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Dwarka Prasad Agarwala and Ors. Versus Firm Lalchand Bhagat Ambika Ram and Ors.

1973 (5) TMI 101 - PATNA HIGH COURT

A.F.O.D. No. 103 of 1963 - Dated:- 17-5-1973 - Anwar Ahmad and B.D. Singh , JJ. For Appellant: B.P. Rajgarhia, S.R. Sharan, Parmeshwar Prasad, J.C. Sinha and Madhukar Krishna Sinha, Advs. For Respondents: Sideshwar Singh, Adv. and Rudra Deo Kumar Sinha, Adv. (for minor defendants) JUDGMENT 1. This appeal by Defendants 1 to 3, who were defendants 1st party in the Court below, is directed against judgment and decree passed by the Additional Subordinate Judge in title mortgage suit No. 11/52 of 195 .....

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alchand Bhagat Ambika Ram, plaintiff No, 1, was a registered firm, registered under the Indian Partnership Act in 1952. Before that it was a joint Hindu family firms, whereas Beni Madhav Prasad, Plaintiff No. 2, and Jagarnath Prasad, who was original plaintiff No. 7, were partners of the firm. Plaintiffs 2 to 6 were members of the joint Hindu Family of which plaintiff No, 2 was the Karta. Plaintiff Nos. 7 to 13 were members of another Joint Family of which plaintiff No. 7 was the Karta during hi .....

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fendant No. 3 was the illegitimate son of defendant No. 1 and he was also aged 8 years when the suit was instituted. Defendants 4 to 6, who are defendant's second party, - respondents 14 to 16 in this appeal. were also members of another joint family of which defendant No. 4 was the Karta. Defendants 5 and 6 sons of defendant No. 4, were aged about 7 and 4 years respectively at the time of institution of the suit. According to the plaintiff, defendants 1 and 4 being step brothers were joint .....

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dated the 22nd August, 1944 (Ext. 7). in respect of the properties mentioned in Schedule B of the plaint, with a view to pay off the previous dues of Messrs Girdhnrilal Dharamchand, to rebuild his house, and to meet his own marriage expenses. Defendant No. 1 had executed Ext. 7 in the name of plaintiff No. 8. Subsequently, on the 4th February, 1946, defendant No. 1 took further loan of ₹ 6,000/ from the plaintiffs on executing anoiher mortgage bond dated the 4th February, 1946 (Ext. 7/a) .....

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rest covered under the two mortgage bonds in spite of demands made by the plaintiffs, which necessitated institution of the suit. The plaintiff mentioned the accounts of their claim in Schedule A of the plaint. The plaintiffs impleaded defendants 2nd party in the suit with a view to avoid future litigation, although, according to the plaintiffs, since after the aforesaid partition, they had no interest whatsoever in the properties under mortgage. In spite of that, defendant No. 4, one of the mem .....

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They denied the validity of the execution and attestation of the two mortgage bonds. They also pleaded that no consideration, as mentioned in the bonds, was paid to defendant No. 1. While admitting that the defendants second party had separated from defendants 1st party, they asserted that the defendants second party had eight annas share in the Sahibganj properties., including the suit properties, which were in joint possession of the defendants 1st and second parties. The common defence furthe .....

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two mortgage bonds, which defendant No. 1 had executed in favour of the plaintiffs, were merely paper transactions, and they were designed to deprive defendant No. 4 of his legitimate share in the suit properties. According to defendants 4 to 6, therefore, they had paramount title to the extent of eight annas in the alleged mortgaged properties. They further Contended that the plaintiffs had no cause of action whatsoever against them and since they were neither mortgagors nor persons claiming t .....

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by defendant No. 1, were imaginary. In fact, there Was no necessity for borrowing the said amount. 4. On the pleadings of the parties the following issues were framed: 1. Were the mortgage bonds in suit validly and legally executed and attested; and were they for consideration? 2. Whether the defendants Nos. 4, 5 and 6 have paramount title over half of the mortgaged properties? 3. Do the mortgage bonds in suit any way affect the right, title and interest of the defendant Nos. 4, 5 and 6, if any, .....

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examined. After considering the evidence on the record the learned Additional Subordinate Judge decided all the issues against the defendants 1st and 2nd parties. 6. Mr. B.P. Rajgarhia, learned counsel appearing on behalf of the appellants, has assailed all the landings given by the trial Court and contended that on the evidence on the record those findings could not be sustained. First of all he placed before us the findings of the Court below regarding issue No. 4. He drew our attention to pa .....

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partners, namely, P. Ws. 7 and 8, who were managing partners of the firm, who had entered into transactions on behalf of their firm, which was a registered money lender. Mr. Rajgarhia conceded that on the pleadings of the parties Section 5 of the Act was not relevant. Section 5 prescribes inter alia 9 per cent, per annum as the maximum rate of interest in the case of secured loans. In the instant case stipulated rate of interest in the two mortgage bonds was only 7 1/2 per cent. Therefore, the .....

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uit shall be entertainable if the loan to which the suit relates was advanced by the money-lender at any time before the expiration of six months after the date of the commencement of this Act and if he is granted a certificate of registration under Section 5 of the Bihar Money Lenders Act, 1938, at any time before the expiration of the said six months." According to him, two alternative findings, which the learned Subordinate Judge has given, while disposing of issue No. 4, namely, (i) tha .....

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ney lenders. In this connection he drew our attention to a portion of the judgment in paragraph 14 where the learned Subordinate Judge observed: "......... Neither defendant No. 1 (D. W. 10) nor defendant No. 4 (D. W. 14) or any of the witnesses examined on behalf of the defendants 1st and 2nd parties stated a word even that the plaintiffs were professional money lenders ........." 7. In order to find support to his contention Mr. Rajgarhia relied on a decision in K.S. Nanji and Co. v. .....

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prove in the sense of adducing evidence shifts from time to time having regard to the evidence adduced by one party or the other or the presumption of fact or law raised in favour of one or the other......" Relying on the above observation learned counsel urged that in the present case the burden of proof was in the former sense and the burden was constant on the plaintiffs throughout the trial. He also pointed on that the above principle of law enunciated oy their Lordships was also relie .....

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n the latter sense, that is, the phrase 'burden of proof as a matter of adducing evidence, as it will be found from the discussion which he made in paragraph 14 of the judgment There, as mentioned earlier, he relied on the evidence of P. Ws. 14 and 15. The former stated in cross-examination "the plaintiffs deal in grains. They do not carry on money lending business generally but they advanced loan to some friendly persons......" Whereas the latter (P. W. 15) stated in examination-i .....

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hich reliance has been placed by Mr. Bajgarhia, their Lordships observed at page 299 that it might be that even some slight evidence adduced by the plaintiff would shift burden on the defendant to prove that the suit was not maintainable by the Court but that burden on the defendant was a burden 'as a matter of adducing evidence'. 9. Mr. 'Rajagarhia then urged that the learned Subordinate Judge ought not to have relied on the evidence of P. Ws. 14 & 15 or he ought to have allowed .....

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rocedure. In order to substantiate this point he farther relied upon the observation of their Lordships in paragraph 7 at page 299 of the judgment in (supra) where their Lordships held that it was incumbent upon the plaintiff to have pleaded no in the plaint to establish that the wit was entertainable in spite of Section 4 of the Act. Mr. Rajgarhia further pointed out that in the absence of the issue also regarding casual character of the loan the learned Subordinate fudge ought not to have allo .....

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lication in the trial Court stating therein that the point was not pleaded in the pleadings by the plaintiffs; therefore, they should not be allowed to lead evidence on that point, as the defendants were taken by surprise. In order to substantiate his submission he relied on a judgment of the Supreme Court in Nagubai Ammal v. B. Shama Rao, (AIR 1956 SC 593) where it was observed that evidence let in on issues on which the parties actually went to trial should not be made* the foundation for deci .....

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defendants. Reference was also made to Kunju Kesavan v. M.M. Philip, (AIR 1964 SC 164). In that case their Lordships were considering regarding prejudice caused to the plaintiff in absence of certain pleadings in the written statement of the defendants. Their Lordships in paragraph 17 at page 169 observed that the plaintiff was not taken by surprise. He was also cross-examined. The plaintiff did not seek the permission of the Court to lead evidence on that point nor did he object to the receptio .....

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then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular m .....

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different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another." 11. Mr. Rajgarhia. however, contended that their Lordships of the Supreme Court in the cases referred to above were dealing with the cases where both parties actually went to trial. In other words, both parties .....

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and 15 that the two loans were casual in character had no value in the eye of law. The said evidence ought to have been completely ignored. In that situation it was not necessary for the defendants to lead evidence in order to neutralise the evidence of P. Ws. 14 and 15. 12. Mr. Rajgarhia further distinguished the principles laid down by the Supreme Court on the ground that in those cases their Lordships were not dealing with the provisions contained under the Bihar Money Lenders Act. According .....

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ing suits by money-lenders for recovery of loan? advanced by them unless such moneylenders are registered under the Bihar Money Lenders Act, 1938, when the to any were advanced. The expressions 'money-lender' and 'loan' are both defined in Section 2 of the Act. and although these express ion have been given particular connotation by judicial decisions, unless a plaintiff pleads in his plaint facts which would make the suit prima facie entertainable by the Court, it can hardly be .....

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4-2-1946, wherein the column 'creditor' Jagarnath Prasad's (plaintiff No, 7) occupation was described as 'money lender', Learned counsel contended that that would amount to an admission by the plaintiff himself that he was a professional money lender. Therefore, it could not be held that he was a casual money lender. In my opinion, that cannot be considered as an admission; nor can it be considered as a proof. Moreover, even if it is taken as an admission, that is not bindin .....

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ecuted on the 22nd August, 1944, whereas Ext. 7/a was executed on the 4th February, 1946. That also indicates that the plaintiffs were not casual money lenders; on the other hand, they were frequently advancing loans. Therefore, it could not be held that they were casual money lenders. in my view there is no merit in this contention. Reference may be made to Sano Kashinath v. Patitto Sabuto, (AIR 1942 Pat 348) where Harries, C. J. and Manohar Lall, J. observed that an element of continuity and h .....

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depend upon its own peculiar features. If investments by way of loan are made as a matter of regular business such investments constitute engagement in money-lending business. The fact that a person carried out isolated transactions of a particular kind did not mean that he carried on business of such a kind. A person might from time to time lend money to his friends or to persons close to him. If he made a habit of it for profit, then such lending might well become a business, but if the trans .....

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mt. Savitri Devi v. Smt. Beni Devi MANU/BH/0068/1968; Ramratna Singh and Shambhu Prasad Singh, JJ., also relied on the above observation of their Lordships. In Sanwarmal Agarwalla v. Benoy Krishna Mukherjee, (AIR 1970 Pat 167) my learned senior Brother, Anwar Ahmad and M.P. Verma, JJ, held that the provisions of Section 4 of the Act did not apply where money lending was casual and their Lordships followed the test of professional money-lender as laid down in AIR 1942 Pat 384 (Supra). 16. However .....

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nt wherein it was pleaded that the plaintiff firm Lalchand Bhagat Ambika Ram was a registered firm, plaintiffs 2 and 7 were partners thereof, of which plaintiffs 2 to 6 were members of the joint Hindu family with plaintiff No. 2 as Karta and the plaintiffs 7 to 12 were members of a joint Hindu family with plaintiff No. 7 as Karta and after his death plaintiff No. 8 had become Karta and the partnership business was conducted and managed by plaintiffs 7 and 8. He also referred to paragraph 5 of th .....

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xt. 6/a is the money lending certificate granted to the firm Lalchand Bhagat Ambika Ram on the 16th April, 1957, under Section 5 of the Money Lenders Act. 1938 (Bihar Act III of 1938). Ext. 6/b was also granted to the same firm on the 16th April, 1952, whereas Ext. 6/c was granted on the 1st April, 1946 to the same firm. Learned counsel contended, that those certificates were not relevant for the purpose of holding that the firm had licence for advancing the two loans on the 22nd August, 1944. a .....

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asad 1965 BLJR 247) and Jiwanlal Achariya v. Rameshwarlal Agarwalla, (AIR 1967 SC 1118) were relied. In my opinion, this submission of learned counsel is well founded. But, in the present case the learned Subordinate Judge has chiefly relied on Ext. 26 for his finding that the firm had money lending licence at the relevant time, that is, before the two loans in dispute were advanced, Ext. 26 is a true copy of the entry in the money lenders' register of Rajmahal Sub-Registry Office. In column .....

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ns in question. Mr. Rajgarhia firstly contended that the said entry, which is not original, is not admissible in evidence, and, therefore, the trial Court ought not to have relied on it. On the other hand, Mr. Sinha contended that it was a public document, and, therefore, the certified copy was admissible in absence of the original. He drew our attention to the provision contained in Clause (ii) of Sub-section (i) of Section 74 of the Evidence Act, which reads as: "The following documents a .....

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with a certificate written at the foot of "such copy that it is a true copy of such document or part thereof, as the case may be, and such certificate shall be dated and subscribed by such officer with his name and his official title, and shall be sealed, whenever such officer is authorised by law to make use of a seal; and such copies so certified shall be called certified copies." Explanation- Any officer who, by the ordinary course of official duty is authorised to deliver such copi .....

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from the provisions contained under the Evidence Act, Mr. Sinha also referred to Section 4 of the Bihar Money-Lenders Act, 1938. which provides that (1) every Sub-Registrar shall maintain a register, moneylenders in such form and containing such particulars as may be prescribed. (2) Such register shall be deemed to be a public document within the meaning of the Indian Evidence Act, 1872. The above provision in the Act itself, leaves no manner of doubt that the register maintained in the office .....

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repealed. In my opinion, the submission of Mr. Sinha is well founded. Ext. 26 was admissible in evidence. 19. Mr. Rajgarhia then urged that from Ext. 26 it is apparent that the licence was not in the name of the firm but it was in the name of Shri Krishna Prasad (plaintiff No. 8). Mention of the firm in the said column was merely to describe plaintiff No. 8. Therefore, he submitted that the learned Subordinate Judge has erred in holding that the licence was in the name of the firm and the money .....

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rship firm cannot be availed by any partner of the firm in respect of his individual business of money lending. In my opinion, the learned Subordinate Judge has failed to highlight the evidence adduced by P. W. 15, who had clearly stated in his evidence that plaintiff No. 1 was registered under the Indian Partnership Act for the first time in 1952, and that before that it was a joint family firm. In that view of the matter, in my opinion, the observation made by their Lordships in the case of Ka .....

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lding about the other loan, which was advanced on the 4th February, 1946, by plaintiff No. 7 to defendant No. 1 under mortgage bond (Ext. 7/a). Reference may be made to Section 6 of the Money Lenders Act, 1938, which provides that a registration certificate granted under Section 5 shall, unless sooner cancelled under Section 19 be in force only for five years 'from the date on which it is granied. Therefore, the certificate, which was granted on the 18th January, 1940, as it would be found f .....

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e found that both the bonds were duly executed and attested and that defendant No. 1 had received full consideration money of the two bonds. Mr. Rajgarhia has not seriously challenged the attestation and execution of the two bonds nor could he have done so in view of the solid evidence on the point. The learned Subordinate Judge has dealt with the matter of attestation and execution in paragraph 17 of the judgment. Abdul Rauf (P. W. 2) is one of the attesting witnesses of Ext. 7. The other attes .....

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put his signature on the mortgage bonds on being asked by plaintiff Nos. 7 and 8. His evidence the learned Subordinate Judge has rightly disbelieved. I find no reason, therefore, to differ from the findings of the learned Judge that the mortgage bonds were duly attested and executed by defendant No. 1. 21. Mr. Rajgarhia, however, contended that no consideration had passed under the two bonds and so the finding in this connection cannot be sustained with regard to the necessity for raising the lo .....

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) in cash......" Whereas in the other bond dated the 4th February, 1946 (Ext. 7/a) the executant stated: "I have not so far paid to you a single piece even towards either the principal or the interest of the amount borrowed previously by me from you under a registered rehani mortgage bond executed by me on 22-8-1944 I having stood in great need of money for meeting my family expenses and for carrying on business I have again borrowed this day from you a lump sum amount of ₹ 6,000 .....

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that there is not mentioned as such in the mortgage bond (Ext. 7). On the contrary, it is stated therein by defendant No. 1 that he took the entire ₹ 12,000/-on the 22nd August, 1944. In my opinion, this submission of learned counsel is not acceptable. Defendant No. 1, who examined himself as D. W. 10, admitted that Ext. 1/a bore his signature and therefore he is bound by the recital made therein. Mr. Rajgarhia emphasised that under Ext. 7 dated the 22nd August, 1944, when it was mentioned .....

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xt. 7 also indicates that the money was required for redeeming the aforesaid bond. P. W. 15 further stated that he, plaintiff No. 7 and defendant No. 1 had gone with the said sum of ₹ 3.000/- to the firm Girdharilal Dharamchand for paying the same to the said firm. He made over the entire amount of ₹ 3,000/- to Shankar Lal. Munib of the Firm, in presence of the proprietor. Accounling was done and it was frund that ₹ 1867/5/3 pies was due in respect of the loan advanced by that .....

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. In that view of the matter, according to him, Ext. 3/h was not reliable, since it could not have come into existence prior to the date of the execution of Ext. 7. I have seen the original of Ext. G/1 while writing the date of the said mortgage bond In Mahajani from the date was given as 15-9-1941. The month '9' is written in the same way in Mahajani as the month '9' is written in the endorsement (Ext. 3/h) while giving the date. Therefore, it would be wrong to read the endorsem .....

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ty, which was testified by P. VVs. 6, 11, 13 and 15. Ext. 15 is the petition dated the 17th August, 1944, and Ext. 16 is the plan, filed by defendant No. I to the Sahibganj Municipality for obtaining sanction for constructing a double storied building, which was constructed in 1045. Evidence was led on behalf of the plaintiffs to show that the name of Kishni Devi, first wife of defendant No. 1, who was dead all then, was engraved on the kalgi of the first floor of the building (vide P. W. 15). D .....

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e Judge after considering the evidence on the record held that the building was constructed by defendant No. 1 after execution of the mortgage bond (Ext. 7). 23. In my opinion, there is no scope for making any comment regarding non-passing of the consideration of ₹ 6,000/- in mortgage bond dated the 4th February, 1946, (Ext. 7/a). The necessity for raising further loan is already mentioned in the bond the Relevant portion of which I have already quot- ed earlier. Further, the receipt dated .....

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deration under the two bonds. 24. Now I turn to consider the finding of the trial Court regarding issues Nos. 2, 3 and 7 together, since they were considered together by the trial Court. Under these issues the trial Court found that the story of partition put forward by the plaintiffs was correct. After the said partition the entire mortgaged properties in suit were allotted to defendant No. 1 alone, who all along was coming in exclusive possession thereof. It was defendant No. 1 alone who had c .....

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cessary to implead the defendants second party in the suit as an abundant precaution. In my opinion, the appellants, who are defendants first party, cannot make any grievance regarding the findings of the trial Court on those issues. It was defendants second party, who were really aggrieved by the findings on those issues, but they have not come in appeal before this Court and, therefore, they were made respondents in this appeal. Their counsel, Mr. Sidheshwar Singh neither supported nor opposed .....

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minor defendants 5 and 6 paying up any dues under the two mortgage bonds (Exts. 7 and 7/a) and the learned Subordinate Judge has rightly held so. Under these two issues the only question, which fell for consideration, was whether the two minor defendants, namely, defendants 2 and 3, were :n any way liable for the loans taken by defendant No. 1 Defendant No. 2, it may be recalled, was the minor son of defendant No. 1, aged 5 years on the date of institution of the suit, that is, on the 6th July, .....

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gal necessities. 1 have already discussed the evidence of P. W. 15, who stated that defendant No. 1 had executed the two mortgage bonds for house-hold necessities, for marriage, construction of the house and for redeeming the previous mortgage. P. W. 15 had also stated that defendants 2 and 3 were not born when those mortgage bonds were executed. The fact with regard to the age of defendants 2 and 3 and their birth prior to the execution of the two bonds have not been controverted either in the .....

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nt of legal necessities. 26. Under issue No. 8, the learned Subordinate Judge, considering -/10/- annas per cent per mensem, corresponding to 71 per cent, per annum, as stipulated in the two mortgage bonds, found that the rate of interest was reasonable and the plaintiffs were entitled to full interest claimed over the principal sum of ₹ 18,000/- for the period prior to the suit. They were, therefore, entitled to full decree in the suit. He ordered the suit to be decreed on contest against .....

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irected to pay the decretal amount with costs within three months from the date of the order and in default of payment of the same within the period specified, the plaintiffs would be entitled to apply for final decree for the sale of the mortgaged properties or a sufficient part thereof and the sale proceeds thereof would be applied towards the satisfaction of the plaintiffs dues mentioned in the preliminary decree together with such amount as may accrue to the plaintiffs subsequently as intere .....

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ed by the mortgage bond, Ext. 7. 27. Mr. Rajgarhia lastly contended that since there were two mortgage bonds contained in Exts. 7 and 7/a, the plaintiffs ought to have filed two different suits. In my opinion, there is no merit in this contention of the learned counsel. Reference may be made to the provisions contained in Section 67A of the Transfer of Property Act, 1882, which provides: "A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which .....

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