P L D 1962 (W (PLP)

Date of hearing: 4th October 1961. SHABIR AHMAD, J.‑On the 28th of August 1927, Muhammad Nur‑ud‑Din mortgaged some land and a house standing thereon, situated near the City of Gujranwala, to Munshi Haider Muhammad for a sum of Rs. 25,000 by a registered mortgage deed. The relevant terms of this deed were that in lieu of interest payable on Rs. 10.000, the mortgagee shall retain the income of the property and with regard to the remaining Rs. 15,000 the interest was payable at 1% per mensem. The first payment towards interest was to be made on the expiry of the first year of the mortgage and subsequently it was to be paid after every six months. The period of the mortgage was stated to be five years. On the 901 of October 1957, Mst. Jahangir Begum widow of Muhammad Nur‑ud‑Din, Mst. Wazir Begum and Mst. Khurshid Begum his daughters and Muhammad Jahangir his son, brought a suit against the successors‑in‑interest of the mortgagee for redemption of the mortgage. In the plaint it was said that the defendants had taken through the; income of the mortgaged property a lot more than was due for interest and a prayer was made that the plaintiffs be granted a decree for redemption of the mortgaged property and the defendants be directed to pay the plaintiffs the amount found due from the defendants on account of the money which they had realised from the income of the property over and above the interest. The defendants, who were four sons of the original mortgagee, resisted the suit mainly on the ground that the plaintiffs were not entitled to redeem the property without paying Rs. 25,000 which was the principal amount and interest on Rs. 15,000 from the date of the mortgage to the date of redemption Some pleas were also raised with regard to Mst. Wazir Begum and Mst. Khurshid Begum, daughters of Muhammad Nur‑ud‑Din and their brother, who was one of the four plaintiffs, being incompetent to sue. B3‑ his order dated the 19th of December 1960, the Administrative Civil Judge, Gujranwala, decreed the suit in favour of the two daughters and the widow of Muhammad Nur‑ud‑Din on their paying a sum of Rs. 40,000, Rs. 25,000 being the principal sum due and the rest being the interest. The learned trial Judge came to the conclusion that the interest fixed in the mortgage‑deed was too high and that no more than 7 % per annum simple interest was admissible. At this rate the interest payable came to Rs. 36,375 but since that sum exceeded Rs. 15,000 on which interest was payable, according to the mortgage‑deed, he directed that the sum payable as interest should not exceed Rs. 13,

000. Against this preliminary decree passed by the learned trial Judge, three of the four defendants presented this appeal against the plaintiffs and impleaded one of their brothers, who had been their co‑defendant in the trial Court, as one of the respondents in the appeal. The prayer in the appeal was that the appellants be granted Rs. 36,375 instead of Rs. 15,000 as interest.

2. The only question that requires determination in this appeal is whether the defendants were entitled to get anything more than Rs. 15,000 as interest on the mortgage money. Learned counsel for the appellants urged that in acting on the doctrine dam du pat, according to which interest cannot exceed the principal amount, the learned trial Judge has committed an error because the doctrine was one of Hindu Law which was not applicable to Pakistan. It sounds rather strange that in a Muslim State interest, which according to strict Muslim Law is not payable at all, could be more than under the Hindu Law, but as the law stands the contention raised by learned counsel for the appellants that the learned trial Judge has erred In holding that only Rs. 15,000 could be awarded as interest cannot but be accepted as correct.

3. Learned counsel fur the plaintiff‑respondents, however. urged that even if the doctrine of dam du pat was not applicable, the defendant‑appellants were not entitled to anything more than the amount decreed in their favour by the learned trial Judge and therefore, their appeal should be dismissed. The contention raised by the learned counsel for the plaintiff respondents was that the transaction entered into between the mortgagor and the mortgagee in 1927 was extremely unfair to the mortgagor because interest on Rs. 10,000 only washed off the income from the property. He added that on account being taken it became clear that the defendants had realised a lot more than the sum payable as interest at 7 % per annum.

4. To the above contention of learned counsel for the plaintiff‑respondents, learned counsel for the appellants replied that not having appealed against the decree passed in their suit,1 the plaintiffs were precluded from questioning that decree and that the consideration had to be confined to one and one point only, namely, whether the amount of interest found due over anal above Rs. 15,000, which amount was allowed, could have been refused by the learned trial Judge on the ground that it exceeded the principal amount on which interest was due. It appears clear to us that this contention of learned counsel for the appellants has no force. It is laid down in Order XLI, rule 33 of the Code of Civil Procedure that the appellate Court shall have power to pass any decree and make any order which ought to have been passed or made by the Court which passed the decree under appeal and this power could be exercised in favour of all or any of the respondents or parties although such respondent or party may not have filed any appeal or cross‑objections. It follows, therefore, that if learned counsel for the plaintiff respondents was able to satisfy us that the sum of Rs. 15,000 should not be enhanced the appeal shall have to be dismissed.

5. In support of his contention that the amount of interest allowed should not be increased, learned counsel for the plaintiff‑respondents relied on section 4 of the West Pakistan Usurious Loans Ordinance (Ordinance XVIII of 1959), upon which learned counsel for the appellants urged that even if that section were applied the plaintiff‑respondents could not succeed because the rate of interest which had been fixed at 7J% per annum was not excessive within the definition given to that expression by the above‑mentioned Ordinance. This Ordinance which was promulgated on the 31st of March 1959 and was published in the Provincial Official Gazette Extraordinary as Notification No. Leg. 3 (18)/59 dated the 1st of April 1959, by its sixth section repealed the whole of the Usurious Loans Act, 1918, sections 5 and 6 of the Punjab Relief of Indebtedness Act, 1934 and the whole of the Usurious Loans (North‑West Frontier Amendment) Act, 1935 and provided, by its third section, that It would apply to all suits mentioned in section 3 which were pending on or were instituted after its commence ment. The present suit was clearly governed by the provisions of the West Pakistan Ordinance XVIII of 1959.

6. The contentions raised on behalf of the plaintiff‑respondents with regard to the transaction between the parties being unfair would be covered by section 4 of the Ordinance. The section is to the effect that where in any suit to which the Ordinance applies whether heard ex parte or otherwise, the Court has reason to believe that the interest is excessive or that the transaction was as between the parties thereto substantially unfair the Court could exercise the power of re‑opening the transaction and taking an account between the parties, grant the debtor all appropriate relief. It is true that the rate at which the interest was calculated by the learned trial Judge was not In excess of the rate fixed as the maximum by the West Pakistan Usurious Loans Ordinance XVIII of 1959, but from that the inference cannot be drawn that the transaction was not open to any other objection. Section 4 of the Ordinance clearly means that the Court can grant relief to a debtor either because the interest is excessive by which terms meant Interest at the rate of more than 7 % per annum or 2% B above the bank rate simple interest on secured loans and 12 % per annum simple interest in the case of unsecured loans, or if the transaction as between the parties was substantially unfair. The section does not mean that if Interest has not been charged at a rate which is described as excessive in the Ordinance, the debtor was not entitled to prove that the transaction was unfair to the debtor.

7. Now In the present case the income of the entire property was to wash off the interest on Rs. 10,000 only. For the reasons which will presently become apparent, this appears to us to be rather unfair. We are alive to the fact that at the time when the loan was taken the mortgaged property was not yielding much produce, but even so this condition was rather hard on the mortgagor. After some years, however, the property had started yielding the mortgagee and his successors quite substantial amount in the form of rent of a part of the land mortgaged to them and produce from some of its other parts. The evidence produced by the parties makes it clear that it was only for some time that the land in dispute had not been given on lease to persons who paid substantial amounts to the defendants or their father. There is another way of looking at the matter. As the rate of interest payable on Rs. 15,000 was fixed at 12% per annum compound interest, it is obvious that the mortgagee was of the view that he would get interest of Rs. 10,000 at that rate on account of the income of the mortgaged property. Even if compound interest is not worked out, simple interest on Rs. 10 000 at the rate of 12% per annum would come to Rs. 1,200 per year. If interest on Rs. 25,000 were calculated at per annum, it would come to Rs. 1,875 per year with the result that the mortgagor would have to pay Rs. 675 more as interest per year. Calculating interest at Rs. 675 per annum, the amount of interest payable on Rs. 25,000 for thirty‑three years, i.e., the period that elapsed between the date of the mortgage and the date of the decree, would come to Rs. 22,215, but if compound interest on Rs. 10,000 were calculated and deducted from the amount payable, it would come to much less. It is common knowledge that prices showed a steadily upward trend from the year 1940 onwards and it would, therefore, follow that for about fifteen years the mortgagee and his successors had been realising much more than Rs. 1,200 a year from tire income of the mortgaged property. It is not unlikely that if calculations were properly made en the lines indicated above, it would be found that less than Rs. 15,000 were due on account of interest. As, however, the plaintiff's have not appealed against the decree, the sum of Rs. 15,000 fixed for interest cannot be reduced. But it cannot be enhanced either. The burden of proving that the decree appealed against was incorrect was on the appellants and as we are of the view that they have not been able to show that they were entitled to anything more than Rs. 15,000 on the score of interest, we dismiss the appeal, but pass no orders as to its costs. S. B.