Arthur Wilson, J.

1. The plaintiff in this case purchased the property towhich the suit relates on the 2nd July 1883, the property being then subject totwo mortgages, one an equitable mortgage for Rs. 100 without interest, theother a legal mortgage for Rs. 200 with interest at 18 per cent. The plaintiffbrought this suit to redeem the mortgages and recover possession of theproperty. He paid into Court Rs. 600 as sufficient to cover all that could bedue upon the mortgages to the defendants or any of them. He alleged that thedefendants or some of them had wrongfully obtained and held possession from atime long before his own purchase, and for this he claimed mesne profits.

2. The case was heard before Cunningham, J., who made hisdecree, dated the 23rd February 1885, by which he ordered certain accounts tobe taken--(a) "an account of what is due to the defendants for principalon the equitable and legal mortgages...and for interest only on the legalmortgage at the rate of 18 per cent per annum up to the date of tender by theplaintiff of the sum of Rs. 600;" (b) "an account of the rents andprofits of the house and premises" since the date of the plaintiffspurchase. It was ordered that the amount found on taking the second accountshould be deducted from that found on the first; and provision was made, first,for the case of the sum found after such deduction not exceeding the Rs. 600paid in, and, secondly, for the case of its exceeding that sum. The otherprovisions in the decree were those that are usual in a decree for redemption.

3. The Registrar took the accounts as directed and made hisreport. The material passage in that report is this : "There is due to thedefendants upon and by virtue of the equitable and legal mortgages the sums ofRs. 100 and 200 for principal and the sum of Rs. 528 for interest on theprincipal sum due on the said legal mortgage. Out of the sum of Rs. 528-12, Ihave allowed only Rs. 200, and have disallowed the rest under the rule ofDamdupat." This finding of the Registrar was excepted to, and the casecame upon further directions before Trevelyan, J. The learned Judge agreed withthe Registrar in thinking that the rule of Damdupat, by which the amount ofinterest recoverable at one time cannot exceed the principal, was properlyapplicable to the case, but he thought he was precluded by the terms of the decreeof Cunningham, J., from applying it. He, therefore, allowed the exception, andvaried the report accordingly. Against that decision the plaintiff has nowappealed.

4. We are unable to agree with the view which the learnedJudge has taken of the construction of the former decree. The governing passagein the decree is that in which the accounts to be taken are defined. The firstaccount is of "what is due" for principal and interest upon themortgages, and it would, we think, require very strong ground to justify us inextending those words so as to include anything not legally due. The fact thata subsequent passage contemplated a result of the account which the rule ofDamdupat would render impossible is not, in our judgment, sufficient. The mostthat that can show is that the question of Damdupat was not present to the mindof the learned Judge who made the decree, not that he considered and excludedthe rule.

5. But it was contended on behalf of the respondent that, onthe merits and apart from any question arising upon the construction of theoriginal decree, there is no rule applicable to this case limiting the interestrecoverable to a sum equal to the principal. This involves two questions ;first, whether the rule of Damdupat, whatever it be, does or does not apply inthis Court to contracts between Hindus ; secondly, if it does, whether it hasthe effect of limiting the amount of interest recoverable in this case.

6. It is well settled that in this province, outside thePresidency town, no rule limiting the amount of interest to a sum equal to theprincipal prevails. This has been held in Deen Dyal Paramanick v. KoylashChunder Pal Chowdhry 1 C. 92; Surjya Narain Singh v. Sirdhary Lall 9 C. 825;Ret Narain Singh v. Ram Dein Singh 9 C. 871 and in other cases, and it is nodoubt an anomaly that there should be one rule in Calcutta on such a point andanother outside it. But a comparison of the history of the law of Contracts inthe Presidency town with that in other parts shows, we think, that the differencedoes exist. The Statute 21, George III, c. 70, Section 17, required the SupremeCourt of Fort William to determine "all matters of contract and dealingbetween party and party in the case of Gentus by the laws and usages ofGentus." There was never any such legislative provision in force in therest of the province. The result was that, as between Hindus, the Supreme Courtwas expressly bound to give effect to the Hindu law of contracts, and the Hindulaw of contracts included the law of Damdupat. The High Court by its firstcharter was required to administer the same law as the Supreme Court, and thesecond charter continues the same law as was in force under the first. Itappears to follow of necessity that the law of Damdupat is in force in this Courtbetween Hindus, unless there has been some legislative enactment inconsistentwith it.

7. The only Act cited said to be inconsistent with it, andtherefore to overrule it, is the Act for the repeal of the Usury Laws (XXVIIIof 1858). But we think there is nothing in that Act (which deals exclusivelywith the rate of interest which may be allowed) inconsistent with the rule nowin question. And the authorities are unanimous in favour of that view. To thiseffect are the decisions of Sausse, C.J., and Forbes and Newton, JJ., in DhonduJagannath v. Narain Ramchandra M.H.C.R. 47; of Couch, C.J., and Newton, J., inKhusal Chand Lall Chand v. Ibrahim Fakir 3 B.H.C.R.A.C. 23; of the learnedJudges in Nathubhai Panachand v. Mulchand Hirachand 5 B.H.C.R A.C. 196; ofCouch, C.J., and Westropp, J., in Hakima Manji v. Maman Ayab Haji 7B.H.C.R.O.C. 19. The same law was laid down by Westropp. C.J., and NanabhaiHaridas, J., in Pava Nagaji v. Govind Ramji 10 B.H.C.R. 382 (385) andre-affirmed by Westropp, C.J., and Melvill, J., in Ram Chandra Mankeshwar v.Bhimrav Ravji 1 B. 577 and by Westropp, C.J., and Green, J., in GanpatPandurang v. Adarji Dadabahi 3 B. 312. In this Court the authorities lead tothe same result. In Ram Lall Mookerjee v.. Haran Chandra Dhar 3 B.L.R.O.C. 130Peacock, C.J., went even further, and held that Act XXVIII of 1855 did noteffect the rules of the Hindu law relating directly to the rate of interest.The correctness of this view carried to its full extent was questioned byPhear, J., in Mia Khan v. Bibi Bibijan 6 B.L.R. 500 (505) but that learnedJudge fully approved of the Bombay decisions; and the same rule was followed inRam Connoy Audicarry v. Johur Lall Dutt 5 C. 867. The result is that, in ouropinion, the rule in question does in this Court apply to contracts betweenHindus.

8. The question remains whether the effect of the rule is topreclude the defendants from claiming the full amount of interest in this case.The statement of the rule in the first of the Bombay cases already referred tohas generally been accepted as correct. "The rule of Hindu law is simplythis, that no greater arrear of interest can be recovered at any one time thanwhat will amount to the principal sum." But on behalf of the respondent itwas argued that the nature of the doctrine has been totally misunderstood, themain contentions being, first, that the rule of Damdupat was only a moralprecept and not a rule of law at all, and, secondly, that it applied only tointerest prescribed by law in the absence of agreement and not to stipulatedinterest. The primary source of our knowledge on the subject is, of course, thetext of Manu and the other original authorities. The texts are collected inColebrookes Digest, Book I, c. 2 ; and the works from which they are taken arenow for the most part easily accessible to English readers. It was notcontended that these texts taken by themselves suggest any restriction orqualification such as that proposed. But it was contended that the opinions ofthe commentators collected by Jagannatha and the views expressed by thatlearned writer himself throw an entirely different light upon the matter. Themain question under consideration in the passages referred to is the rate ofinterest which might lawfully be charged, and whether there was any restrictionin the case of stipulated interest; in connection with this the rule as tointerest not exceeding the principal is also discussed. Mr. OKinealy showedvery clearly that some at least of the commentators were disposed to restrictthat rule or get rid of it altogether as a rule of law; but it is equally clearthat they are far from being agreed as to the principle upon which, or theextent to which, it could be limited, some leaning to the view of a mere moralprecept, others to confine it to legal as distinguished from stipulatedinterest. And though Jagannatha does, if we rightly understand him, express hisown opinion upon the main question under discussion whether there was anyrestriction of rate in the case of stipulated interest, we cannot find that hedoes so with regard to Damdupat. Harington (Analysis, Part I, Sections 3, p.181) says with reference to this discussion : "A considerable differenceof construction has been given by the commentators upon the Hindu law of contractsto the texts which respect the limitation of interest and the invalidity orimmorality only of usurious loans and engagements." And Sir Thomas Strange(Hindu Law, Vol. I, p. 298) says: " Involved in apparent contradiction thesubject is considered by Jagannatha to be intricate, nor has his Commentaryalways the effect of elucidating what is obscure or disentangling what isperplexed." We agree with these remarks and cannot gather any distinctrule from this source. All the later authorities agree in understanding therule of Damdupat as it has been laid down by the Bombay Court. Thus Sir ThomasStrange, in the place already referred to, so states it; and in the Appendix toChapter XII he gives a case (p. 473, Edit. of 1830) to which are appended remarksby Colebrooke and Ellis, both of whom independently and without hesitationstate the law to the same effect. Lastly, there is the long series of decisionsin the Bombay High Court and this Court, from the whole of which we mustdissent if we were to hold either that the rule of Damdupat is a mere moralprecept or that it does not apply to stipulated interest. And that we are notprepared to do. The anomaly of the present state of the law, if it is to beremoved, can only be removed by the Legislature.

9. One other argument it is necessary to notice. It wascontended, on the authority of Nathubhai Panachand v. Mulchand Hirachand 5B.H.C.R.A.C. 196 that the rule in question cannot equitably be applied in thecase of a mortgagee in possession when the account is taken on both sides, themortgagee being as such debited with the rents and profits. And it was saidthat this case fell within the rule there laid down. But the facts here arevery different. The account of rents and profits was not asked or orderedagainst the defendants as mortgagees in possession, but by way of mesne profitsagainst wrong-doers ; and accordingly they were limited to the time since theplaintiffs purchase, which could not properly have been done if the accountwas on the other footing.

10. The result is that, in oar opinion, the order of thelearned Judge, so far as it allowed the plaintiffs exception and varied thereport of the Registrar, was wrong, and that the report should have been andshould now be confirmed in its entirety.

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Nobin Chunder Bannerjeevs. Romesh Chunder Ghose and Ors.(31.03.1887 - CALHC)