MRINALINI DEBI Vs. HARLAL ROY

JUDGEMENT

(1.) This appeal arises out of a suit which was commenced on 18 September 1931 in the Court of the Additional Subordinate Judge at Alipore. It was an action for the recovery of a sum of money which comprised both capital and interest upon a mortgage bond and it may be stated at once that of the amount claime which was Rs. 3,238 odd the principal loan only amounted to Rs. 800. It was for an old debt going back as far as the year 1919, and the balance of the amount claimed was for compound interest at about 12 per cent. The learned Judge gave his judgment in the mon December, 1933. Then it went up to the lower appellate Court where the judgment was delivered in April 1934. From that judgment an appeal to this Court was preferred. The question of the rate of interest was the real dispute between the parties, and the judgment of the Court of first instance shows, and also the judgment of the lower appellate Court, which is a very short one, demonstrates that this question of interest was pressed very hardly upon both Courts, the provisions of the Imperial Act known as the Usurious Loans Act being prayed in aid by the original defendant. Now after the appeal was preferred an interesting position was created, because during the pendency of the appeal before the matter reached this Court, there came into force a local Act known as the Bengal Money-lenders Act of 1933, which was ordered to become operative on 1 July 1934, and it was then that the defendants realised that they had another weapon in their hands on this question of interest, because the provisions of this local Act in favour of the borrowers are even more advantageous than the Usurious Loans Act. Now what we have to decide here is whether the appellant is entitled to rely upon the provisions of this local Act having regard to the fact that when the respondents first launched the suit, the Act in question was not yet upon the Statute Book and was therefore not law operating in the borrowers favour. It is argued that we ought to apply in favour of the appellant Section 4, Bengal Money- lenders Act, which I think I ought to set out in full. It runs as follows: Notwithstanding anything in any other Act, where in any suit in respect of any money lent by a money-lender before the commencement of this Act it is found that the arrears of interest amount to a sum greater than the principal of the loan, the Court, unless it is satisfied that the money-lender had reasonable grounds for not enforcing his claim earlier, shall limit the amount of such interest recoverable in the suit to an amount equal to the principal of the loan.

(2.) That section is a part apparently of the scheme of the Act to benefit the borrowers. Other sections in the favour of those who have got into the hands of the money-lenders with regard to the reduction on interest are Sub-section 3, 5 and 6. I am also informed by the learned Advocate that there is a still greater advantage in favour of the borrowers under this local Act because in the Usurious Loans Act the onus of proving that the interest was harsh and unconscionable falls upon the borrowers. Here in this Act the reverse is the case, as the onus is upon the creditor to show that the interest which he has charged does not come into that category. It will thus be seen that it is extremely important from the borrower's point of view to ascertain whether in this particular class of case the operation of this Section 4 can be utilised to reduce the amount due to the lender. It is argued that it is however now settled law that in the peculiar circumstances of a case such as this, where the Act has come into forco after a suit has already been launched and after the decision has already been given in the Court of first instance, the Act cannot possibly be applied. The authority for that proposition is reported in Brojendra Kumar Dutta Roy V/s. Sushil Chandra Chakrabarty 1936 Cal 334. It was a decision of the Acting Chief Justice of this Court together with S.K. Ghose, J. Those learned Judges came to the conclusion that the Section was not applicable to a case such as we are considering now for various reasons. To quote from that judgment I may cite this passage. Now we do not find either in Section 4 itself or in any other section of the Act, anything which would indicate that any retrospective operation to the section was intended. And, in our opinion, the argument (that is the argument to the contrary) is entirely misconceived when it speaks of retrospective operation .

(3.) "The real question is" the learned Judges went on "whether at this stage, at the hearing of the appeal, the law which came into force during the pendency of the appeal on 1 July 1934 is to be applied to the case."