BHRIGUNANDAN PRASAD AND ORS . versus THE APPELLATE OFFICER & ORS.

Citation: [1966] SUPP. 1 S.C.R. 55 · Decided: 25-03-1966 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Appeal(s) allowed

Judgment (excerpt)

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BHRIGUNANDAN PRASAD AND ORS . 
A 
v. 
THE APPELLATE OFFICER & ORS. 
March 25, 1966 
B 
[K. N. WANCHOO, J.C. SHAH ANDS. M. S!KRI, JJ.J 
Evacuee Interest (Separation) Act 64 of 1951, s. 9(1)-Mortgaged 
property of evacuee-Max;mum tiabilitu for interest payable to mort. 
gages fixed at five per cent per annum simple on principal money-
C 
Provision c1oes not justify reopening of accounts and utilising th<f 
excess over five per cent towards reduction of principal. 
The appellants were mortgagees of properties including a house 
on the basis of a mortgage-bond executed in 1928. The interest pro-
vided in the bond was 9% per annum compoundable annwrlly, In 1937 
the house above referred to was sold to B subject to the earlier 
mortgage. In 1939 the appellants filed a suit against the original mort-
gagors and others including B for the amount due under the mort-
gage. Certain amounts towards the discharge of the liability under the 
mortga:ge were received by the appellants before as well as after 
the filing of the suit. A preliminary decree was passed in favour of 
the appellants in 1942 and the final decree in 1945. In 1949, B was 
declared an evacuee. When in 1952 the appellants put their decree 
in execution the property was treated as "composite property" and 
the Custodian of Evacuee Property contended before the Competent 
Officer that the appellants were not entitled to any interest higher 
than five per cent per annum simple from the date of the mortgage 
under s. 9(1) of the Evacuee Interest (Separation) Act, 64 of 1951. The 
Custodian accordingly claimed that the entire transaction should be 
re-opened from the date of the mortgage and 'if more than five per 
cent simple interest had been received by the appellants the excess 
should be credited towards the principal amount. The Competent 
Officer held that the limit of five per cent could not apply before the 
Act came into force. The Appellate Officer however upheld the con-
tention of the Custodian. The appellants thereupon filed a writ peti-
tion in the High Court which was dismissed in limine, By special 
leave they appealed to this Court. 
HELD: Section 9(1) only deals with the liability of the mortga-
ged property which may still be due when the claim is made before 
the competent officer. Though the provision is retrospective 
in the 
sense that where the liability is still there, interest has to be cal-
culated at five per cent per annum simple, there is nothing in the 
words of s. 9(1) which authorises the reopening of the accounts 
and utilising the excess over five per cent per annum simple. to-
wards reduction of principal provided the payment of inter~t al· 
l'.eady made in within the contractual rate. [61 F] 
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F 
G 
On the above view the maximum l'.ate of interest laid down in 
s. 9(1) was not anplicable before the date of the suit. But under s. 
·8(3) the decree of the Court was subject to s .. 9 and, therefore ~ter 
· the date of th$ suit the said ·rate was applicable. rnirectlons ~ven B 
accordingly]. [61 HJ 
L/SiiSCl-6. 
55 
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SUPREME COURT REPORTS 
·- (1966) SUP?'. S.C.l!.• 
A 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. !02 of 
1964. 
App;:al by special leave from the judgment and order dated. 
July 30 ,1962 of the Punjab High Court (Circuit Bench) at Delhi 
in Civil Writ No. 402-D of 1962. 
B . 
D. Goburdhan for the appellants. 
c 
S. G. Patwardhan and B. R. G. K. Achar for the respondents. 
· The Judgment o(ihe Court was delivered by 
Wanchoo, J. The only question raised in this appeal by special 
leave from the judgment of the Punjab High Court is the interpreta-
tion of s. 9 (I) of the Evacuee Interest (Separation) Act, No. LXIV 
of 1951 (hereinafter referred to as the Act). The question arises irr 
this way. The appellants were mortgagees· of certain properties. in-· 
eluding a house, on the basis of a mortgage-bond dated July 19, 
1928. The consideration of the bond was Rs. 25,000 and interest 
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was provided at nine per cent per annum compoundable annually. 
Out of the properties covered by the bond, one of the properties was 
sold to Bibi Chand Tara on October 23, 1937 subject to the earlier 
mortgage of 1928. In October 1949, Bibi Chand Tara was declared 
an evacuee. 
In 1939 the appe11ant filed a suit against the orignal mortgagors 
and others including Bibi Chand Tara for the amount due under 
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the mortgage. A preliminary decree was passed in their favour in 
March 1942 and the final decree followed 

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