Summary
The first appellant advanced monies to D against mortgages of her property. D was adjudicated an insolvent in 1949 and her properties got vested in the Official Assignee of Madras. The Official Assignee brought the properties to sale which were ultimately purchased by the first respondent.
The Trial Court decreed the appellants' suit for enforcement of the mortgages against the property and awarded interest at the rate of 15 per cent compoundable with yearly rests.In appeal the Division Bench of the High Court found that in the circumstances of the case a rate of 10, per cent compound interest with yearly rests was just. With certificate the appellants came to this Court. Section 3 of the Usurious Loans (Madras Amendment) Act, 1937 fell for consideration.HELD : The net result of the various clauses of s. 3 to be that the court must go back to the date of the original transaction and form an opinion as to the rate of interest which would be reasonable after considering (a) the value of the security offered;(b) the financial condition of the debtors including the result of any earlier transaction;(c) the known and probable risks in getting repayment;(d) whether compound interest was provided for and if so the frequency of the Period of calculation of interest for being added to the principal amount of the loan. [725 E-G]In the circumstances of the case the Division Bench rightly held that 10 per cent compound interest with yearly rests would meet the justice of the case. The security was not inadequate and the threat of a suit by the brother of the mortgagor was not serious. [726 A-B]Venkatarao v. Venkatratnam, A.I.R. 1952 Madras 872 and Sri Balasaraswati v. A. Parameswara Aiyar, A.I.R. 1957 Mad. 122 referred to.There was also no reason to interfere with the scaling down of the rate of interest to 6 per cent from the date of filing of the suit. Although the reasons were not indicated it was fairly clear that the High Court was, using its discretion as regards interest pendente lite. [726 E]See the full content of this document
Extract
Srinivasavardacharur And Ors. VS. Gopala Menon And Ors.
PETITIONER: SRINIVASAVARDACHARUR AND ORS.Vs.RESPONDENT: GOPALA MENON AND ORS.DATE OF JUDGMENT: 04/10/1966BENCH: MITTER, G.K.BENCH: MITTER, G.K.WANCHOO, K.N.SHELAT, J.M.CITATION: 1967 AIR 412 1967 SCR (1) 721ACT: Usurious Loans (Madras Amendment) Act (8 of 1937), s. 3-Rate of interest permissible.JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 636 of 1964.Appeal from the judgment and decree dated September 1, 1959 of the Madras High Court in O. S. Appeal No. 104 of 1955.T. V. R. Tatachari, for the appellants.R. Thiagarajan, Jayaram and M. R. K. Iyer, for respondents, Nos. 1 and 9.722 The Judgment of the Court was delivered by Mitter, J. This is an appeal fr...
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