Muttiah V. Podisingho Appuhamy

Present: Fisher C J. and Akbar J.  1930

MUTTIAH v. PODISINGHO APPUHAMY.

306-D. C. Negombo, 2,975.

Money Lending Ordinance-Mortgage bond payable by instalments- Renewal of bond-Sums set off as principal and interest-Compound interest-Discretion of Court-Ordinance No. 8 of 1918, s . 2 (1) (a).

Where the parties to a mortgage bond, in cancelling it, entered into a new bond under which the debtor received payments in money in addition to sums set off on account of principal and interest due on the old bond,-

Held (in an action on the bond), that it was within the discretion of the Court whether it should grant relief under section 2 (1) (a) of the Money Lending Ordinance.

Held, further [per AKBAR J.], that the discretion was not taken away even where the transaction on the face of it appeared to violate the rule prohibiting compound interest.

APPEAL from a judgment of the District Judge of Negombo.

The plaintiff sued the defendant on a mortgage bond, in which the consideration is stated to be Rs. 15,000, for the recovery of a sum of Podisingho Rs. 16,812.50, which included interest on the sum borrowed at the rate of 15 per cent. The defendant moved for an accounting under the Money Lending Ordinance, No. 2 of 1918, s. 2 (1) (a), and  commissioner was appointed by Court. The learned District Judge gave judgment in favour of the plaintiff for the full amount of his claim.

H. V. Perera (with Weerasooria), for defendant, appellant.

Croos Dabrera (with H. K. P. de Silva), for plaintiff, respondent.

February 13, 1930. FISHER C.J.-

This is an appeal from a -judgment in favour of the plaintiff in an action brought by him to recover the sum of Rs. 15,000 and interest due under a mortgage bond. The defendant invoke the jurisdiction conferred by section 2 of the Money Lending Ordinance, No. 2 of 1918,[1 Leg. En. II p. 582. ] to reopen money lending transactions where, " there is evidence which satisfies the Court-that the return to be received by the creditor over and above what was actually lent . . . . . is excessive, and that the transaction was harsh and unconscionable. " The only issue admitted to be tried in the District Court was " what sum is fairly due to the plaintiff on account of the transactions that have led up to the bond sued upon? " and after a very careful examination and consideration of all the facts the learned District Judge held that the amount due by the defendant to. the plaintiff was the amount sued for. All the facts are fully set out in my brother Akbar's judgment, which I have had the advantage of reading, and I agree that the conclusion to which the learned District Judge came was right.

It was contended before us that the sum claimed in the action was partly composed of compound interest and that therefore the amount for which the defendant was liable must be reduced to that extent at all events, and Mudiyanse v. Vander Poorten [2 23 N. L. R. 342.] was cited in support of that contention. There is certainly no provision in the mortgage bond on which the claim is based which can be construed as an agreement to pay compound interest, and it cannot therefore be impeached on that ground. But for the purposes of considering the question of whether section 2 of the Money Lending Ordinance should be applied a Court is entitled to look at the origin and composition of all sums comprising the capital made payable by the document sued upon, and when that is done in this case the result is that the sum claimed by the plaintiff is somewhat less than the

total amount advanced by him with interest at 15 per cent. I do 1930. not think that is an excessive return within the meaning of section 2  of the Money Lending Ordinance under the circumstances.

The appeal must be dismissed with costs.

AKBAR J.-

The plaintiff is a Chetty money lender who sued the defendant on a mortgage bond (in which the consideration is stated to be Rs. 15,000) for a

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