A mortgage transaction in respect of unpaid purchase money between the vendor and the purchaser may be taken to be a loan, but merely because there has been a mortgage security given by the vendee in respect of unpaid purchase money wherein there is a stipulation of interest and there is a stipulation also of personal liability, it cannot be taken to be a case of loan as defined in the Orissa Moneylenders Act.

Judgement

MOHAPATRA, J. :- The plaintiffs suit is one for recovery of a sum of Rs.17,785-10-0 on the basis of a simple mortgage transaction, Ex.2, dated 22-6-1934. The mortgage bond, in suit, was executed in the following circumstances.

The plaintiff and two other co-sharers being the joint owners of certain lands and houses in the village of Sapuvapalli in Chatrapur Taluk executed a sale deed on 7-5-1929 in respect of the said properties for a sum of Rs.42,500 to late Paramananda Sahu and others; the vendees having died, the present defendants are their survivors. Out of the said sum of Rs.42,500, the plaintiffs share is Rs.14,168/10/8. The vendees in the said transaction paid Rs.1,166/10/8, and for the balance of unpaid purchase money of Rs.13,000, the alienees, on behalf of the joint family, executed a simple mortgage bond on that very day, that is on 7-5-1929, in favour of the plaintiff in respect of the properties sold in the aforesaid sale deed as well as a new item of property which has been described in Item No.2 of the plaint schedule. The family of vendees sold the said lands to some other persons as they received a heavier sum and executed a second simple mortgage bond, Ex.2, that is, the bond, in suit, on 22-6-1934, in renewal of the 1st mortgage transaction in respect of the lands which are fully described in the plaint schedules and which are other than those covered by the sale deed. It is to be noticed that the defendants, after execution of the first mortgage transaction, were making payments towards interest from time to time. On the date when the second mortgage transaction was executed, the interest having been paid off in full, they executed the mortgage bond, in suit, for the principal sum of Rs.13,000/-. The plaintiffs present suit is for enforcing the mortgage transaction dated 22-6-1934.

2. The defence is one seeking protection under S.10, Orissa Money-Lenders Act, that the plaintiff is not entitled to any sum beyond Rs.26,000/-taking into account all the payments made by them since the date of the first mortgage transaction, that is, 7-5-1929.

3. The learned Court below having accepted the defence contention has granted a decree in favour of the present plaintiff to the extent that the defendants are to pay Rs.10,519/12/- and costs of Rs.1,486/11/-, in all Rs.12,003/7-. The defts are to pay the amount in two equal annual instalments, the first instalment is payable 6 months hence and the second one year after the first instalment. In default of payment of the first instalment, however, plaintiff might apply to make the decree final.

4. The Court below has found that both Exs.1 and 2, the first and the second mortgage transactions constitute loans as defined in the Orissa Money-Lenders Act (sic) runs as follows:

"Loan means an advance whether of money or in kind on interest made by a money-lender and shall include a transaction on a document, bearing interest executed in respect of past liability and any transaction which in substance is a loan."

The Court below has construed the first document as a transaction in respect of past liability. As Ex.1, that is, the first mortgage bond, bears interest he has held it to be a loan. He observes:

"Ex.1 purports to be a mortgage bond. By no stretch of imagination it can be said that mortgage money is not a loan." In our opinion the learned Court below is wrong in construing the first mortgage (sic) is in respect of the unpaid purchase money due to the plaintiff on the basis of a deed of sale executed by the plaintiff on that very day, that is, 7-6-1929, in favour of the defendants predecessor-in-interest. It cannot, therefore, be transaction in respect of past liability. We are now, therefore, to examine if it can come as a loan, as being an advance whether of money or in kind on interest made by a money-lender, or a transaction which, in substance, is a loan. Exactly, a similar case in respect of unpaid purchase money came up before their Lordships of the Calcutta Hi