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PETITIONER: MHADAGONDA RAMGONDA PATIL & ORS.

       Vs.

RESPONDENT: SHRIPAL BALWANT RAINADE & ORS.

DATE OF JUDGMENT22/04/1988

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) SINGH, K.N. (J) KANIA, M.H.

CITATION:  1988 AIR 1200            1988 SCR  (3) 689  1988 SCC  (3) 298        JT 1988 (2)   159  1988 SCALE  (1)958

ACT:      Code of  Civil Procedure-Challenging right of mortgagor to redeem mortgage-When right of redemption is extinguished- Under provisions  of Order  XXXIV of-Application  of rule of Damdupat to mortgages-When.

HEADNOTE:      A suit for redemption of two mortgages was filed in the Court  of   Subordinate  Judge   by  the   respondents,  the successors-in-interest  of   the   original   mortgages.   A preliminary  decree   for  redemption   was  passed  with  a declaration of  the amount  due from  the mortgagors  to the mortgagee. The  mortgagors were  directed to  pay the amount within six  months to  get the  property  redeemed,  failing which the mortgagee could apply for a final decree for sale. On failure  of the  mortgagors to  make the payment, a final decree for sale was passed.      Although the  final decree  for sale  of the  mortgaged property had  been passed, the mortgagee did not execute the decree which became time-barred. The mortgagee and after him his heirs  and legal  representatives, however, continued to be in possession of the mortgaged property.      The respondents  filed a  second suit for redemption of the mortgages  in the Court of the Joint Civil Judge against the appellants-the  heirs and  legal representatives  of the original mortgagee.  The  Joint  Civil  Judge  came  to  the findings that  notwithstanding  the  preliminary  decree  or final decree  passed in  the previous  suit, the mortgagors’ right of redemption was not extinguished and the respondents were entitled to redeem the mortgages. The plea of protected tenancy of  the appellants  was negatived  by the Judge. The Joint Civil Judge held that the respondents were entitled to redeem the  mortgages on  payment to the appellants of a sum including interest  calculated by application of the rule of Damdupat, and a preliminary decree for redemption was passed under Order  XXXIV, rule 7 of the Code of Civil Procedure in respect of  both the  mortgages, with  directions  regarding payment of  the amount  and delivery of actual possession of the mortgaged property, etc to the respondents as also for a final decree  for foreclosure in case of default of payment,

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etc. 690      Aggrieved by the judgment of the Joint Civil Judge, the appellants preferred  an appeal  to the High Court. The High Court dismissed the appeal with a modification. Aggrieved by the decision of High Court appellants appealed to this Court for relief by Special leave.      The appellants  challenged the  findings  of  the  High Court as  to the  maintainability of  the  second  suit  for redemption  out   of  which   this  appeal   arose  and  the applicability of the rule of Damdupat.      Dismissing the appeal, the Court, ^      HELD: Sec. 60 of the Transfer of Property Act confers a right  of   redemption  on   the  mortgagor.  The  right  of redemption will  be extinguished  (1)  by  the  act  of  the parties or  (2) by  the decree  of a  Court. The  Court  was concerned in  this case  with the  question whether  by  the preliminary decree  or final  decree passed  in the  earlier suit, the  right of  the respondents to redeem the mortgages had been extinguished. The decree referred to in the proviso to section  60 of  the Transfer  of Property  Act is a final decree in  a suit  for foreclosure,  as provided in sub-rule (2) of  Rule 3  of Order  XXXIV and  a  final  decree  in  a redemption suit  as provided in Order XXXIV, Rule 8(3)(a) of the Code  of Civil  Procedure. Sub-rule  (2) of rule 3 inter alia provides that where payment in accordance with Sub-rule (1) has  not been  made, the  Court shall  on an application made by  the plaintiff  in this  behalf, pass a final decree declaring  that  the  defendant  and  all  persons  claiming through or  under him  are debarred from all right to redeem the mortgaged  property and also, if necessary, ordering the defendant  to   put  the  plaintiff  in  possession  of  the property. Thus,  in a final decree in a suit for foreclosure on the  failure of the defendant to pay all amounts due, the extinguishment  of   the  right  of  redemption  has  to  be specifically declared.  Again, in  a final  decree in a suit for redemption  of  mortgage  by  conditional  sale  or  for redemption of  an anomalous  mortgage, the extinguishment of the right  of redemption has to be specifically declared, as provided in  clause (a)  of sub-rule  (3) of Rule 8 of Order XXXIV of  the Code  of Civil  Procedure. These  are the  two circumstances-(1) a  final decree  in a suit for foreclosure under Order XXXIV Rule 3(2) and (2) a final decree in a suit for redemption  under Order  XXXIV, Rule 8(3)(a) of the Code of  Civil   Procedure-when  the   right  of   redemption  is extinguished. [696A-G]      In this  case, the  earlier suit  was not  a  suit  for foreclosure nor  was either  of the  mortgages a mortgage by conditional sale  or an anomalous mortgage and, accordingly, there was no declaration in the final decree 691 passed  in   the  earlier   suit  for  redemption  that  the respondents would  be debarred  from all right to redeem the mortgaged property.  In a  suit for  redemption, a  mortgage other than  a mortgage  by conditional  sale or an anomalous mortgage, the mortgagor has a right of redemption even after the sale  has taken  place pursuant  to the final decree but before the  confirmation  of  such  sale.  In  view  of  the provisions  of  Order  XXXIV,  the  question  of  merger  of mortgage-debt in  the decretal  debt does  not arise at all. The decision  of the  Patna High Court in Sheo Narain Sah v. Mt. Deolochan  Kuer, AIR  1948 Patna 208, relied upon by the appellants, is  erroneous in  so far  as it  laid  down  the merger of  the mortgage-debt  in the  decreta-debt  and  the

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consequent extinguishment  of the right of redemption of the mortgagor after  the passing  of the  final decree in a suit for  redemption.   The  right   of  redemption   will  stand extinguished only  under the  circumstances mentioned in the proviso to  section 60 of the Transfer of Property Act, that is, (1)  by the Act of party of (2) by a decree of Court, as aforementioned. The  contention of  the appellants that as a final decree  was passed  in the  earlier  redemption  suit, there was a merger of the mortgage-debt in the decretal-debt and as  such the  second suit for redemption was barred, was without any substance. [696G-H;697A-D]      The appellants  contended that the rule of Damdupat was applicable only  to a  simple loan  transaction  and  not  a transaction of mortgage. The Court could not appreciate this contention. [698D]      It is  an equitable  rule  debarring  the  creditor  to recover at any given time the amount of interest which is in excess of  the principal  amount due  at that time. In every mortgage, there  are two  aspects, namely,  (1) loan and (2) transfer of  interest in  immovable property. As mortgage is principally a  loan transaction  there is  no reason why the rule of  Damdupat, which  is an  equitable rule  should  not apply also  to a mortgage. On the application of the rule of Damdupat,  law  was  not  correctly  laid  down  in  Madhwas Sidhanta Onahini  Nidhi v.  Venkataramanjulu Naidu,  ILR  26 Madras 662.  The decisions  in Kunja Lal Banerji v. Narsamba Debi, ILR  42 Cal.  826; Jeewan  Bai v. Monordas Lachmondas, ILR 35  Bom. 199  and Bapurao  v. Anant  Kashinath, AIR 1946 Nagpur 210,  rightly held  that  the  rule  of  Damdupat  is applicable to mortgages. [698C-E;699F-G]      The  Judgment   and  decree  of  the  High  Court  were affirmed. [699G]      Raghunath Singh  v. Mt.  Hansraj Kunwar,  AIR 1934 P.C. 205 referred to. 692      Madhwa  Sidhanta   Onahini  Nidhi  v.  Venkataramanjulu Naidu, I.L.R. 26 Madras 662, disapproved.      Sheo Narain  Sah v.  Mt. Deolochan  Kuer,  A.I.R.  1948 Patna 208,  held erroneous  on the question of merger of the mortgage-debt  in   decretal   debt   and   the   consequent extinguishment of the right of redemption of mortgagor after the final decree. [697D]      Kunja Lal Banerji v. Narsamba Debi, I.L.R. 42 Cal. 826; Jeewanbai v.  Monordas Lachmondas,  I.L.R. 35  Bom. 199  and Baburao  v.   Anant  Kashinath,   A.I.R.  1946  Nagpur  210, approved.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 750 of 1973.      From the Judgment and Order dated 22.9.1972 of the High Court of Bombay in First Appeal No. 540 of 1969.      T.S. Krishnamurthy  Iyer, K.  Rajendra Chowdhary and K. Shivraj Chowdhary for the Appellants.      V.M. Tarkunde and Mrs. J. Wad for the Respondents.      The Judgment of the Court was delivered by      DUTT, J.  This  appeal  by  special  leave  is  at  the instance of  the defendants  in a suit for redemption of two mortgages and is directed against the judgment and decree of the Bombay  High Court  affirming those  of the  Joint Civil Judge, Senior Division, Kolhapur, decreeing the suit.      On June  16, 1925,  the predecessors-in-interest of the respondents executed a possessory mortgage bond for Rs.5,000

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in favour  of the predecessor-in-interest of the appellants. The mortgage  bond contained  a recital  that the  mortgagee should appropriate  the income of the property consisting of some plots  of land  towards the  sum of  Rs.3,000  and  was entitled to  interest @  9% per annum for the balance sum of Rs.2,000. By  a second  mortgage bond, which was by way of a simple  mortgage   executed  on   September  3,   1928,  the mortgagors mortgaged the same property to the same mortgagee to secure  repayment of  a further  loan  of  Rs.2,000  with interest @ 9% per annum.      The respondents  filed a suit for redemption of the two mortgages 693 in  the   court  of  the  Subordinate  Judge,  First  Class, Ichalakaranji, being  Suit No.  3  of  1947.  A  preliminary decree for  redemption was  passed on September 20, 1948 and it was  declared that  the amount of Rs.12,125 and odd and a further amount  of Rs.236  being the  cost of the suit, were due from  the mortgagors  to the  mortgagee. The  mortgagors were directed  to pay  the amount  within six  months and on such payment  to get  the property  redeemed; failing  which liberty was  given to  the mortgagee  to apply  for a  final decree for  sale. As  the mortgagors  failed to make payment within the  specified period,  on an application made by the mortgagee, a final decree for sale was passed in the suit on March 21,  1952. The decretal dues, as declared in the final decree, were  Rs.12,361 and odd plus cost amounting to Rs.41 for which  the  mortgaged  property  or  sufficient  portion thereof  was   directed  to  be  sold.  In  other  words,  a preliminary decree and a final decree in accordance with the provision of Order XXXIV, Rules 7 and 8 were passed.      Although the  final decree  for sale  of the  mortgaged property was passed, the mortgagee did not execute the final decree and allowed the same to be time barred. The mortgagee and after him, his heirs and legal representatives, however, continued to be in possession of the mortgaged property.      The respondents,  who are the successors-in-interest of the original  mortgagors filed  a second suit for redemption of the  mortgages, being Special Civil Suit No. 6 of 1968 in the  Court  of  the  Joint  Civil  Judge,  Senior  Division, Kolhapur, on January 9, 1968 against the appellants, who are the  heirs   and  legal   representatives  of  the  original mortgagee. It  was claimed  by the respondents that in spite of the  passing of  the final decree for sale in the earlier suit, being  Suit No. 3, 1947, the mortgage still subsisted, and that  they were  entitled to  redeem the  same  and  get possession of  the  mortgaged  property.  Accordingly,  they prayed for  a decree for redemption, accounts and possession of the mortgaged property from the appellants.      The appellants  contested the  suit by  filing  written statement. It  was contended  by them that as the mortgagors did not pay the decretal dues under the decree passed in the previous  suit,   their  right   of  redemption   had   been extinguished.  They   denied  the   respondents’  claim  for accounts. It  was claimed  by the appellants Nos. 3, 4 and 5 that their  predecessors-in-title were  tenants of  the suit land  from  before  1925  and,  as  such,  they  had  become protected tenants  under the Bombay Tenancy and Agricultural Lands Act.  Alternatively, it was contended that even if the respondents were held to be entitled to 694 redeem the  mortgages, they  were  not  entitled  to  obtain physical  possession  of  the  mortgaged  property,  as  the appellants had become protected tenants.      The learned Joint Civil Judge came to the findings that

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notwithstanding the  preliminary decree  or the final decree passed in  the previous  suit, being Suit No. 3 of 1947, the mortgagors’ right  of redemption  remained alive and was not extinguished and  that, accordingly,  the  respondents  were entitled to  redeem the  mortgages. The  plea  of  protected tenancy, as  raised by  the appellants, was negatived by the learned Joint  Civil  Judge.  On  the  above  findings,  the learned Joint  Civil Judge  held that  the respondents  were entitled to  redeem the  mortgages on  payment of  a sum  of Rs.13,551 and  odd including  interest to the appellants. In arriving at  the amount,  he applied the rule of Damdupat in calculating the  interest on  the principal amount up to the date of  the suit. A usual preliminary decree for redemption was passed  by the  learned Joint  Civil Judge  under  Order XXXIV, Rule  7 of  the Code of Civil Procedure declaring the aforesaid amount  as being  due from  the respondents to the appellants under  both the  mortgage bonds up to the date of the suit  and a  period of six months was granted to pay the aforesaid amount  and costs  of the suit and future interest on the  aforesaid amount @ 6% per annum from the date of the suit till  realisation. It  was  further  directed  that  on payment of the amount in court, the appellants would deliver actual  possession   of  the   mortgaged  property   to  the respondents and  that in  default of  payment as  aforesaid, liberty was  given to  the appellants  to apply to the court for a final decree for foreclosure.      Being aggrieved  by the  judgment  and  decree  of  the learned Joint  Civil  Judge,  the  appellants  preferred  an appeal to  the High  Court. At the hearing of the appeal, it was contended  by the  appellants that  the second  suit for redemption was  not maintainable;  that the rule of Damdupat was not  applicable to mortgages and that the appellants had become protected tenants by virtue of the Bombay Tenancy and Agricultural Lands  Act. It  was held by the High Court that in spite  of the fact that in the earlier suit a preliminary decree and a final decree were passed and the mortgagors did not redeem  the mortgages  by depositing  the decretal dues, still the  right of  redemption was  not extinguished. As to the applicability  of the rule of Damdupat to mortgages, the High Court  took the view that the learned Joint Civil Judge was  justified   in  applying  the  rule  following  certain decisions of  the Calcutta,  Bombay and  Nagpur High Courts, which will  be referred  to presently. Regarding the plea of the appellants that they had become 695 protected tenants  under the Bombay Tenancy and Agricultural Lands Act,  it was  held that  as the plea was raised by the appellants Nos.  3, 4  and  5,  the  amount  of  land  which happened to  be in possession of the said appellants Nos. 3, 4 and  5, would  be referred  to the Mamlatdar and excepting such land  the  learned  Joint  Civil  Judge  was  right  in decreeing delivery  of actual  possession of the rest of the land in  suit in  favour of the respondents. Subject to this modification, the  High Court  affirmed the  decree  of  the learned Joint  Civil Judge  and dismissed  the  appeal  with costs. Hence this appeal by special leave.      In this  appeal, the  appellants  have  challenged  the findings of  the High Court as to the maintainability of the second suit  for redemption  out of which this appeal arises and the  applicability of  the rule of Damdupat. The finding and direction  of the  High Court  in respect of the plea of the appellants  that they had become protected tenants under the Bombay  Tenancy and Agricultural Lands Act have not been challenged before us.      Mr. Krishnamurthy,  learned Counsel appearing on behalf

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of the appellants, has urged that in view of the fact that a preliminary decree  and a  final decree  were passed  in the earlier suit  in accordance  with the  provisions  of  Order XXXIV, Rules  7 and  8 of  the Code  of Civil Procedure, the present suit  for redemption  of the selfsame mortgages, out of which  this appeal  arises, is  not maintainable.  It  is submitted by him that after a preliminary and a final decree for redemption  are passed in accordance with the provisions of Order  XXXIV,  Rules  7  and  8  of  the  Code  of  Civil Procedure, the mortgage-debt merges in the decretal-debt and the right  of redemption  is extinguished. In support of his contention, the  learned Counsel  has placed  much  reliance upon a  decision of  the Patna High Court in Sheo Narain Sah v. Mt. Deolochan Kuer, AIR 1948 Patna 208. In that case, the appellant had  purchased a share in the equity of redemption and one  of the  questions was  whether the right of partial redemption acquired  by the  appellants would  survive under Order XXXIV,  Rule 5  of the  Code of  Civil Procedure until confirmation of  the same  in the  execution proceedings. In that context,  it was  observed that  the mortgage-debt  had merged in  the decretal-debt  and after  the passing  of the final decree  for sale neither the right of total redemption nor the  right  of  partial  redemption,  conferred  on  the mortgagor by  section 60  of the  Transfer of  Property Act, survived the  final  decree  for  sale;  all  that  remained thereafter was  a different right of redemption conferred by Order XXXIV, Rule 5. The observation regarding the merger of the mortgage-debt  in the  decretal-debt is, in our opinion, to some extent obiter. 696      Section 60  of the  Transfer of  Property Act confers a right of redemption on the mortgagor. The proviso to section 60 reads as follows:           "Provided that the right conferred by this section           has not  been  extinguished  by  the  act  of  the           parties or by decree of a Court."      It  is   thus  manifestly   clear  that  the  right  of redemption will  be extinguished  (1)  by  the  act  of  the parties or  (2) by  the  decree  of  a  Court.  We  are  not concerned with  the question  of extinguishment of the right of redemption  by the  act of  the parties.  The question is whether by  the preliminary decree or final decree passed in the earlier suit, the right of the respondents to redeem the mortgages has been extinguished. The decree that is referred to in  the proviso to section 60 of the Transfer of Property Act is a final decree in a suit for foreclosure, as provided in sub-rule  (2) of Rule 3 of Order XXXIV and a final decree in a  redemption suit  as  provided  in  Order  XXXIV,  Rule 8(3)(a) of the Code of Civil Procedure. Sub-rule (2) of Rule 3, inter  alia, provides  that where  payment in  accordance with sub-rule  (1) has not been made, the court shall, on an application made  by the  plaintiff in  this behalf,  pass a final decree  declaring that  the defendant  and all persons claiming through or under him are debarred from all right to redeem  the  mortgaged  property  and  also,  if  necessary, ordering the defendant to put the plaintiff in possession of the property.  Thus,  in  a  final  decree  in  a  suit  for foreclosure, on  the failure  of the  defendant to  pay  all amounts due,  the extinguishment  of the right of redemption has to be specifically declared. Again, in a final decree in a suit for redemption of mortgage by conditional sale or for redemption of  an anomalous  mortgage, the extinguishment of the right  of redemption has to be specifically declared, as provided in  clause (a)  of sub-rule  (3) of Rule 8 of Order XXXIV of  the Code  of Civil  Procedure. These  are the  two

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circumstances-(1) a  final decree  in a suit for foreclosure under Order  XXXIV, Rule  3(2); and  (2) a final decree in a suit for  redemption under  Order XXXIV, Rule 8(3)(a) of the Code of  Civil Procedure-when  the right  of  redemption  is extinguished.      In the  instant case,  the earlier  suit was not a suit for foreclosure  nor was either of the mortgages, a mortgage by  conditional   sale  or   an  anomalous   mortgage   and, accordingly, there  was no  declaration in  the final decree passed  in   the  earlier   suit  for  redemption  that  the respondents would  be debarred  from all right to redeem the mortgaged property.  Rule  5(1)  of  Order  XXXIV  expressly recognised the right of the 697 mortgagor to  redeem the  mortgage at  any time  before  the confirmation of  a sale  made in pursuance of a final decree passed in  a suit  for sale.  Similarly, Rule  8(1) of Order XXXIV permits the mortgagor to redeem the mortgaged property before the  confirmation of  the sale held in pursuance of a final decree  in a redemption suit, unless such final decree debars the  mortgagor from all right to redeem the mortgaged property which,  as noticed earlier, is provided for in sub- rule (3)(a)  of Rule 8 of Order XXXIV relating to a mortgage by conditional  sale or  an anomalous  mortgage.  Thus,  the provisions of  Order XXXIV have laid down in clear terms the circumstances when  the right of redemption of the mortgagor would stand  extinguished. It  is also  clear that in a suit for  redemption,   a  mortgage  other  than  a  mortgage  by conditional sale or an anomalous mortgage, the mortgagor has a right  of redemption  even after  the sale has taken place pursuant to the final decree, but before the confirmation of such sale.  In view  of these  provisions, the  question  of merger of mortgage-debt in the decretal-debt does not at all arise. We  are, therefore,  of the view that the decision in Sheo Narain’s  case (supra),  in so  far as it lays down the merger of  the mortgage-debt  in the  decretal-debt and  the consequent extinguishment  of the right of redemption of the mortgagor after  the passing  of the  final decree in a suit for redemption, is erroneous.      In this  connection, we  may refer to a decision of the Privy Council  in Raghunath Singh v. Mt. Hansraj Kunwar, AIR 1934 PC  205 where  it has been held by their Lordships that the right  to redeem is a right conferred upon the mortgagor by enactment,  of which he can only be deprived by means and in manner  enacted for  that purpose,  and strictly complied with. It  is manifestly clear from the said observation that the right  of redemption  will stand extinguished only under the circumstances  as mentioned in the proviso to section 60 of the  Transfer of Property Act, that is to say, (1) by the act of  party or  (2) by  a decree of Court. We have already discussed above  the circumstances when by a decree of Court the right of redemption is extinguished.      The Federal Court had also occasion to consider whether a  second  suit  for  redemption  was  barred.  Kania,  C.J. speaking for the Court observed as follows:           "The right  of redemption  is  an  instance  of  a           subsisting mortgage and it subsists so long as the           mortgage itself  subsists. As  held by  the  Privy           Council in  Raghunath Singh’s  case, 61 IA 362 the           right  of   redemption  can   be  extinguished  as           provided in  S. 60,  T.P.  Act,  and  when  it  is           alleged to 698           have been  extinguished by  a decree,  the  decree           should run  strictly in  accordance with  the form

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         prescribed for  the purpose.  Unless the equity of           redemption is  so extinguished,  a second suit for           redemption by  the mortgagor,  if filed within the           period of limitation, is not therefore barred."      Therefore,  the   contention  made  on  behalf  of  the appellants that  as a final decree was passed in the earlier redemption suit,  there was a merger of the mortgage-debt in the  decretal-debt   and,  as  such,  the  second  suit  for redemption is  barred,  is  without  any  substance  and  is rejected.      We may  now consider  the second question as to whether the  rule   of  Damdupat   is  applicable   to  a   mortgage transaction. Admittedly,  it is  an equitable rule debarring the creditor  to recover  at any  given time  the amount  of interest which  is in  excess of the principal amount due at that time.  It is  urged by the learned Counsel appearing on behalf of the appellants that the rule is applicable only to a simple  loan transaction  and  not  to  a  transaction  of mortgage. We  are unable  to appreciate  this contention. In every mortgage  there are  two aspects,  namely (i) loan and (2) transfer  of interest in immovable property. As mortgage is principally a loan transaction, we do not find any reason why the  rule of  Damdupat which is an equitable rule should not apply also to mortgage.      It has,  however, been  held in Madhwa Sighanta Onahini Nidhi v.  Venkataramanjulu Naidu, ILR 26 Madras 662 that the rule of  Damdupat  is  inapplicable  to  cases  of  mortgage governed by  the Transfer  of Property  Act.  The  principal reason for the decision is that in section 2 of the Transfer of Property  Act, before  it was amended by the Amending Act 20 of  1929, it  was provided  "and nothing  in  the  second chapter of  this Act  shall be  deemed to affect any rule of Hindu law."  It was  inferred that as the rules of Hindu law were saved  only with  regard to  transfer  of  property  as contained in  the Second  Chapter, it  was  not  saved  with regard to the mortgages of immovable property and charges as contained in Chapter IV of the Transfer of Property Act.      A contrary  view was expressed by the Bombay High Court in Jeewanbai  v. Monordas  Lachmondas, ILR  35 Bom.  199. In that case,  it has  been held that it is not proper to infer that because  it has  been expressly enacted that nothing in Chapter II of the Transfer of 699 Property Act  shall be  deemed to  affect any  rule of Hindu law, the  Legislature has  deprived a Hindu mortgagor of the protection afforded to him by the rule of Damdupat.      The  Calcutta  High  Court  in  Kunja  Lal  Banerji  v. Narasamba Debi,  ILR 42  Cal. 826  has refused to follow the decision in Madhwa Sidhanta’s case (supra), clearly pointing out that  in that  High Court  the uniform  rule has been to disallow as  between Hindus’ interest larger that the amount of principal in making up a mortgage account.      In Bapurao  v. Anant  Kashinath, AIR 1946 Nagpur 210, a Division Bench  of the  Nagpur High  Court has held that the rule of  Damdupat is  applicable to  a mortgage, and that it does not in any way affect the provisions of the Transfer of Property Act  inasmuch as  it merely  prevents  recovery  of interest on the loan in excess of the principal.      Admittedly, the  rule of  Damdupat was never applicable to Madras.  It has  been  already  noticed  that  in  Madhwa Sidhanta’s case  (supra), the  principal reason to hold that the rule  was inapplicable  to  mortgages  governed  by  the Transfer of  Property Act  was that  in view of section 2 of the Transfer  of Property  Act, before it was amended by Act 20 of  1929, the  rules of  Hindu law  were not  saved  with

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regard to  mortgages of  immovable properties and charges as contained in  Chapter IV  of the Act. By the Amending Act 20 of 1929, section 2 has been amended and after such amendment it reads  "and nothing  in the  second chapter  of this  Act shall be  deemed to  affect any rule of Muhammadan law." The inference that  was drawn in Madhwa Sidhanta’s case (supra), from the  provision of section 2 about the non-applicability of the  rules of Hindu law including the rule of Damdupat to mortgages cannot  now be  drawn from  the amended  provision with regard  to any  rule of  Hindu law. Moreover, we are of the view  that the law was not correctly laid down in Madhwa Sidhanta’s case (supra), and the Calcutta, Bombay and Nagpur High Courts  have rightly  held in  the decisions  mentioned above that  the rule of Damdupat is applicable to mortgages. No other point has been urged on behalf of the appellants.      For the  reasons aforesaid,  the judgment and decree of the High  Court are  affirmed and  this appeal  is dismissed with costs quantified at Rs.3,000. S.L.                                  Appeal dismissed. 700