In a mortgage suit, where interest is payable at monthly rests, default in payment results in interest sinking into principal, and the aggregate amount (principal plus interest) is treated as principal for the next month, with interest on the composite sum.

MANISANA, J. :- This is an appeal from the preliminary decree dated 27-5-86 passed by the Assistant District Judge, Jorhat in Title Suit No. 31 of 1981. The plaintiff Bank instituted the suit for recovery of Rupees 86,996.83 by sale of mortgaged properties. The facts of the case, in brief, are thus. The defendant Mayeeduz -aman Ahmed took a loan of Rs. 31,000/- from the plaintiff-Bank. The payment of the loan was secured by a demand promissory note and a mortgage by deposit of title-deeds. The defendant failed to pay the amount due and, therefore, the plaintiff-Bank ascertained a sum of Rupees 59,669.61 as on 28-3-78 and initiated a proceeding for recovery of the same before the Bakijai Officer against the defendant under the Assam Loan Recovery Act, 1976. The Bakijai Officer returned the certificate on the ground that the Bakijai Officer had no jurisdiction to entertain the claim. Thereafter, the plaintiff-Bank instituted the suit claiming Rs. 86,996.83 which includes interest on Rs. 56,669.61. The trial Court partly decreed the suit declaring an amount of Rs. 59,669,61 to be paid by the said defendant to the plaintiff-Bank. The decree also orders the defendant to pay the plaintiff-Bank the amount so declared with interest at 16% per annum from the date of the suit till the date of decree within six months from the date of decree failing which the amount so declared would carry interest at 8% per annum from the date of decree till its realisation. Hence this appeal by the plaintiff-Bank. The defen-dant had neither filed appeal nor cross-objection.

2. Mr. B. K. Goswami, learned Counsel for the appellant, has submitted that the trial Court should have declared Rs. 86,996.83 claimed by the plaintiff-Bank as principal amount found due on the mortgage. Mr. A. K. Phukan, learned Counsel for the respondent, has contended that under S. 34 or Order 34, Rule 11, C.P.C., the plaintiff is entitled to claim interest on the principal amount and not on the total amount which includes interest on the date of the suit. But the sum of Rs. 86,996.83 is aggregate of the principal amount and interest and, therefore, Rs. 86,996.83 cannot be declared as the principal amount due on mortgage. Mr. Phukan has referred us to the following decisions to support his contention.

3. In M. V. Mahalinga Aiyar v. Union Bank, AIR 1943 Mad 216, it has been held in a suit based on promissory notes that, under Section 34, the interest awardable from the date of suit to the date of the decree must be only upon the principal sum due and not on the suit amount which includes interest. In I. K. Sohan Singh v. S.B.I., AIR 1964 Punj 123, the suit was for recovery of Rs. 34,000/- (25,000/- principal + 9000/- interest) with interest. In that case, the Punjab High Court has held that Sec. 34 does not provide for payment of any interest on any amount which consists of interest prior to the date of the suit. The future interest shall be on Rs. 9,000/-. In I. K. Merchants v. Indra Prakash, AIR 1973 Cal 306, the Calcutta High Court has, in a suit based on promissory note, held that, before the Amendment Act of 1956, the Court had power to award interest on principal and other sum on the decree. But after the amendment, the Court had power to award interest on the decree on the principal amount only and not on the aggregate sum.

4. The above decisions are of no assist-ance as those cases were neither suit for sale of property mortgaged nor interest was payable at monthly nor quarterly rests. In the case on hand, under the mortgage-deed the interest was payable at monthly rests. At this stage, it will be helpful to refer to a decision of the Privy Council reported as Muthu v. Meenakshisundaram, AIR 1920 PC 35. In that case, the Privy Council has held that, when default is once made on the occasion of the first rest, the debtor thenceforth pays interest not merely on the original debt he owed, but upon a composite debt including the original debt plus the added interest. I