# S. RAJAGOPALASWAMI NAIDU v. BANK OF KARAIKUDI LTD

- **Citation:** [1971] 2 S.C.R. 427
- **Court:** Supreme Court of India
- **Decided:** 1970-09-22
- **Case number:** CIVIL APPELLATE JURISDICTJON : Civil Appeal No. 1672 of 1966
- **Bench:** J.C. Shah, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s-rajagopalaswami-naidu-v-bank-of-karaikudi-ltd-5135
- **Pages:** 3

## Headnote

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.

## Text

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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 respective
properties Nos. 162A and 162 West Masi Street to secure l'epay-
. ment of a sum of Rs. 8850/-.
All the three mortgages were in
favour of the respondent Bank.
In 1953 the Bank instituted a suit on the foot of the last two
mortgages and obtained a decree against the appellant and his
wife.
This decree appears to have been satisfied. In April 1958
the suit out of which the present appeal has arisen was filed by
the Bank 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. 67 A of the Tra.nsfer of Property Act and that the stipulation of.
interest was penaJ and in contravention of the provisions of the
Usurious Loans Act 1918 .. A number of other issues were framed
but it is altogether unnecessary to mention them.
The trial court
granted a preliminary decree for the recovery of principal amount
of Rs. 40,000/- which remamed unpaid with interest at 12% per
annum from August 1, 1952 till the date of the decree and thereafter at 6% per annum till realisation.
An appeal was taken to
ihe. High Court where two points were agitated.
The first was
based on the provisions of s. 67 A of the Transfer of Property Act
and the second related to the rate of interest.
The High Court
did not accede to any of the contentions and dismissed the appeal.
Section 67 A of the Transfer of Property Act provides that a
mortgagee who holds two or more mortgages executed by the same
mortgagor in respect of each of which he has a right to obtain the
same kind of decree under s. 67 and who sues to obtain such decree
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s. RAJ.AGOPALASWAMI v. KARAIKUDI BANK (Grover, I.)
42~
on any one of the mortgages, shall, in the absence of a contract to
the contrary, be boWld to sue on ail mortgages in respect of which,
the mortgage-money has become due.
This section was i11serted
by the Amending Act 20 of 1929 in view of certain conflict among
the High Courts in this country, with regard to the right of the
mortgagee to sue at different times on different mortgages although
the mortgagor was the same.
As pointed out in Mulla'~ Transfer
of Property Act, 5th Edri. at pag~ 43 l SS. G l anu 07 A oi thi~ Act
lay down the simple rule that if a mortg~gor has made two <Jr more
mortgages of the same property or of different properties to the
same ·mortgagee the mortgagor may redeem each separately but
that the mortgagee must enforce all or none.
To attract the applicability of s. 67 A it is essential that the mortgagor must be the
same and he should have executed two or more moregages in respect of each of which he has a right to obtain the same kind of
decree under s. 67 A. In the present case it is not possible to hold
that the mortgagor in the suit on the foot of the mortgage dated
October 14, 1950 is the same as the mortgagor 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 nd statutory provision or rule or principle by which the wife and
the husband could be treated ·as one entity for the purpose of the
mortgages.
Each was owner of a separate and distinct property
and both joiried in mortgaging their respective properties. In
Moro Raghunath v. Balaji(') the first mortgage was by two brothers and the second mortgage of part of the same property was
by one brother.
The Bombay High Court held that the suit to
enforce the first mortgage did not bar a suit to enforce the second
mortgage.
This was belbre the insertion of s. 67 A but the principle embodietl in that section is clearly illustrated by that case.
The bar of s. 67 A, therefore, could not possibly come in the way
of the institution of the present suit.
On the question of interest we are of the view in the light of
the provisions of the mortgage deed and all the circumstances that
the rate of 12% is unfair and penal.
We are incline9, therefore,
to give this relief that the interest should be calculated at the rate
of 10t% (which was the original contractual rate) from the date
of the mortgage to the date of the preliminary decree.
Thereafter
the interest shall be payable as directed by the trial court at the
rate of 6 % per annum till realisation.
With this modification the
appeal is dismissed but in view of the entire circumstances the
parties are left to hear their own costs in this Court.
G.C.
Appeal dismissed.
(I} J.L.R.. 13 Bom'. 45.