JAGANMOHAN REDDY,J. -
(1.) This is an appeal and cross appeal from an award of the Jagirdars Debt Settlement Board, dated 31-3-1956, in the matter of Vinayak Rao, Jagirdar, who filed an application under Section 11 of the Jagirdars Debt Settlement Act, XII of 1952 (hereinafter called "the Act"). The Board after giving notices to the creditors, and after recording the evidence, passed the Award whereby it scaled down the liabilities of the debtor to Rs. 31,776-5-11, which was further scaled down to Rs. 19,065/- on being reduced by 40 per cent. The paying capacity of the debtor was also fixed at Rs. 21,214/-. Appeal No. 136/1 of 1956 is by the debtor, while Appeal No. 161/1 of 1956 is by the creditor, Mangilal.
(2.) In the first of these appeals, the learned advocate for the appellant (debtor) Mr. Tuljapurkar, contends inter alia, that the interest allowed to the creditor Mangilal, by way of rent, which was decreed and regarding which appeals, were pending at the time when the application was made, ought not to be allowed for the reason that no accounts were sent to the appellant under the Money-lenders Act. He also contends that under Section 9 of the Act, the suit regarding the debt is liable to be dismissed for non-compliance of the provisions of Money-Lenders Act.
(3.) Both these points, in our view, are absolutely untenable. The debt in question was one which was contracted in Khurdad, 1347 F., while the Money-Lenders Regulation came two months afterwards, the Act itself being passed two years thereafter. In the circumstances the provisions of the Money-Lenders Act relating to the obtaining of money-lenders "? licence under the Regulation or under the Act before the amounts could be lent could not have arisen-It is contended on the authority of Tala Anjaiah v. Rukma Bai, Deccan Law Reports Vol. XXXVI 629 that the procedural portions of the Money-Lenders Act relating to the furnishing of annual accounts of interest and principal to the debtor are also applicable to debts incurred prior to the Act. This decision has no relevance on the facts of the instant case, in as much as the rent decree is one which is not linked up with the liability to pay interest, In fact, the decree which the mortgagee obtained against the appellant was in respect of a suit filed by him on 27-4-1950, though only for the principal amount. Prior to this, he had filed a suit to recover rent. That decree, it is sought to be contended by the learned Advocate, is in fact a decree for interest, and, since the provisions of the Money-Lenders Act are not complied with, in that the statements of accounts were not sent to him annually, the decree cannot be binding upon him. The learned Advocate for the respondent, on the other hand, contends that under the Act even the provision relating to the furnishing of the accounts does not apply to debts Contracted prior to the Regulation or the Act. Secondly, he contends that under the terms of the mortgage-deed, interest at 10 annas per cent, per month is payable, and that possession of the house is to be given by the mortgagor to the mortgagee, the mortgagee having the right to lease out the premises, and from out of the amounts received from rent, to appropriate towards interest. But, if the amounts received were less than the interest at 10 annas per cent, per month, the mortgagor would be liable to pay the balance. Similarly, if the amounts received from rent are more, the excess is to be appropriated towards the principal. Finally, if for any reason the house has not been given on rent to anybody, the mortgagor will be liable to pay the whole of the interest. As already pointed out, the mortgagee leased out the premises on the same day to the mortgagor, one of the terms of which specifically provided that if rent is not paid, or if the land-lord wishes to obtain possession of the said premises, he may do so by giving one month "?s notice, and the tenant has to vacate. It was further provided that if any rent falls due, the mortgagee has the right to file a suit to recover the same, On a consideration of the terms in the mortgage-deed as well as in the lease-deed, it becomes abundantly clear that the lease of the house to the mortgagor is a pure and simple lease transaction. The amount derived from this lease is to be appropriated towards interest, though the payment of interest is not entirely dependent upon the lease amount. It is not as if the mortgagor lets the mortgagee in possession of the premises mortgaged to him in lieu of interest, and is only liable to pay the principal. The decree for rent is certainly not a decree for interest. Since the decree obtained by the mortgagee is only for the principal amount, no question of disallowing the interest will arise. In these circumstances, there is no substance in the contentions of the learned advocate for the appellant. The appeal has no force, and is accordingly dismissed, but, in the circumstances, without costs.;