VENKATARAMANASWAMY PERMANENT BHANDAR LTD Vs. FATIMA BI

JUDGEMENT

(1.) This appeal arises out of a suit brought by the appellant for recovery of money due on a mortgage bond dated 4-4-1958, effected by the husband of respondent No.1 and father of respondents 2 to 6.

(2.) The bond provided ior the payment of interest at 6-1/4 per cent per annum and further stipulated that if a default was made in the payment of the prescribed instalments, the rate of interest would be 9%. There is a further stipulation that the rate of interest could be charged at a penal rate of 12% on failure to pay the recurring deposit.

(3.) The question for consideration in this appeal is whether the enhanced rate of interest at 9% payable on default is penal or excessive. The trial court has awarded interest for the whole period at 6% till the date of realisation, whereas the appellate court has awarded at 6-1/4 per cent from 1-7-1959 to 15-4-1964 and also for the period from the date of the suit till the date of the decree with future interest at the rate of 6 per cent.