Decided on June 20,1967

SESHA IYER Appellant


- (1.) This Second Appeal arises out of a suit filed by the appellant herein for enforcement of a mortgage Ext. P-1 dated 15 6 50 executed by defendants 1 to 8 (respondents herein) in favour of the plaintiff's predecessor-in-interest one Gopalan Nair for Rs. 2,000/-. 13 items of properties were comprised in the mortgage and of these item 1 was usufructuarily mortgaged and items 2 to 13 were given on simple mortgage. The mortgage-deed contained a covenant for personal payment and also created a right in the mortgagee to bring all the mortgaged items to sale for realisation of his mortgage money. Item 1 was outstanding on lease and the mortgagee was authorised to evict the lessee and to reduce the property to his possession, and for this purpose the amount of Munpattam payable to the lessee was reserved with the mortgagee. The mortgagee was to collect and appropriate the profits or usufructs from item 1 and in addition, the mortgage-deed provided that the mortgagors should pay to the mortgagee an amount of Rs 50-9-0 per annum towards interest on the mortgage amount over and above the Pattam or profits from item 1. The plaintiff - appellant obtained an assignment of the mortgage right as per Ext. P-2 dated 7-3-53. Notwithstanding the provision contained in the mortgage-deed that the mortgagee was to recover possession of the property from the lessee on payment of the Munpattom amount reserved with him. no steps were taken by him in this regard and the property continued in the possession of the lessee. The suit was brought for recovery of the mortgage amount by sale of the suit properties in enforcement of the provision for sale contained in the document.
(2.) The defendants contended that they are agriculturists entitled to the benefit of Kerala Act 31/1958, that the mortgagee is entitled to realise only the principal amount with interest at the rate of 5 per cent per annum from the date of mortgage, that the amounts of Pattam received by the mortgagee from the lessee of item I has to be regarded as payment of interest and that if such amounts are taken into account and a proper appropriation made towards interest and capital, only an amount of Rs 2S7-43 is due to the mortgagee towards the mortgage debt. The Trial Court held that the profits realised by the mortgagee cannot be regarded as interest paid or credited and that therefore, the defendants are not entitled to have a reopening of the accounts by adjustment of the profits realised from item 1 towards interest and principal. The suit was therefore, decreed in terms of the plaint.
(3.) On appeal by the defendants to the District Court, Trichur, the lower appellate court took the view that inasmuch as the mortgagors had agreed to pay a sum of Rs. 50-9-0 annually to the mortgagee towards interest in addition to the profits from item 1, a rate of interest must be deemed to have been stipulated for in the mortgage and that therefore the defendants are entitled to relief under S.5 by a reopening of the accounts and by appropriating the income realised from item 1 towards interest and principal. In this view, the decree of the Trial Court was set aside and the case was remitted to the said court for the limited purpose of ascertaining the amount due under the mortgage on a recalculation as directed in the appellate judgment. The plaintiff has come up with this Second Appeal challenging the aforesaid decision of the learned District Judge.;

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