SM JAGATMAYA KUMRI Vs. MUNSHI RAM BAHADUR PRASAD

JUDGEMENT

(1.) This second appeal arises out of a suit instituted by the appellant to recover a sum of Rs. 2100 on the basis of a mortgage bond. This bond was admittedly executed by the defendant and his father on 11 August 1928, to secure a loan of Rs. 960 which wag to bear interest at the rate of Rs. 1-4 0 per cent, per mensem with yearly rests. It is common ground that out of the sum of Rs. 960 which is stated to be the amount of the loan under this bond a sum of Rs. 203 only was paid in cash and. the balance was set off against a previous debt which was due to the plaintiff under a mortgage bond executed in 1925 for a sum of Rs. 486. The plaintiff has stated in the plaint that a sum of Rs. 100 had been paid by the defendant towards the dues under the bond in suit on 25 June 1929, and a further sum of Rs. 800 had been paid by him on 30 September 1934. The plaintiff, after giving credit as to these two amounts, claimed that a sum of Rs. 2100 was still due to him and prayed for a decree for that sum.

(2.) The defendant contested the suit mainly on the ground that the interest was excessive and he was entitled to relief under the Bihar Money-lenders Act. Both the Courts below have upheld his contention and reopened the transaction under Section 8, Bihar Money-lenders (Regulation of Transactions) Act, 1939. The first Court, after making certain calculations, came to the conclusion that the plaintiff was entitled to a decree for a sum of Rs. 472; but the lower appellate Court found that there were certain errors in this calculation and it has awarded a decree to the plaintiff for a sum of Rupees 402-12-0. That Court, after showing that for the purposes of determining the amount to which the plaintiff is entitled, it must be held that the principal amounts should be the sum of Rs. 203 paid in cash on 11th August 1928, and the sum of Rs. 486 which had been paid under the earlier bond of 1925, observed as follows: The total amount of interest on Rs. 486 and Rs. 203 up to 30 September, when the repayments amounted to Rs. 900 came to Rs. 518 (Rs. 406 + Rs. 112). The repayments exceeded the amount of interest by Rs. 382 which went towards the payment of the principal reducing it to Rs. 307. Interest on this amount up to the date of the suit came to Rs. 90-4-0. The plaintiff, therefore, was not entitled to more than Rs. 397-4-0 on the date the plaint was filed. The amount which should have been awarded according to the defendant viz., Rupees 402-12-0 exceeds the amount allowable. As the defendant himself prays for a decree for Rs. 402-12-0 the amount cannot be further reduced.

(3.) The learned advocate for the appellant conceded in this Court that the Courts below were entitled to re-open the transactions under Section 8, Bihar Money- lenders Act; but he has pointed out that the learned Subordinate Judge who heard the appeal from the judgment of the trial Court has entirely overlooked the proviso to Section 8, Money-lenders Act. That proviso runs thus: Provided further if anything has been paid or allowed in respect of any liability for interest in excess of nine per centum simple per annum in the case of a secured loan and twelve per centum simple per annum in the case of an unsecured loan, nothing in Clause (a) or Clause (b) shall be deemed to require the creditor to repay any amount so paid or allowed in excess or to reduce the amount of the principal of the loan.