Stuart, C.J. and Nanavatty, J:
This appeal has been presented by a certain Jagmohan Das, brother of Indar Prasad.
The brothers are money-lenders in Lucknow. Jagmohan Das in these proceedings represents the interest of both brothers. The appeal has come into being in the following manner: A lady called Bakhtawar Begum, together with her husband Muhammad Hadi, had executed four deeds in favour of Jugal Kishore and Parsotam Das, the sons of Lala Har Narain, money-lenders of Lucknow. The first of these deeds is a registered deed of simple mortgage dated 12th March 1915 (Ex. 1) and the remainders are a deed of further charge dated 21st August 1915 (Ex. 2), a second deed of further charge dated 5th October 1915 (Ex. 3), and a second deed of mortgage dated 5th October 1915 (Ex. 4). The position of the appellant was this: He held deeds of mortgage prior to the deeds Exs. 1 to 4. He was further entitled to put up by subrogati .on previous mortgages which he had satisfied as a shield and he was also the holder of subsequent mortgages Exs. C.-11, dated 8th July 1916, and C.-12, dated 3rd April 1917. He was impleaded in the suit out of which this appeal arises not as a prior mortgagee but as a subsequent mortgagee, but being impleaded as a subsequent mortgagee he, as he had every right to do, put forward his claim under the prior deeds. The suit concluded in a preliminary decree for foreclosure as against the mortgaged property in which certain rights of the appellant were safeguarded. The appellant's case is in the first place that the amount declared requisite for redemption of the foreclosure decree is excessive and in the second place that full regard has not been paid to his claims. He is of course interested in the reduction of the amount payable for redemption as, being a subsequent mortgagee, he has with others a right to redeem. We find it desirable in this particular appeal to take the grounds of appeal seriatim. The first ground taken was that the plaintiffs had failed to prove that Exs. 1, 2, 3 and 4 had been executed for good consideration. There is ample evidence that they were executed for good consideration and this point was not pressed by the learned counsel for the appellant. He has argued at length upon the next three grounds. The learned trial Judge has found that under the provisions of deeds Nos. 1 to 4 the plaintiffs are entitled to have the interest calculated as compound interest with six-monthly rests. The learned counsel for the appellant argues that on a true construction of these deeds interest is either not compound interest or if compound interest, cannot be awarded for a period subsequent to the first three years. We proceed to examine these deeds upon these points.
Deed No. 1 contains the following provisions:
"Interest on the mortgage money at 15 annas per cent per month shall be paid half-yearly according to Hindi month and the Sambat year Vikramaditya. The interest for any half-year shall not be allowed to remain unpaid.
If default be made in paying the interest of any half-year then the interest which becomes due for the half-year shall be added to the principal money and on the aggregate sum also interest at the above rate shall be paid till satisfaction.
If the mortgage money be not paid at the stipulated time then from the date of the expiry of the stipulated period till the day of payment, interest at the rate fixed shall be paid."
We agree with the learned trial Judge that under these provisions compound interest must be charged until the full amount due on the deed is satisfied.
From the very commencement we have the period for the calculation of interest given six-monthly, a condition which would not be present if interest were not calculated at compound rate. It is clearly stated that interest is to be added to the principal and interest charged on that until satisfied. We cannot understand the expression "interest at the rate fixed" to mean simple interest at 15 annas per cent per month. It clearly means that after the period stipulated for the repayment of the principal has arrived interest is to be charged according to the previous condition from that period onward. The two deeds of further charge Exs. 2 and 3 refer explicitly to the deed Ex. 1 and they state clearly that with the exception that the rate of interest has been raised from 15 annas per cent per month to one rupee per cent per month, the conditions of the deed Ex. 1 ought to be applied to the deeds Exs. 2 and 3. Therefore compound interest has been rightly charged under these deeds also. Deed Ex. 4 states in the clearest possible terms that the interest is to be compound interest. We therefore decide the pleas taken in grounds Nos. 2 to 5 against the appellant. The fifth, sixth, seventh, eighth, ninth and thirteenth grounds are in respect of the same matter. They refer to that portion of the decision which is contained under the head of issue 3 (11). The father of Bakhtawar Begum had mortgaged in 1896 two villages Dayanatpur and Badshahpur Ghar to the then Maharaja of Balrampur whose estate was under the management of the Court of Wards. On 27th July 1910, she had sold to Indar Prasad a half-share in Dayanatpur, Badshahpur Ghar, Banwaripur and Silaula Khurd, all villages in Cawnpore, together with a small property in Lucknow. A part of the consideration for the transfer was that he should pay off half the amount due to the Balrampur estate which was calculated at twenty-two thousand rupees. After this deed of sale was executed Indar Prasad transferred a one-anna share in all the four villages to Saiyad Ahmad Raza by a deed of gift. The lady sued Ahmad Raza for the one anna share in these villages in circumstances which are completely unconnected with the present case and obtained that share back from him. Subsequently the Balrampur estate instituted a suit on the basis of the mortgages of 1896 and obtained a decree and brought the villages to sale. The appellant who was then representing Indar Prasad paid the amount due under the decree and got the property released. The learned trial Judge has given the appellant credit for this fact and has permitted him to use this redemption by way of subrogation. He has considered that he may use this redemption to the extent of one-half. In the end he did pay off one-half of the debt. He can obtain no return for that, but he is entitled to obtain credit for the remaining half inasmuch as he paid that amount on behalf of the mortgagor. He actually paid Rs. 47,278-3-0 but in this sum was included Rs. 1,300 which he paid under the provisions of O. 21, R. 89. It will be seen that he did not pay up the amount before the date of sale. This was the course which he should have adopted. He permitted the sale to take place and then taking advantage of the provisions of O. 21, R. 89, he paid the money which was due under the decree. That amounted to Rs. 45,978-3-0, but in addition he had to pay Rs. 1,300 compensation to the auction-purchaser. The learned trial Judge has refused to give him credit for Rs. 1,300 but has given him credit for half of Rs. 45,978-3-0, that is to say, for Rupees 22,989-1-6. The appellant's position here is as follows: He maintains that as Bakhtawar Begum got back one anna in the villages in question and that he was only left with seven annas his liability under the terms of the deed of sale should be reduced from one-half to 7-16ths. The learned trial Judge has rightly repelled the plea.
The vendee obtained a half share. He agreed to pay for the half-share. The fact that the vendee chose afterwards to give a portion of what he had purchased away can in no sense affect his liability. There is no force in the plea on that point. The second point which he takes is that he should be given credit for the full amount to satisfy the decree. There again is no force in that. He was obliged under the terms of the deed of sale to satisfy one-half of the liability. This brings us to the next point. He states that in these circumstances his liability is confined to eleven thousand rupees because the total debt was placed at twenty-two thousand. But the deed of sale Ex. 20 shows clearly that his liability was not confined to one-half of twenty-two thousand rupees, but that he was obliged to satisfy half of the debt due which was estimated at being on 27th July 1910 of the amount of twenty-two thousand rupees. The debt grew considerably greater as time went on. The vendee had not agreed to pay only half of twenty-two thousand, but to satisfy half the debt at the time or in future. The next point is in respect of Rs. 1,300. The learned trial Judge has refused to give the appellant credit for this and we think rightly. In the first place the expenditure of Rs. 1,300 was incurred unnecessarily by the appellant. The money did not go to the mortgagee, but to the auction-purchaser. The necessity for payment arose because the appellant was late with his money. In no circumstances could the present plaintiffs be held liable to make this amount good. S. 72, Act 4 of 1882, has no application in our opinion and there can be no question of priority on the payment of this sum. The learned counsel for the appellant withdrew the plea contained in the 10th ground. The plea taken in the 11th ground is that the learned trial Judge has omitted to allow the appellant future interest on two items. These items will be found in. Ex. C-12. When the appellant took a deed of usufructuary mortgage on 3rd April 1917 as a part of the consideration given by him he paid up two debts, one to Abid Hussein and the other to Ganga Dhar. As the first debt was prior to deeds 1 to 4 and the second debt, though subsequent to deed No. 1, was prior to deeds Nos. 2, 3 and 4, the learned trial Judge has allowed the appellant relief in respect of these payments, but he has not allowed him interest in the future. We think he rightly did not allow interest in the future. As a result of execution of Ex. C-12 the appellant obtained possession of the property and took the usufruct in lieu of interest.
The appellant has argued that if the foreclosure decree is given effect to, he will lose possession, but under this decree he himself has an opportunity of redeeming and while redeeming will be given credit for the amount which he had previously paid. The plea taken in the 12th ground of appeal is as follows. It is argued that the learned trial Judge should in exercise of his discretion have refrained from passing a decree for foreclosure and should have granted a decree for sale. It is to be noted that the deeds on which the decree has been granted are deeds of mortgages by conditional sale, and in these circumstances we fail to understand how discretion could have been exercised. The appellant's interest in any circumstances appear to us to have been safeguarded quite sufficiently. If he wishes to redeem he has an opportunity of doing so. Once he redeems, the property will he his own and all his claims either by way of priority, subrogation or otherwise, will be satisfied. If does not wish to redeem he can bring his claims in a separate suit. The pleas taken in 14th and 15th grounds were not pressed. 16th ground is a general ground which is covered by our decision on the remaining grounds. The appeal, having failed on all the grounds which have been argued, is dismissed with costs.
(This judgment of the Oudh Chief Court was affirmed by their Lordships of the Privy Council by the following judgment:)
Lord Russell of Killowen.-In this case their Lordships think it unnecessary to say anything beyond this. All the points urged before this Board in support of the present appeal have been effectively dealt with by the judgment in the Chief Court of Oudh and their Lordships agree completely with that judgment. In those circumstances their Lordships will humbly advise His Majesty that this appeal be dismissed with costs.