S. RAJAGOPALASWAMI NAIDU versus BANK OF KARAIKUDI LTD.

Citation: [1971] 2 S.C.R. 427 · Decided: 22-09-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

A 
8 
c 
D 
E 
F 
G 
H 
427 
S. RAJAGOPALASWAMI NAIDU 
V. 
BANK OF KARAIKUDI LTD. 
September 22, 1970 
[J.C. SHAH AND A. N. GROVER, JJ.] 
Transfer of Property Act 4 of 1882, s. 67A, Applicability of-Usurious 
Loans Act 1918-Rate of interest when penal. 
The appellant mortgaged his property bearing No. 162A West Masi 
Street Madurai Town for a sum of Rs. 45,000 with the respondent Bank 
on October 
1~. 1950. 
In January 1952 the appellant and his wife 
borrowed Rs. 25,000 and jointly executed a pronote. 
The wife deposit· 
ed her title deeds relating to premises No. 162 West Masi Street. On 
June 25, 1952 the appellant and his wife created a mortgage of their 
respective pwperties Nos. 162A and 162 West Masi Street to secure 
repayment of a sum of ·Rs. 8,850. All the three mortgages were in 
favour of the respondent Bank. 
In 1953 the Bank institute<! .a suit 
on the foot of the last two mortgages and obtained a decree against the 
appellant and his wife. 
This decree was satisfied. In April 1958 the 
Bank filed a suit on the foot of the mortgage dated October 14, 1950. 
The main defence of the appellant, who was the sole mortgagor, was 
that the suit was not maintainable in view of the provisions of s.67A 
of the Transfer of Property Act and that the stipulation of interest was 
penal and in contravention of the provisions of the Usurious Loans Act, 
1918. The trial court decreed the suit and the High Court dismissed 
the appeal. 
By special leave appeal was filed in this Court, 
HELD : If a mortgagor has made two or more mortgages of the 
same property or of different properties to the same 
mortgaaee 
the 
mortgagor may redeem each separately but the mortgagee must enforce 
all or none. To attract the applicability of s. 67 A it is essential that 
the mortga~or must be the same and he should have executed two or more 
ll)Ortgages in respect of each of which he has a right to obtain the same 
kind of decree under s. 67. 
In the present case it was not possible 
to 
hold 
that the· mortgagor in 
the suit on the foot of the 
mortgage dated October 14, 1950 was the same as the 
mort~agor in 
the previous suit which was filed on the foot of the mortgages in favour 
of the appellant and his wife. 
In the other. two mortgages there were 
two mortgagors, one the appellant and the other, his wife. There is· no 
statutory provision or rule or principle by whic.h the wife 
and 
the 
husband could be treated as one entity for the purpose of the mortgage, 
Each was owner of ,a separate and distinct property and both joir\ed in 
mortgaging their respective properties. The bar of s. 67A 
therefore 
could not possibly come in the way of the institution of the present 
suit. [429 B-F)] 
Moro Raghunath v. Balaji, I.L.R. 13 Born. 45, approved & applied. 
(ii) ill the light of the provisions of the mortgage deed and all the 
circumstances the interest rate of 12% was unfair an4 penal. 
[Rat8 
suitably reduced.] (429 G] 
CIVIL APPELLATE JURISDICTJON : Civil Appeal No. 1672 of 
1966. 
Appeal from the judgment and order dated 16th March 1965 of the 
M•dras High Court in Appe&l Suit No. 139 of 1961. 
P. Balagopal A. V, Rangam and Lily Thomas, Advocates for the 
appellant. 
428 
SUPREME COURT REPORTS 
[1971] 2 S.C.R. 
M. Natesan, R, Ramamurthi Iyer and R. Gopalakrishnan, for the 
Respondent. 
The Judgment of the Court was delivered by 
Grover, J, 
This is an appeal by certilicate from a decree of 
the Madras High Court. 
The appellant mortgaged his property bearing No. 162A WeFt 
Masi Street, Madurai town for a sum of Rs. 45,000/- with the 
respol)dent Bank on October 14, 1950. 
He agreed to repay 
Rs. 5,000/- within a specified date and the balance was payable 
witijin two years from the date of the deed together with interest 
at 1 Ot % . It was further agreed that if the mortgagor failed to 
pay the interest periodically and regularly he would be liable to 
pay interest at the rate of 12% per annum from the date of such 
default and further ii he failed to pay !he entire amount stipulated 
within two years he would have to pay the whole amount together 
with interest at 3t% per annum. 
The sum of R;;, 5,000/- was 
paid within the time specified but the balance remained unpaid. 
In January 1952 the appeHant and his wife borrowed Rs. 25,000/-
and jointly executed a pronote. 
The wife deposited her title deeds 
relattng to premises No. 162 West Masi Street. On June 25, .1952 
the appellant and his wife created a mortgage of their respectiv

Excerpt shown. Read the full judgment & AI analysis in Lexace.