JUGGANNATH ROY Vs. MADAN MOHAN BURMAN

JUDGEMENT

(1.) This is an application for relief under the Bengal Money-lenders Act in respect of a mortgage loan taken on 25 September 1926. The loan was for Rs. 3,00,000. There was the usual preliminary decree passed on 12 December 1930, and a final decree on 8 December 1931. Thereafter, various adjustments were recorded between the parties. The last adjustment was on l March, 1938, whereby it was provided that the interest would be calculated at the rate of 61/2 per cent. per annum if the amount fixed was paid in terms of certain orders previously passed. The plaintiffs agreed not to proceed in execution for six years from 1 April 1938. I may mention that the interest payable according to the terms of the mortgage was 91/2 per cent. per annum with quarterly rests. The defendants have now applied for relief under the Bengal Money-lenders Act on the grounds, firstly, that they have paid interest beyond the limits specified in Section 30 of the Act; secondly, that they are entitled to recover Rs. 5750 paid by them by way of capitalist commission; and thirdly, that they are not bound to pay more than twice the principal of the original loan. They claim that the decree should be reopened and a new decree passed in accordance with the provisions of the aforesaid Act.

(2.) Mr. Ghose, on behalf of the plaintiffs, agrees that the defendants are entitled to relief on the first and third grounds, that he contends that the defendants are not entitled to get back any sum which they may have paid by way of capitalist commission. He admits that some amount was so paid, but he does not admit that it would amount to Rs. 5750. Next, he says that although the defendants may get relief under the Bengal Money-lenders Act, it will not be necessary for the Court to re-open the decree and pass a new one. I shall take up for consideration, the second point raised by Mr. Ghose. There can be no doubt that the defendants are entitled to get relief with respect to the interest which they have paid in excess of the limits set out in Section 30, Bengal Moneylenders Act. They are also entitled to claim that they shall not be liable to pay more than twice the amount of the principal of the original loan. Now, in order to give them these reliefs, I am of opinion that the decree passed in the suit must be re-opened. I am unable to appreciate how these reliefs can be granted without altering or affecting the decree passed; and if the decree passed has to be altered, then it must first be reopened. I have expressed my view on this question in two previous decisions : Suit No. 1680 of Mritunjoy Roy V/s. Netai Chand Dutt Reported in and Civil Revision case No. 257 of Anath Nath Sarkar V/s. Rajendra Nath Bhattacharjee . And I do not propose to deal in greater detail with this point. I hold that the decree must be re-opened. The next point for consideration is whether the defendants are entitled to claim the return of Rs. 5750 or any sum which they may have paid by way of capitalist commission. This claim is based on Section 33, Bengal Moneylenders Act, which is in the following terms: Any agreement between a lender and a borrower or intending borrower for the payment to the lender of any sum on account of costs, charges or expenses incidental or relating to the negotiations for, or the granting of, the loan or proposed loan, shall be illegal, and if any sum is paid to a lender by the borrower or intending borrower as, for or on account of any such costs, charges or expenses, that sum shall be recoverable as a debt due to the borrower or intending borrower, or in the event of the loan being completed, shall, if not so recovered, be set oft against the amount actually lent and that amount shall be deemed to be reduced accordingly.

(3.) Mr. Ghose argues that retrospective effect to the section should not be given inasmuch as there is nothing in the section which indicates that such effect was intended. He points out that there are words in the section which indicate that only such agreements were contemplated in the section as were entered into between a borrower and a lender after the Act came into force. Mr. Banerji, on the other hand, contends, that there are no words in the section which would justify the Court in holding that it applied only to the agreements entered into after the Act came into force and he suggests that the section applies to agreements whether entered into before or after the Act came into force. In support of this contention he refers me to the case in West V/s. Gwynne (1911) 2 ch.D. 1 at pp. 11, 12 and 13. I need hardly state that in construing an Act the Court should not give it a retrospective effect unless such an intention is clear from the words of the Act. An agreement between a lender and a borrower, pursuant to which a sum is to be paid to the lender on account of costs, charges, or expenses incidental to the negotiations for the loan was a perfectly valid agreement before the Act came into force. If the Legislature wished to reopen a prior agreement which has already been performed then it should have clearly said so. I can see no reason why I should hold that an agreement already performed which was perfectly valid and legal before the Act came into operation should after the Act be considered as having been illegal.