to be satisfied within three months, in default the property was to be sold.

3. The defendant contended before the Munsif that the sum of Rs, 144 had been paid by him on account of the debt. This claim the Munsif disallowed. The defendant appealed and the lower Appellate Court found that Rs. 144 had been paid by the defendant, and the Court modified the decree of the Munsif allowing interest at the rate of 25 per cent. There was no cross-appeal by the plaintiff against that part, of the Munsif's judgment which disallowed compound interest. The defendant conter(sic)ds that the interest allowed is harsh and unconscionable and he states, relying on the provisions of Section 74 of the Contract Act, that the provision for interest at the rate mentioned in the bond must be taken to be by 'way of penalty and accordingly we are asked to interfere with the rate of interest allowed by the Subordinate Judge. It seems to us that having regard to the two decisions of the Judicial Committee in the case of Aziz Khan v. Duni Chand 48 Ind. Cas. 933 : 23 C. W. N. 130 : 101 P. Rule 1918 : 165 P. W. Rule 1918 : (P. C.), and in the case of Balla Mal v. Ahad Shah 48 Ind. Cas. 1 : 23 C. W. N. 233 : 35 M. L. J. 614 : 16 A. L. J. 905 : 124 P. Rule 1918 : 25 M. L. T. 55 : 180 P. W. Rule 1918 : 29 C. L. J. 165 : 1 U. P. L. Rule P. C. 2 : 21 Bom. L. Rule 558 (P. C.), that it is not open to us to make a new contract between the parties. Accordingly it is not open to us to interfere unless we are satisfied that the rate of interest charged in the bond was a penalty within the meaning of Section 74. We have referred to the pro-visions of the bond and despite the argument addressed to us on behalf of the respondent it is not, I think open, to ns to hold that the provision for interest in the bond is in the nature of a penalty; consequently, I think, we must restore the decision of the Munsif subject to this that the respondent will be entitled to deduct the sums covered by Exhibits A to A 6 which the Subordinate Judge has found had been paid by borrower.

4. In the result the appeal succeeds and the appellant will be entitled to her costs in this Court only.


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