1961    Present : Weerasooriya, J., and L. B. de Silva, J.

MARIKAR, Appellant, and SAKEENA UMMA, Respondent

S. C. 53-D. C. Kandy, 2370/M B

Money Lending Ordinance (Cap. 67)-Section 2 (1) (a)-Re-opening of a money-lending transaction-Admissibility of evidence of a novation-Mortgage bond-Evidence to contradict terms as to amount of loan-Admissibility- Evidence Ordinance, s. 92, proviso (1).

Under section 2 (1) (a) of the Money Lending Ordinance, a money-lending transaction may be re-opened to show that it was in reality the novation of a previous debt existing between the lender and a third party and that the transaction was harsh and unconscionable.

Under proviso (1) to section 92 of the Evidence Ordinance, evidence is admis­sible to contradict, on the basis of a mistake of fact, the terms of a mortgage bond in regard to the amount of the loan.

APPEAL from a judgment of the District Court, Kandy.

H. W. Jayewardene, Q. C., with S. Sharvananda and L. C. Seneviratne, for plaintiff-appellant.

Vernon Jonklaas, for defendant-respondent.

Cur. adv. vult.

April 27, 1961.   WEERASOORIYA, J.-

The plaintiff-appellant filed this action against the defendant-respondent for the recovery of a sum of Rs. 10,300/- being the balance due on a mortgage bond No. 7136 dated the 10th January, 1955, marked P7. The bond was executed on the basis of a loan of Rs. 6,500/- from the plaintiff to the defendant. Although there was no provision for the payment of interest, one of the conditions of the bond was that the defendant should deliver to the plaintiff, during a period commencing on the date of the bond and terminating on the 31st December, 1955, a minimum quantity of 144,000 1b. of green tea leaf payment for which was to be made by the plaintiff at the market price prevailing at the time of delivery less four cents per pound to be kept back by the plaintiff as his "commission ". The tea leaf was the produce of an extent of some 76 acres of Weralugollehena Estate belonging to the defendant and hypothecated under the bond. On the plaintiff's own valuation the estate was worth about one and a half lakhs of rupees. The full " commis­sion" payable to plaintiff came to Rs. 5,760, and the bond secured the payment of this amount as well as the loan of Rs. 6,500/, or a total of Rs. 12,260/-. Under another condition of the bond the plaintiff was at liberty to deduct from the amount due to the defendant for the tea leaf supplied a sum of Rs. 500 per month in liquidation of the loan.

According to the plaintiff, 12,000 1bs. of tea leaf were supplied by the defendant in January, and a like quantity in February, 1955, and no tea leaf was supplied thereafter. Out of the amount realised from the quantity of leaf supplied the plaintiff retained a sum of Rs. 960/- as "commission" and Rs. 1,000/- in liquidation of the principal; and the Rs. 10,300/- sued for represented the balance of the sum of Rs. 12.260/-secured by the bond.

That the Rs. 6,500/- referred to in the bond as a loan from the plaintiff to the defendant was not actually lent is common ground. The plaintiff's case is that this sum was due to him from the defendant's husband Abdul Cader on an earlier transaction between Cader and the plaintiff and to secure the payment of which the defendant executed the bond. The defendant admitted the execution of P7 but her main defence was that she accepted the plaintiff's representation that the Rs. 6,500/- was the balance due from her husband to the plaintiff on the earlier transaction, that no such amount was in fact due and she was therefore not liable in any sum on the bond, and in terms of the Money Lending Ordinance (Cap. 67) she asked for a re-opening of the transactions which the plaintiff tad with her as well as her husband.

Despite the plaintiff's unctious assertion at the trial that being a Muslim he did not charge interest on his loans, the trial Judge rightly held that