Section 67A mortgage bar rejected, while penal interest was reduced to the contractual rate and moderated thereafter

Section 67A of the Transfer of Property Act applies only where the same mortgagor has executed multiple mortgages capable of attracting the same kind of decree under Section 67; because the earlier mortgages were by both the appellant and his wife, while the later mortgage was by the appellant alone, the statutory identity of mortgagor was not met and the suit was not barred. The Court also treated the 12% contractual interest as unfair and penal, reducing it to 10 1/2% up to the preliminary decree and maintaining 6% per annum thereafter. The decree was otherwise left undisturbed.

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Issues: (i) Whether Section 67A of the Transfer of Property Act barred the mortgagee from suing on the later mortgage after having previously sued on other mortgages involving the appellant and his wife; (ii) Whether the stipulation for interest at 12% per annum was penal and liable to be reduced.

Issue (i): Whether Section 67A of the Transfer of Property Act barred the mortgagee from suing on the later mortgage after having previously sued on other mortgages involving the appellant and his wife.

Analysis: Section 67A applies only where the same mortgagor has executed two or more mortgages in respect of which the mortgagee is entitled to obtain the same kind of decree under Section 67. The earlier mortgages were executed by both the appellant and his wife, whereas the present mortgage was executed only by the appellant. The husband and wife could not be treated as one legal entity for this purpose, and the statutory condition of identity of mortgagor was not satisfied.

Conclusion: Section 67A did not bar the present suit, and this contention failed.

Issue (ii): Whether the stipulation for interest at 12% per annum was penal and liable to be reduced.

Analysis: On the terms of the mortgage deed and the surrounding circumstances, the higher rate of 12% was held to be unfair and penal. The original contractual rate of 10 1/2% was treated as the proper rate up to the date of the preliminary decree, while future interest was maintained at 6% per annum as directed by the trial court.

Conclusion: The interest stipulation was reduced to 10 1/2% up to the preliminary decree, with 6% per annum thereafter.

Final Conclusion: The appeal succeeded only to the extent of reduction of interest, but the decree was otherwise maintained.

Ratio Decidendi: Section 67A of the Transfer of Property Act applies only when the same mortgagor has executed multiple mortgages, and a penal or unfair contractual rate of interest may be reduced to the original reasonable contractual rate.

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