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Andhra Pradesh High Court
Judges : K.MADHAVA REDDY, RAMANUJULU NAIDU
Chilamkuri Gouri Sankar Rao - Appellant
Versus
Bhurugumalla Venkatappayya Sons - Respondent
Decided On : 04-23-82
MORTGAGE - PRELIMINARY DECREE - INTEREST - RATE OF INTEREST - COMPOUND INTEREST AT 12% PER ANNUM WITH MONTHLY RESTS STIPULATED UNDER MORTGAGE DEED - WHETHER EXCESSIVE AND PENAL - USURIOUS LOANS ACT, 1918 - APPLICABILITY - O. 34 R. 11 C. P. C. - INTERPRETATION - SUBSEQUENT INTEREST - WHETHER PAYABLE ON PRINCIPAL SUM OF MONEY BORROWED AS WELL AS ON INTEREST ACCRUED THEREON UP TO DATE OF REDEMPTION.
Fact of the Case:
Plaintiff filed a suit for recovery of a sum of Rs. 84,736 on the foot of a deed of mortgage, dt. 15-10-1970 executed by late chilamkuri venkata Kotirathnam. Both on behalf of himself and as guardian of his son impleaded as the 1st defendant in the suit who was then a minor. For a sum of Rs. 49,000 by enforcing the mortgage against the hypothecated property a terraced building situate at Guntur town as also against the other properties of the 1st defendant and of late venkata kotirthnam in the hands of all the defendants defendants 1 and 4 preferred the above appeal.
Finding of the Court:
1. The 1st defendant did not even choose to examine himself in support of the plea. 2. Ex. A-1 was true valid and binding on the 1st defendant and that the rate of interest stipulated under Ex. A-1 was neither penal nor usurious 3. Compound interest at the rate of 12% per annum with monthly rests stipulated under Ex. A-1 is excessive and compound interest at the rate of 12% per annum on the principal sum of money borrowed under Ex. A-1 from the date of execution of Ex. A-1 up to the date of the suit and simple interest at the rate of 12% per annum on the principal sum of money from the date of the suit till the date of redemption as fixed by the Court with subsequent interest at the rate of 6% per annum on the principal sum of money from the date of redemption till the date of realisation would be reasonable.
Issues: 1. Whether there was division in status between the 1st defendant and his father in the year 1967 itself and that his father had no right to mortgage his share of the hypothecated property. 2. Whether Ex. A-1 the deed of mortgage was truly executed and also supported by consideration as detailed therein. 3. To what extent the various items making up the total amount of consideration of Rs. 49,000 recited in Ex. A-1 are binding on the 1st defendant who was a minor at the time of execution of Ex. A-1 and on whose behalf also Ex. A-1 was executed by venkata Kotirathnam. 4. Whether the rate of interest stipulated under Ex. A-1 was usurious and that the appellants were entitled to the benefits of the Usurious Loans Act, 1918. 5. Whether subsequent interest would be entitled to the payment of would be entitled to the payment of subsequent interest not only on the principal sum of money borrowed under Ex. A-1 but also on the amount of interest accrued thereon up to the date of redemption
Ratio Decidendi: 1. The 1st defendant did not let in any evidence on his behalf in support of his plea of division in status with his father in the year 1967. 2. Ex. A-1 was truly executed and also supported by consideration as detailed therein. 3. The 1st defendant is bound to discharge half of the principal sum of money Borrowed under Ex. A-1 minus Rs. 3,100 together with interest as allowed by us. 4. Compound interest at the rate of 12% per annum with monthly rests stipulated under Ex. A-1 is excessive and compound interest at the rate of 12% per annum on the principal sum of money borrowed under Ex. A-1 from the date of execution of Ex. A-1 up to the date of the suit and simple interest at the rate of 12% per annum on the principal sum of money from the date of the suit till the date of redemption as fixed by the Court with subsequent interest at the rate of 6% per annum on the principal sum of money from the date of redemption till the date of realisation would be reasonable. 5. Subsequent interest would be payable on the principal sum of money borrowed under Ex. A-1 but not on the amount of interest accrued thereon up to the date of redemption.
Final Decision: Appeal suit allowed in part.
( 1 ) AGAINST the preliminary decree dt. 22-11-1978 passed in O. S. No. 20 of 1975 on the file of the Court of the subordinate Judge Guntur, instituted by the 1st respondent against defendants 1 to 7 thereto for recovery of a sum of Rupees 84,736 on the foot of a deed of mortgage, dt. 15-10-1970 executed by late chilamkuri venkata Kotirathnam. Both on behalf of himself and as guardian of his son impleaded as the 1st defendant in the suit who was then a minor. For a sum of Rs. 49,000 by enforcing the mortgage against the hypothecated property a terraced building situate at Guntur town as also against the other properties of the 1st defendant and of late venkata kotirthnam in the hands of all the defendants defendants 1 and 4 preferred the above appeal.
( 2 ) DEFENDANTS 2 and 3 are the divided sons while defendants 5 to 7 are the daughters of late chilamkuri venkata Kotirathnam the 4th defendant is his widow.
( 3 ) THE case of the plaintiff is that defendants 1 to 3 and their father. Late venkata kotirathnam originally constituted a Hindu joint family that defendants 2 and 3 became divided from the Joint family that late venkata Kotirathnam and the 1st defendant. However continued as members of a Joint family with venkata kotirathnam as manager of the joint family that venkata Kotirathnam borrowed a sum of Rs. 49,000 from him for discharge of the antecedent debts contacted by the family and for meeting other expenses of the family that late venkata kotirathnam executed a registered deed of mortgage on 15-10-1970 both on his behalf and as father and guardian of the 1st defendant who was then a minor mortgaging the terraced building that compound interest at 12% per annum with monthly rests was stipulated under the deed of mortgage. That venkata Kotirathnam died on 10-8-1974 survived by the defendants. That his share of the property devolved on all the defendants that as the mortgage debt was not discharged he got registered notices issued to all the defendants calling upon them to discharge the mortgage that the 1st defendant caused a reply to be sent to him denying the truth and validity of the mortgage and disowning and liability under Ex. A-1 that defendants 4 to 7 refused to receive the notices and that the 3rd defendant did not choose to send any reply to the notice received by him.
( 4 ) THE suit was resisted by all the defendants. In the written statement filled by the 1st defendant it was averred that defendants 2 and 3 went out of the joint family in the years 1964 and 1967 respectively relinquishing their interests in the property of the joint family, that in the year 1967 he too got himself divided from the 1st defendant that late venkata Kotirathnam had no right to Act as manger of the alleged joint family that Ex. A-1 executed by him on his behalf without obtaining prior permission of the District Court Guntur as required under the provisions of the Hindu Minority and Guardianship Act was unenforceable and not binding on him that the alleged borrowing under Ex. A-1 was not true and that in any event. The consideration received under Ex. A-1 was not applied in discharge of any binding antecedent debts. Incurred and not spent to meet the necessary expenses of the family.
( 5 ) IN the written statement filed by defendants 2 and 3. It was averred that they were divided from the joint family in the years 1964 and 1967 relinquishing their rights in the properties of the joint family that they had nothing to do with the 1st defendant that they were not aware of execution of Ex. A-1 and that in any event the rate of interest stipulated under Ex. A-1 was highly excessive penal and usurious.
( 6 ) AFTER framing appropriate issues the learned subordinate Judge found that no evidence whatsoever was let in on behalf of the 1st defendant in support of his plea of division in status with his father in the year 1967 that the 1st defendant did not even choose to examine himself in support of his plea that Ex. A-1
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