HARSUKDAS BALKISSENDAS Vs. DHIRENDRA NATH ROY

JUDGEMENT

(1.) This is a matter referred to this Bench under Chap. 5, Rule 3 of the Original Side Rules. It is an application by the defendants in Suit No. 1895 of 1936 of the original civil jurisdiction of this Court for relief under the Bengal Money-lenders Act, 1940. On 1 June 1936, the applicants executed certain documents in the following form. I will take the first document; they are all alike in form and date. Sixty days after date without grace we promise to pay to Messrs. Hursookhdas Balkissendass or order at Calcutta the sum of rupees two thousand five hundred only for value received.

(2.) Across that document was written "Accepted. Dhirendranath Roy, Girindranath Roy, Birendranath Roy". The document was executed on a paper on which is engraved the form of a stamp for Rs. 2-4-0. The upper part of the stamp bears the word "hundi". In all seven documents, similar to the one mentioned, bearing different amounts were executed on 1st June 1936. The total amount specified in the seven documents is Rs. 20,000. Apparently, those documents were not met at maturity although they were presented to the makers, with the result that a suit was brought on the original side of this Court by the plaintiffs against the defendants. The suit was brought under the provisions of O.37, Civil P.C., which provide for a summary method of obtaining judgment. In the plaint the instruments just mentioned were set out and it was stated that the plaintiff-firm's claim was against the defendants as drawers of the seven hundis drawn upon and accepted by the defendants themselves, payable to the plaintiff-firm or order at Calcutta. Paragraph 2 of the plaint alleges that the defendants verbally agreed to pay interest after the due dates at the rate of 12 per cent. per annum. Paragraph 3 alleges that the said hundis were duly presented for payment on the due dates, but were dishonoured. Paragraph 4 sets out the claim by the plaintiffs, the principal, namely Rs. 20,000 and the interest from the respective due dates up to 30 November 1936, at 12 per cent. per annum, such interest amounting to Rs. 933-10-8. The claim was for a decree for Rs. 20,933-10-8 interim interest, and interest on judgment. Though it does not appear that the claim for interest under the verbal agreement alleged was strictly within the provisions Order 37, Rule 2, yet a decree was passed by the Court against the defendants on 5 March 1937 for the sum of Rs. 21,261-9-10 with interest thereon at the rate of six per cent. per annum from the date thereof until realization. We are informed that a sum of about Rs. 5000 has been paid by the defendants, the applicants, to the plaintiffs under that decree.

(3.) On 1 September 1940, the Bengal Moneylenders Act, which had previously received the assent of the Governor-General, came into force. Under that Act a loan which is not secured by way of mortgage may not bear interest exceeding a rate of ten per cent. per annum, and further provisions are made enabling Courts to reopen unsatisfied decrees where the interest has exceeded the prescribed amount. If interest on the loan had been reckoned at ten per cent. only, it would have been less than the sum of Rs. 1261-9-10 which is included in the decree in respect of interest. Consequently, the defendants-the present applicants- made an application to this Court to have the decree re-opened and to be given such relief as they were entitled to under the Bengal Money-lenders Act. That relief as claimed would include a reduction in the decretal amount in respect of the interest accrued up to the time of the decree; it would also include the cutting out of the interest awarded from the time of the decree until realisation, and it would further include the alterations of the decree so as to make the decretal amount payable by instalments and not in one sum. Such relief was originally claimed. When the matter came before this Court the defence was raised that the Bengal Money-lenders Act, in particular, Section 34 (2), under which the relief was asked, was outside and beyond the law-making powers of the Bengal Legislature in that it purported to deal with loans evidenced by promissory notes. Promissory notes are mentioned in Item 28 of List I of Schedule 7, Government of India Act, 1935, and consequently it was contended that legislation with respect to promissory notes can only be undertaken by the Federal or Central Government and not by the Government of Bengal. We asked counsel for the applicants to satisfy us that the interest included in the decretal amount exceeded ten per cent. He did so, but he stated at the same time that it exceeded ten per cent. by such a small sum that it was not worth his while to ask for relief from the excessive interest which was contained in the decretal amount. He abandoned that part of his claim for relief and simply asked for the abrogation of the interest from decree to realization, and an order for payment of the decretal amount without interest by instalments. The Bengal Money-lenders Act in Section 2 (12), defines "loan" to be an advance, whether of money or in kind, made on condition of repayment with interest and includes any transaction which is, in substance, a loan but does not include amongst other things, (e) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, other than a promissory note.