Kambala Venkanna vs Goteti Veeraraju and Another

Madhavan Nair, J.—The purchaser from the plaintiff who was made a supplemental respondent in the lower appellate Court is the appellant

in this second appeal.

The facts of the case are stated clearly in the judgments of the Courts below and need not be re-stated in detail. For the purposes of this second

appeal which raises only one point, the only facts relevant are these : The plaintiff sued for contribution from the third item of the property, the

owner of which is the second defendant who had purchased it from the first defendant. Items 1 and 2, along with the third and some other items,

were subject to a first mortgage. Some of these items were subject to a second mortgage also. We are not concerned with the second mortgage or

with items other than items 1, 2 and 3 in this second appeal. Plaintiff''s father became the purchaser of items 1 and 2 in execution of a small cause

decree in S.C. No. 84 of 1902 and after him the plaintiff came into possession of the same. The first defendant had become the owner of the third

item and had sold it to the second defendant. The first mortgagee''s son filed O.S. No. 54 of 1910 in the Ellore Sub-Court impleading the first

defendant also among others and obtained a decree and in execution thereof brought items 1 and 2 for sale on 30th June, 1913 and from the

proceeds realised his decree amount. The third item which was also subject to the first mortgage was not proceeded against in execution. The

plaintiff instituted the suit, out of which this second appeal arises, on 30th June, 1925, for contribution from item 3 also rateably according to its

value since it was included in the original mortgage. The defendants denied the plaintiff''s right to contribution.

The District Munsiff granted the plaintiff a decree on 30th September, 1927, for contribution from the third item. It was held by him that this item

was liable to contribute Rs. 316-4-0 towards the decree debt (see issue 17). It was also held (see issue 15) that the plaintiff was entitled to claim

interest on the amount from the date of the registered notice Ex. F, 28th February, 1917, issued by him claiming the amount and interest. In appeal

by the second defendant the lower Court''s decree was confirmed with regard to -the amount decreed but the learned Judge disallowed the

interest which had been allowed from the date of notice till the date of the lower, Court''s decree.

In this second appeal Mr. Somasundaram on behalf of the appellant claims that he is entitled to a larger sum than Rs. 316-4-0 for contribution

and that he is also entitled to interest on that amount. He claims interest from the date of payment of the decree amount by the appellant''s

predecessor, i.e., 30th June, 1913. If this plea is not accepted he argues that he is entitled to interest at least from the date of notice as awarded by

the first Court.

As regards the amount of contribution claimed, it is agreed between the parties that the proper amount to which the appellant is entitled should

be Rs. 344-0-2 and not Rs. 316-4-0. If the appellant is entitled to interest, he is entitled to it on this amount. Thus the only question that remains to

be determined in this second appeal is whether the appellant can claim interest on the amount which he is entitled to get by way of contribution

from the respondent (the second defendant) and from what date.

The question is purely one of law : but no decisions directly bearing on the point, either English or Indian, have been brought to my notice. Of

the various cases cited the following may be referred to as somewhat relevant. In Raushan Ali Khan Chowdhury v. Kali Mohan Moitra (1906) 4

C.L.J. 79, it was assumed that the person claiming contribution was entitled to interest on the amount; but it was disputed whether he should be

allowed interest at 12 per cent, per annum as the lower Court had granted or whether he should get only 6 per cent., as provided for in the original

mortgage decree. On this point, in coming to the conclusion that the plaintiffs are entitled to the interest allowed by the Court, the learned judges

said:

We think that it should not be right and proper to refuse to the plaintiffs the ordinary rate of interest which in a. case like this the Court does allow.

The right to claim interest was obviously-put by the learned judges on equitable considerations. The question whether the plaintiffs are entitled to

claim interest at all was not discussed as the point was not disputed. Hari Raj Singh v. Ahmad-ud-din ILR (1897) 19 All. 545 is another case

where also the right to claim interest on the contribution amount was assumed : but the circumstances of the case were taken into consideration in

refusing interest, prior to the date of the institution of the suit. In S.A. No. 1544 of 1931, Venkatramana Rao, J., said:

the plaintiff is certainly entitled to interest on the amount decreed to him from the date of payment by him and also to a charge for the amount

allowed.

Krishnaszvami Pillai v. Janakalaxmi Ammal (1933) 66 M.L.J. 308 another case which may also be referred to in this connection. In Ahmad

Wall Khan v. Shamsh-ul-Jahan Begam (1905) 16 M.L.J. 269 : L.R. 33 IndAp 81 : ILR 28 All. 482 strongly relied on by the respondent, the

plaintiff who was treated by the Privy Council as a co-mortgagor along with the respondents and had paid off the whole of the joint debt due on

the mortgage was given a proportionate share of that amount with interest from the date of the institution of the suit. Payment of the debt was made

by him in 1896. Before the Privy Council it was argued that treating him as a co-mortgagor he was entitled to get one-third share of the debt

together with interest, obviously from the date of payment. Though the point was thus raised in the course of the arguments, nothing was said about

it in the judgment of the Privy Council and so it cannot be said to be a decision against the appellant. In the first Court treating him as surety the

plaintiff was awarded the full amount including the interest claimed by him. This judgment was set aside by the High Court. The Privy Council

discharged the decrees of the two Courts in the manner indicated above. In the circumstances this decision cannot be understood as one holding

that a person claiming contribution is not entitled to claim interest on the amount claimed. The passages cited from Fisher on Mortgages, 6th

edition, p. 909, paras. 1805 and 1810, Cooteon Mortgages, Vol. I, p. 801 and the decision, Ashworth v. Munn (1886) 34 Ch. D. 391, do not

directly bear on the point. Section 82 of the Transfer of Property Act which explains ''contribution'' has been relied on by both sides in support of

their respective contentions. It is said that ''mortgage debt'' used in the section refers only to the exact amount of the mortgage, while on the other

side it is said that it means the mortgage money, which would include the principal money and interest. (See Section 58-A.)

This being the position with regard to the authorities I think the point has to be decided with reference to principle. I do not see why on principle

the plaintiff who has paid off the entire decree amount and saved the property of the defendant"" being proceeded against in execution, should be

deprived of interest on the money paid in so far as it refers to the amount payable by the defendant. As mentioned in Raushan Ali Khan

Chowdhury v. Kali Mohan Moitra (1906) 4 C.L.J. 79, Ithink in the circumstances it would not be ''right and proper'' to refuse to the plaintiff

interest on the amount claimed by him from the defendant. Even if the payment of interest does not come under any specific provision of law, still if

general equitable considerations justify award of the same, it is quite open to the Courts to award it, is a principle which cannot be disputed. In my

opinion, equitable considerations require in a case like the present that interest should be awarded to the plaintiff on the contribution amount. The

claim being founded in equity, it is left to the Court to decide the rate of interest that should be awarded and the time from which it should be

awarded. No doubt, logically speaking the interest should be awarded from the date of payment of the decree amount, 30th June, 1913. The

plaintiff could have asked for the amount as well as the interest soon after the payment made by him. But he did not do so. The suit was instituted

on 30th June, 1925. By his delay in asking for the amount, the amount of interest has become necessarily enhanced. I do not see why the plaintiff

should be given the indulgence of being allowed to claim a larger amount of interest by delay in taking proceedings. But this plea cannot be urged

against him if he is allowed to claim it from the date of demand by him, which was 28th February, 1917. (See Ex. F.) This is the date from which

interest was allowed by the first Court in his favour. The defendant knew on that date that interest was going to be claimed and he could have

averted the enhancement of the amount by paying it promptly. I do not think it will be inequitable in the circumstances to award interest on the

contribution amount allowed in favour of the appellant, that is, Rs. 344-0-2 from 28th February, 1917, at the rate of 6 per cent, per annum. In the

result, in modification of the lower Court''s decree, I hold that the appellant is entitled to recover Rs. 344-0-2 with interest at the rate of 6 per cent,

per annum from the date of the registered notice, 28th February, 1917, interest on the aggregate sum being allowed at the same rate till the date of

payment. The parties will pay and receive proportionate costs throughout. No leave.