KUNJA BIHARI NANDA Vs. KUSHA NAIK

JUDGEMENT

(1.) The scope and ambit of Sections 7 -C and 10 of the Orissa Money -lenders Act, 1939 (in short, the 'Act') fall for consideration in this application.

(2.) A brief reference to the factual aspects would suffice. Petitioner as decree -holder has lodged Execution Case No. 4 of 1988 which is pending in the Court of Subordinate Judge (now redesignated as Civil Judge (Senior Division), Champua. He has filed the Execution Case for realisation of Rs. 11,520/ - from Kusha Naik, the Judgment debtor. It is admitted that the decree -holder had advanced a sum of Rs. 3,000/ - to the Judgment debtor on the basis of a hand note executed by the latter. Money Suit No. 14 of 1978 was filed by the decree -holder which ended in compromise. Since there was failure to stick to the terms indicated in the compromise, execution case was filed. Stand of the Judgment debtor was that the decree -holder cannot realise any amount as interest, which is more than the principal. Stand of the decree -holder was that insertion of Section 7 -C to the Act did not make any difference, and protection afforded by Section 10 operated. The plea did not find acceptance by the learned Subordinate Judge as was then designated.

(3.) IN Section 7 -C and Section 10, the vital provisions read as follows : '7 -C. No money fender shall recover towards the interest in respect of any loan advanced by him, an amount in excess Of the amount of the principal.' '10. Maximum amount of interest which may be decreed and apropriation of excess interest towards loan - -(1) Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any contract, no Court shall in any suit whether brought by a money lender or by any other person in respect of a loan advanced before or after the commencement of this Act, pass a decree for an amount of interest for the period preceding the institution of the suit which, together with any amount already realised as Interest through Court or otherwise is greater than the amount of the loan originally advanced. - - - - (2) Whether, in any suit, as is referred to in Sub -section (1), it is found that the amount already realised as interest through Court or otherwise, for the period preceding the institution, of the suit is greater than the amount of the loan originally advanced, so such of the said amount of interest as is in excess of the loan shall be appropriated towards the satisfaction of the loan and the Court shall pass a decree for the payment of the balance of the loan, if any. (3) Where a decree passed by a Court on the 1st April, 1936 or thereafter on the basis of a loan remains unsatisfied in whole or in part on the date on which the Orissa Moneylenders (Amendment) Act, 1947 (Orissa Act XVII of 1947) comes into force, the Court which passed the decree or the Court or other authority to which the decree is sent for execution shall, on the application of the Judgment debtor, exercise the powers specified in Sub -section (2) and the decree shall be modified accordingly.' A reference in this regard to Section 7 -D of the Act is also necessary. The said provision reads as follows : '7 -D. Any loan in respect of which the money lender has realised from the debtor an amount equal to or more than twice the amount of the principal, shall stand discharged and the amount if any, so realised in excess of twice the amount of the loan shall be refunded by the money lender to the debtor. Section 10 contains the principle of damdupat. As indicated by this Court in P, S. N. Murty v. D. V. Suryanarayan : 32 (1966) CLT 264, the principle is not applicable to pendent lite interest.