Judgement

Consolidated Cross-appeals, by special leave, from a decree of the High Court (April 9, 1930) affirming a decree of the Subordinate Judge of Bhagalpur (June 20, 1927).

The suit was brought by mortgagees claiming to enforce their mortgage by sale of the mortgaged lands, situated in the Sonthal Parganas, the amount alleged to be owing being Rs.723, 538-10-8 for principal and interest up to the date of the institution of the suit, to which they prayed should be added future interest at the mortgage rate till the date of realization.

The Subordinate Judge, acting in accordance with the provisions of s. 6 of the Sonthal Parganas Settlement Regulation, 1872, refused to allow interest beyond a sum equal to the principal, after deducting therefrom payments made by the mortgagor from time to time. He made a preliminary mortgage decree for sale, finding the amount due to be Rs.402, 595-6-9 with Rs. 10,067-6-3 costs, making a total of Rs.412, 662-13-0. In default of payment within six months the property was to be sold. He refused to allow any interest pendente lite, but he allowed interest at the rate of 6 per cent. per annum on the decretal amount after the expiration of the six months period of grace until the realization of the decretal amount.

On appeal the High Court (Jwala Prasad and Ross JJ.) affirmed the decree of the Subordinate Judge.

Special leave to appeal to His Majesty in Council was limited to " questions of interest after the date of the institution of the suit," the mortgagees contending that interest pendente lite should have been allowed, the mortgagor that interest on the decretal amount should not have been granted.

1935. Nov. 11, 12. Dunne K.C. and Pringle for the appellant (defendant No.1). These two appeals raise questions upon the construction of s. 6 of the Sonthal Parganas Settlement Regulation, 1872. The first is whether the Court, having given the interest on the mortgage at the full amount of the original principal, can afterwards give interest upon the decretal amount. Are the plaintiffs (mortgagees) precluded from getting anything more than double the actual cash advance in view of s. 6 of the Regulation? [Sect. 6 (a) and (b) read.] In Maha Prasad v. Ramani Mohan Singh (( 1913) L. R. 41 I.

A. 197.) the Board held that they were bound to abide by the rules of usury in this Act. The question in this appeal is whether the plaintiffs are entitled to interest from the institution of the suit up to the date fixed for repayment in the decree. In our cross-appeal we complain that the 6 per cent, interest on the decreed sum should not have been allowed. The High Court decided against Rs. The first point is that interest on the decreed sum cannot be granted under the terms of s.6 (b). The decree that has been granted was for principal and interest, and it has granted the full amount of interest equaling the original advance, and therefore, once that position has been reached, no further interest can be decreed at all under the section. Secondly, the interest that has been granted at 6 per cent, on the aggregate amount is in itself interest upon interest, because in the decree itself there is interest, and it falls within the terms of the section which forbid compound interest arising from any intermediate adjustment. This decree is within the terms of that section an intermediate adjustment. That section is a statutory bar to any Court having jurisdiction in the Sonthal Parganas from giving interest except according to the terms of the section. The statute says in terms that an "intermediate adjustment" means " any adjustment of account which is not final and includes the renewal of an existing claim by….decree."

The plaintiffs say that s. 34 of the Code of Civil Procedure applies because under that section there is discretion. There are two provisions in the Code of Civil Procedure which it is suggested would apply in this case, s. 34 and r. 34, sub-r. 4 (1) Sect. 34, with the discretionary power to a Co