PARAMESWARAN PILLAI VASUDEVAN PILLAI Vs. JACOB PERUMAL
LAWS(KER)-1955-11-11
HIGH COURT OF KERALA
Decided on November 02,1955

PARAMESWARAN PILLAI VASUDEVAN PILLAI Appellant
VERSUS
JACOB PERUMAL Respondents

JUDGEMENT

- (1.) THIS appeal arises out of a suit for recovery of money due under a simple mortgage. The deed of mortgage is Ext. A dated 7. 12. 1107 and it was executed by defendants 1 to 5 for a consideration of Rs. 2,850/- and charging the plaint schedule items. The executees under this document assigned their rights under it in favour of the 1st plaintiff, the deed of assignment being Ext. B dated 6. 5. 1118. The mortgage deed Ext. A provided for payment of interest at the rate of 9 per cent per annum and it was stipulated that such interest should be paid in paddy in the month of Medom of every year, the basis of commutation being 2 paras of paddy for one rupee. Provision was also made for payment of interest on the arrears of interest. According to the plaintiff the whole of the interest subsequent to the month of Medom 1109, is in arrears, and out of the interest due up to Medom 1109, a balance of 146 paras of paddy is also due. The suit is for the recovery of the principal amount together with the interest that has accumulated up to the date of the suit from the defendants and the suit properties. The 1st plaintiff has agreed that the decree granting the reliefs claimed in the plaint may be passed in favour of the 2nd plaintiff who is stated to be a near relation of the 1st plaintiff. The suit was resisted by defendants 1 to 3. Their main contention was that nothing more than the principal amount of Rs. 2,850 plus a moiety of the same, could be claimed by the plaintiffs and decreed in their favour as the total amount due under Ext. A up to the date of the suit. It was also contended that the interest payable in paddy has to be valued at the rate fixed in Ext. A itself as agreed to by the parties to the document. The 3rd defendant had special plea that Ext. A is not supported by consideration and necessity binding on his tarwad, but he does not appear to have been serious about that contention, for it is seen that no issue was raised on this particular plea. It may also be stated the 2nd plaintiff, who gave evidence as Pw. 1 in proof of the consideration for Ext. A and who produced the receipts Exts. C and D to substantiate his own testimony, was not cross-examined at all by the defendants. It may also be pointed out that on the question of consideration and necessity for Ext. A no ground is raised in this appeal memorandum. The several grounds raised in this appeal are directed against the lower court's decree upholding the plaint claim in toto after repelling the objections raised by the defendants to the claim made in the plaint on account of interest.
(2.) IT is clear from Ext. A that the transaction between the parties was a loan of money on the secuirty of the suit properties. Interest was stipulated to be paid at 9 per cent per annum. The provision for the payment of such interest in the shape of paddy does not affect the essential nature of the transaction. The accounts given in the plaint also show that the transaction was treated as a loan of money. Accordingly, interest for each year has been calculated at 9 per cent on the principal amount, and it is the amount of such interest that has been commuted into paddy. In this manner interest on the principal amount has been calculated up to 23. 5. 1112. Interest thereafter has been calculated only at 6 per cent, obviously under the provisions of the Travancore Agriculturists' Relief Act (Act III of 1112) which had fixed the upper limit of interest on money loans repayable by agriculturists at 6 per cent. The limitation of interest by the Travancore Debt relief Act of the year 1116 has also been given effect to in the calculation made in the plaint, for it is seen that interest from 1. 2. 1116 onwards has been calculated only at 4 per cent per annum. These facts also go to confirm the view that the transaction in question was only a loan of money. The present suit is for recovery of the principal amount of the loan together with the interest due under Ext. A. The restrictions imposed by S. 31 of the Travancore Civil Procedure Code in the matter of decreeing interest in suits for money, were in force when the present suit was instituted on 18. 6. 1119. The Travancore Civil Procedure Code was replaced by the Indian Code only after a notification to that effect was issued under sub-s. 2 of S. 1 of Act II of 1951 (Central ). The position taken up by the appellants is that the provisions of S. 31 of the Travancore Code which were in force at the time of the institution of the present suit, must regulate the passing of the decree in this case, Sub-s. 1 of S. 31 is as follows: "in suits for money, no Court shall in respect of the period antecedent to the institution of the suit allow in its decree a higher rate of interest than 12 per cent per annum and the amount adjudged as interest for such period shall of exceed one-half of the principal amount sued for". The contention based on this provision did not find favour with the lower court. That court appears to have taken the view that after the Indian Civil Procedure Code had been brought into force in this state, S. 31 of the Travancore Code could not have any binding force and that in the matter of decreeing interest on money claims the relevant provision of the indian Code which was in force on the date of the decree should be the proper guide. Since S. 34 of the Indian Code does not contain restrictions similar to those contained in S. 31 of the Travancore Code in the matter of awarding interest, the lower court thought that there is no legal impediment in the way of awarding the full amount claimed as interest in the plaint. This view is not correct. It is a settled principle of law that the rights of the parties to an action are to be governed by the law in force when the action was commenced and that a change in the law would not affect pending actions, unless there is a clear provision to that effect in the new enactment. This principle has been recognised in Alleyrasul v. Balkrishan (AIR 1934 Allahabad 709), Daivanayaka Reddiyar v. Renukambal Ammal (ILR 50 Madras 857), Ram Singha v. Shankar Daval (ILR 50 Allahabad 965), Sythet Loan and Banking Co. Ltd. , v. Ahmed Majtoba (AIR 1946 Calcutta 337) and Bhagavathy Pillai v. Sankara Pillai (1953 KLT 557 ). To the same effect is the provision contained in S. 6 of the general Clauses Act (Central) which is the same as S. 4 of Act VII of 1125 of travancore-Cochin. There it is stated that unless a different intention appears, the repeal of an enactment shall not affect any investigation, legal proceeding, or remedy in respect of any right acquired or accrued under the repealed enactment and any such investigation, legal proceeding or remedy, may be instituted, continued and enforced as if the repealing Act had not been passed. In the present case the repealing Act is Act II of 1951 (Central) by which the Travancore Civil Procedure Code was replaced by the Indian Code (Act v of 1908) with effect from 1. 4. 1951. Not only is there nothing in Act II of 1951 to indicate that the Indian Civil Procedure Code, which was brought into force in this State on 1. 4. 1951, was intended to affect the rights already accrued and proceedings intitiated under the Travancore Civil Procedure Code, but all such rights and proceedings have been expressly saved by S. 20 of Act II of 1951. It is enough to quote sub-s. 1 of S. 20 which runs as follows: "if, immediately before the date on which the said code comes into force in any Part B State, there is in force in that State any law corresponding to the said Code, that law shall on that date stand repealed, provided that the repeal shall not affect (a) the previous operation of any law so repealed or anything duly done or suffered thereunder, or (b) any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed, or (c) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued, or enforced, and any such penalty, forfeiture or punishment may be imposed as if this Act had not been passed". This section is a virtual reproduction of S. 6 of the general Clauses Act. The above provision makes it abundantly clear that the rights which the defendants in this case had acquired under S. 31 of the travancore Civil Procedure Code remain unaffected by the replacement of that code by the Indian Code on 1. 4. 1951 and that the disposal of the suit which had been instituted against them several years prior to that date, had to be in conformity with the limitations imposed by S. 31 of the Travancore Civil procedure Code. Under sub-s. 1 of that section the court could not decree by way of interest up to the date of the suit anything in excess of a moiety of the principal sum. Such an immunity from liability for any excess amount by way of interest, was undoubtedly a valuable right which the defendants had acquired under S. 31. The position that immunity or exemption from the power of another comes within the different classes of rights known to law, has been explained and emphasised by a Full Bench of this Court in Vareed v. Gopal Bai Patel (1954 klt 188) at 1941. With the institution of the suit in the year 1119 the aforesaid right by way of immunity in favour of the defendants had become crystallised and there is no warrant for assuming that this immunity has been taken away and that the plaintiff's rights have been enlarged as a consequence of the subsequent replacement of the Travancore Civil Procedure Code by the indian Code. This suit which was commenced under the Travancore Civil Procedure code had to be decided in accordance with the Travancore Code itself and full effect had to be given to limitation imposed by S. 31 of that Code and we hold accordingly.
(3.) ON behalf of the plaintiffs-respondents an attempt is made to take Ext. A outside the ambit of S. 31 of the Travancore Civil Procedure code. It is argued that the agreement in Ext. A is to treat the amount of interest for each year as independent of the original principal sum so that the amounts of interest may be treated as fresh loans carrying further interest. No doubt, there is a provision in Ext. A that the paddy equivalent of the amount of interest will be paid in the month of Medom every year and in default the same will carry further interest. But this provision by itself does not mean that the interest for each year has to be treated as fresh loan. Further it is seen from the concluding portion of the agreement in Ext. A that the defaulted interest was to be added to the principal sum with liberty to the creditors to recover the interest separately or the principal together with interest. This provision clearly indicates that the amount to be claimed by way of interest was the interest due on the principal sum advanced under Ext. A. The mode of calculation made in the plaint is also in conformity with this position. If the agreement was to treat the interest for each year as fresh loans, the amounts under these categories would not have been treated as debts coming within the ambit of the Debt Relief Act. But, as a matter of fact, it is seen that interest on such amounts for the period subsequent to the date of the Debt relief Act has been calculated only at 4 per cent per annum, thereby indicating that the amount is treated only as part of the original loan. In this view of the matter no significance can be attached to the calculation of interest on interest in the plaint account or to the stipulation to that effect in Ext. A. Under these circumstances the claim in the suit has to be deemed to be a claim for recovery of the principal sum of Rs. 2,850 together with interest on the same as stipulated in Ext. A. It follows therefore that the limitation imposed by S. 31 of the Travancore Civil Procedure Code must come into play in fixing the maximum amount awardable by way of such interest up to the date of the suit. This position is unaffected by the provision in Ext. A to pay interest in the shape of paddy because the commutation rate has been fixed in Ext. A itself as per the agreement of the parties, the rate being 2 paras of paddy per rupee. As already pointed out, the rate of interest stipulated in Ext. A is 9 per cent per annum. It is conceded in the plaint itself that this rate has to be reduced to 6 per cent and 4 per cent respectively under the provisions of the Travancore Agriculturists' Relief Act (Act III of 1112) and the Travancore Debt Relief Act (Acts II and III of 1116 ). In the plaint accounts interest has been calculated at these rates only. Even by calculating interest in terms of money at these rates, it is seen that the accumulated amount of interest up to the date of the suit is very much higher than a moiety of the principal sum of Rs. 2,850. Hence under S. 31 of the travancore Civil Procedure Code, interest upto that date has to be limited to a moiety of the principal sum. The plaint amount for which a decree can be given in this case will therefore be Rs. 2,850 plus Rs. 1,425 i. e. , Rs. 4,275 only. Regarding interest subsequent to the date of suit, the direction in the lower court's decree is that the principal sum of Rs. 2,850 will carry interest at 9 per cent from the date of suit to the date of decree and that future interest on the aggregate amount decreed will be at 6 per cent. The plaintiffs have submitted to these directions in the decree. But since this is a debt coming within the ambit of the Debt Relief Act, interest subsequent to the date of that Act has to be limited to 4 per cent as per S. 12 of that Act.;


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