Sir Shadi Lal:-

These consolidated appeals arise out of a suit brought to recover money on a mortgage by a sale of the mortgaged property. The mortgage-deed was executed on 13th July 1911, in favour of one Nagabhushanam, the predecessor in interest of the plaintiff, by a Hindu widow Seshamma, who has inherited her husband's property, for a widow's estate. The trial Judge dismissed the suit, but on appeal the High Court at Madras has decreed the claim, but has disallowed compound interest on the ground that the stipulation for the payment of compound interest at an enhanced rate was in the nature of a penalty. Both the parties have appealed to His Majesty in Council, and after considering the arguments advanced on their behalf, their Lordships are of opinion that there is no substance in either of the appeals. The relevant facts may be shortly stated. The indebtedness of the widow Seshamma commenced in January 1883, when she entered into a compromise with the mortgagee in order to settle his claim against her husband. She promised to pay Rs. 5,000 in five years with interest thereon at the rate of 10 annas per cent. per mensem, and hypothecated a village as security for the principal