Patna High Court
Lala Ramchandra Prasad vs Mahabir Prasad Singh And Ors. And Munshi ... on 9 July, 1921
Equivalent citations: 64IND. CAS.247
JUDGMENT Coutts, J.
1. This appeal arises out of a gait brought on a mortgage which was executed by the defendant No. 1 and the father of defendant No. 4 before the birth of this defendant. In the Court of first instance it was held that the defendant No. 4 was not liable because his father was only a surety for the defendant No, 1, but the suit was decreed against the defendants Nos. 1 to 3 for the principal amount with simple interest only, although the rate stipulated in the bond was compound interest in case of default.
2. On appeal to the District Judge the suit was decreed in full and against this decree the defendant No. 4 has appealed.
3. The first point taken in the appeal is that the defendant No. 4 is not bound. The learned District Judge has dealt with this matter and has relied on the decisions of this Court in Bishwanath Prasad Sahu v. Gajadhar Prasad Sahu 43 Ind. Cas. 370 : 3 P.L.J. 168 : 3 P.L.W. 286 : (1917) Pat. 356 and Mahabir Prasad v. Siri Narayan 46 Ind. Cas. 27 : 3 P.L.J. 396 : 4 P.L.W. 437 : (1918) Pat. 328. The decision in Bishwanath Prasad Sahu v. Gajadhar Prasad Sahu 43 Ind. Cas. 370 : 3 P.L.J. 168 : 3 P.L.W. 286 : (1917) is the decisions of Jwala Prasad, J., and deals with the question of the interest of a son in ancestral property charged by the father before his birth, and he has held that such a son is not entitled to any interest. This follows the decisions of the Calcutta and Allahabad High Courts, and is, in my opinion, the correct view of of the law.
4. The other matter which is argued in this appeal is with regard to the rate of interest, and it is son tended that the interest is in the nature of a penalty. The original interest was 2 per sent, per month and in case of default the interest was 24 per sent. compound interest. This interest is not excessive, and it has been found by the learned District Judge that there is no reason to hold that it is in the nature of a penalty. Moreover it has been held that a contract to pay compound interest on failure to pay simple interest is not invalid, not being a stipulation for increased interest within the Explanation to Section 74 of the Contract Act. Prayag Kapri v. Shyam. Lal 31 C. 138 and Janki Das v. Ahmad Husain Khan 25 A. 159 : A.W.N. (1902) 218. In these circumstances I see no reason to interfere with the decision of the learned District Judge and X would dismiss this appeal with costs.
Ross, J.
5. I agree.