The provisions of the Money-Lenders Act can be applied to claim proceedings under the Abolition Act, in order to determine whether the principal amount claimed by a creditor is legally and justly due.

Judgement

VAIDIALINGAM, J. : This appeal, on certificate, is directed against the judgment of the Orissa High Court, dated January 4, 1963, and rendered in Miscellaneous Appeals Nos. 94 and 95 of 1960.

2. The circumstances, under which this appeal arises, may be briefly stated. The predecessor-in-title, of the respondents, had executed three mortgages in favour of the appellant-company, which is registered in London. The first mortgage was executed on October 23, 1903, securing a sum of £ 1,35,000. Inasmuch as, according to both parties, this mortgage has been completely redeemed in 1935, it is not necessary to make any further reference to this transaction. The second mortgage was executed on December 18, 1906, under which a sum £77,500 was borrowed by the mortgagor. Even according to the appellant, in respect of this mortgage, the respondents had paid a total sum of £ 1,77,349, by way of interest which is more than twice the principal amount covered by the mortgage. The third mortgage was executed on October 21, 1935, under which a sum of £ 65,00 was borrowed by the mortgagor.

3. The appellant demanded the repayment of the amounts due under these mortgages but the mortgagor, so far as the mortgage of 1906 was concerned, repudiated the same on the ground that the entire transaction had been wiped off, by virtue of S. 10 of the Orissa Money-Lenders Act, 1939. (Orissa Act III of 1939) (hereinafter called the Money-Lenders Act), inasmuch as he had paid more than double the original principal amount, as admitted by the mortgagee.

4. The appellant, however, did not accept this repudiation and, in consequence, the company took legal proceedings in London and obtained an ex parte decree. But attempts to execute the decree in India did not succeed, as will be seen from the decision of the Calcutta High Court in Indian and General Investment Trust v. Raja of Khalikote, AIR 1952 Cal 508. The High Court held that the decree obtained by the appellant in London was not executable in India.

5. In the meanwhile, the mortgaged properties vested in the State of Orissa, under the Orissa Estates Abolition Act, 1951 (Act I of 1952) (hereinafter called the Abolition Act), on June 1, 1953, the virtue of the notification issued by the State Government under S. 3 thereof. Inasmuch as the appellant had not realised the dues under the two later mortgages, they filed a claim petition before the Claims Officer, under S. 18 of the Abolition Act.

6. Under S. 18 (1) (a) of the Abolition Act, every creditor, whose debt is secured by the mortgage of or is a charge on, any estate or part thereof, which has vested in the State Government under S. 3, has to file a claim within the period mentioned therein, to the Claims Officer, for the purpose of determining the amount of debt legally and justly payable to each such creditor in respect of his claim. Though the Claim included the third mortgage dated October 21, 1935, also, there does not appear to have been much of a serious contest about the liability under that mortgage and, there both the Claims Officer, as well as the High Court, on appeal, have substantially accepted the claim of the appellant. Therefore, the rights of the parties under that mortgage do not also arise for consideration, in this appeal.

7. So far as the mortgage of December 18, 1906, under which the mortgagor had borrowed a sum of £ 77,500,isconcerned in the claim petition the particulars of the properties mortgaged were all given in detail. The appellant had also admitted having received, by way of interest, in respect of this mortgage, a sum of £1,77,349-18-0 and he had given, in a statement, details of this receipt. The rate of interest payable under the mortgage was 6 per cent per annum.

8. It is also seen, from the said statement that the appellant has given credit to payment of a sum of £ 29,000 towards the principal amount and, as such, a balance of £ 48,500 remained due as principal. The appellant had claimed this amount, as well as the