1. The questions, referred to the Full Bench are:
(1) Whether Section 10, Orissa Money-lenders Act (Act III  of 1939), as amended by Section 4, Orissa Moneylenders Amendment Act (Act XVIII  of 1947), is retrospective so as to control decrees to be passed in suits and appeals brought before, bat pending at the time, of the commencement of the Amending Act; and
(2) whether in giving effect to the provisions of the section, in a suit based on an agreement by which the parties have agreed to treat the sum-total of the past liabilities, in respect of sum actually lent and the unpaid balance of interest due thereon, as the principal of a fresh loan-transaction, carrying stipulated rate of interest for the future, the Court can go behind the said agreement and limit the decree on account of interest, for the period preceding the institution of the suit, to a sum, which together with any amount already realised as interest, is not greater than the amount originally advanced; or
In other words, whether in such a suit, the debtor can be relieved of all liabilities in respect of capitalised interest due on accounts stated and agreed to be treated as principal or part thereof, notwithstanding an agreement to the contrary except so much as together with the amount realised does not exceed the amount originally advanced as a loan.
2. The first question admits of no answer other than one in the affirmative. The section, previous to its amendment, was applicable to suits or appeals pending at the time of the commencement of the Orissa Money-lenders Act, 1939. The text of the section standing by itself, may or may not lend support to this result. The words, having relevance to the, question of its prospectivity or retrospectivity, are 'no Court shall in any suit brought by a money-lender in respect of a loan..' Ordinarily, the words 'any suit brought by a money-lender', without anything more, would refer to suits, brought after the commencement of the section. But as the provision affects the power of the Court in passing a decree, the time of its operation is the time of passing the decree. That is a compelling feature in the section, which would make its application retrospective to the pending suits. The bare possibility of the prospectivity of the section, however, could not be ruled out. In this setting, the Legislature thought it fit to dispel all doubts and ambiguities, and enacted Section 16, which read:
The provisions of Sections 10 to 15 shall apply--
(i) to suits brought by money-lenders in respect of the loans advanced before the commencement of the Act and pending on the date on which the said section comes into force; and
(ii) to appeals and proceedings in execution arising in respect of decrees passed on 1st April 1936 or thereafter on the basis of loans whether such appeals or proceedings in execution were pending on, or instituted after, the date on which the said sections come into force.
It is too late in the day to controvert the proposition that by the combined operation of Sections 16 and 10, the remedial provision of the latter would control decrees to be passed in pending suits and appeals, as much as in suits and appeals, filed later than the Act.
3. The question that then arises for solution, therefore, is whether the amendment, which assigned wider import to the word 'money-lender', as it occurs in several sections of the Act including Sections 10 and 16, and introduced into their texts the words 'whether brought by money-lender or any other person', has any such effect as to bar its applicability to pending suits? I should answer this question in the negative.
4. The intention of the Legislature in making the import of the word 'money-lender' in Section 10 co-extensive with that of the same word in Section 16, by the same Amending Act (Orissa Act No. xvIII/47) and simultaneous introduction of the same set of words into the texts of both the sections is, manifestly enough, to make the amended Section 10 applicable to pending suits and appeals as before. It is argued with force and an amount of strenuousness by the learned Counsels, appearing for the plaintiffs-money-lenders in the aforesaid appeals, that retrospectivity of a statute is not to be presumed but must appear from indisputably clear and unambiguous words in it. In this particular case, I should say that the language, used by the Legislature, is so clear that the effect of retrospectivity in relation to the operations of the sections, under consideration, cannot be avoided without doing violence to the language of the enactment. I am clear in my mind that the language in the sections is not such as to lend support to the construction of their prospectivity only. The proposition should be clear if the two sections (Sections 10 and 16) in their amended forms are placed in juxtaposition. Section 10, as amended (after omitting such portions of it as are not relevant for the purpose), would read:..That no Court shall in any suit brought by a money-lender or by any other person in respect of a loan... pass a decree for an amount of interest... which is greater than the amount of the loan originally advanced.Section 16 likewise, after omission of the portions, not material for the present purpose, would read
(i) the provisions of Section 10 shall, so far as may be, apply to suits 'whether brought by a money-lender or by any other persons' in respect of loans and pending on the date on which the said section comes into force; and
(ii) to appeals arising in respect of decrees passed on 1st April 1936 or thereafter on the basis of loans whether such appeals or proceedings were pending on or instituted after the date on which the said sections come into force.
Section 10 mentioned wheresoever in Section 16 as amended must refer to 'the amended Section 10' according to the undisputed rule of reading of statutes. If the amended Section 16 expressly lays down anything, it is this, that the reliefs under Section 10 in respect of which there has been no variation in the amendment would be equally available to debtor-defend ants in suits, pending at the time of its commencement, 'whether brought by money-lender or by any other person'.
5. In reply, it is contended that the words 'brought whether by money-lender or by any other person' do not occur in Clause (ii) that deals with pending appeals.
6. The question arises whether this omission does evidence any different intendment (in case of appeals as distinct from suits) on the part of the Legislature, whose intention is to give reliefs to the debtors in all suits for loans irrespective of the plaintiff being a professional money-lender or not. Besides there was no justification for the Legislature to think that one rule should govern pending suits and another the pending appeals. Mere possibility of the existence or otherwise of Legislature's intention may not be sufficient test to accept or to reject a particular interpretation. But when the language is ambiguous and is capable of two meanings, the one that conforms to an avowed intention behind the Act is preferable. The said words have not been repeated in Clause (ii), as 'the words 'brought by money-lender' in Clause (i) of the section in its pre-amended form, had also not been reproduced. Without anything more, reading the section as a whole, the appeals referred to in Clause (ii) of the section must also refer to appeal from the suits of the descriptions mentioned in Clause (i). Clause, (ii) cannot be dissociated from the context of Clause (i) of the section.
7. There is another approach to the problem. Let us examine the language of Clause (ii) of Section 16, taken out of the context of Clause (i) of the section. It would read as follows:
Provisions of Section 10 'so far as may be' apply to appeals in respect of decrees passed on 1st April 1936 or thereafter on the basis of loans where such appeals were pending on or instituted after the date on which the said Section 10 comes into force.8. In this reading, absence of the words 'brought by moneylender or any other person' from the clause would make the applicability of Section 10 wider and would apply it to appeals in general, provided they are from decrees based upon 'loans' as defined in the Act. In order that the decree should be based upon a loan, it must have been advanced by a money-lender, which according to the wider meaning, assigned to it, by the Amending Act, should include 'a person' who advances money. The same result accrues though reached through a different avenue.
9. There are two other considerations which justify me in my view that whatever provisions are applicable to pending suits will be applicable to pending appeals: (1) One is that when an appellate Court disposes of an appeal, he either upholds or modifies or upsets 'the decree of the suit.' By doing so he, in substance, passed a decree in the suit. Take the instance of an appeal, say Second Appeal No. 18 of 1944. Suppose, the suit had been dismissed by both the Courts below as barred by time, and this Court in second appeal set aside that finding and remitted the case back to the trial Court for consideration on the merits. The trial Court at the rehearing shall not be competent to pass a decree in derogation of the provisions of the amended Section 10. Because, according to Section 16(1), the amendment would apply to pending suits. It would be anomalous or rather absurd to hold that instead of remanding it, if this Court proceeds to dispose of the suit, it could not pass the same decree as the trial Court would, at rehearing. In short, if it be accepted, as it must be, that amended Section 10 applies to pending suits, it must as well be accepted that it should apply to pending appeals. Appeals are filed in suits and hence are nothing but continuation of suits. Whether the subject-matter of a litigation is awaiting adjudication in a suit or in an appeal, filed in a suit, the 'Lis' is for all purposes of law and fact considered to be pending. (2) The second consideration is that the object of the Legislature is to divest the creditors of their preexisting rights, in order to grant reliefs to the debtors, in complete disregard of completed pre-Act transactions or agreements in respect of loans. In fact the provisions of the Act fly in the face of certain well-established principles of the law of Contract. Under such circumstances, unless there is anything in the language of the section compelling to the result of repugnancy or absurdity, every reasonable construction that will further the object in view shall be followed.
10. The law of the Orissa Money-lenders Act, in that it takes away or impairs rights vested agreeably to existing laws, is like every other ex-post-facto law. It is fundamental that such laws are retrospective in their operation.
11. As the construction of retrospectivity is sufficiently borne out by the words used by the legislature, it cannot be ruled out on the mere ground that the words may bear a different interpretation. It is one of the cardinal rules for the construction of Acts that they should be construed according to the intention of the Legisture that passed them. This canon is subject to the rule that the intention has to be determined from the words used: but in order to understand these words, it is natural to enquire what is the subject-matter with respect to which they are used and the object in view : vide Direct U.S. Cable Co. v. Anglo-American Telegraph Co. (1877) 2 A.C. 394 per Lord Blackburn. In the language of the statute under consideration, there is nothing to compel us to the result of prospectivity rather than that of retrospectivity in its application. The decisions of the Judicial Committee, delivered by Sir George Rankin, in the case of K.C. Mukherjee Official Receiver v. Mt. Ramratan Kuer and Ors. lays down a general proposition to the effect that where the Legislature expressly takes away vested rights of one and correspondingly bestows privilege or status on another by a legislation, that is always retrospective. In dealing with the retrospective character of Section 26 (n), Bengal Tenancy Act, as amended by the Bihar Tenancy Amendment Act, 1934, his Lordship observes:
Its provision is that every person claiming an interest as a landlord shall be deemed to have been given his consent to every transfer made before 1st January 1923. This is retrospective: the question is not whether general language shall be taken only in a prospective sense. The object of this section can only be to quiet titles which are more than ten years old, and to ensure that if during those ten years the transferee has not been ejected he shall have the right to remain on the land. Within this class the Legislature has not thought fit to discriminate against the tenants whose right is under challenge in a suit, a course which it may well have regarded as invidious or unnecessary. As substantive rights of landlords and their accrued causes of action were to be abrogated, respect for pending suits over old transfers cannot be assumed.12. In applying the aforesaid observations to the facts of the present case, it can be said that while abrogating the substantive rights of the creditors and their accrued causes of action that grew before the Act under construction the Legislature cannot be held to have adopted a course both invidious and unnecessary of discriminating against debtors whose right is under challenge in a suit or appeal. In that case, the Amendment Act came into operation while the landlord's decree for ejectment was under challenge in Privy Council, The Judicial Committee dismissed the plaintiff's suit and vacated the decree on confirmity with its retrospective operation. His Lordship made no distinction between pending suits and appeals.
13. To my mind, it is clear that there is nothing in the remedial provisions of the Orissa Money Lenders Act that would limit their operation to certain class of suits or proceedings only, It is apparent on the face of the Act that whenever the Court has to deal with the matter of enforcement of 'loans' except in case of decrees passed before 1st April 1936, he has to grant reliefs to debtors as provided in different sections.
14. In consideration of what I have said before, I have no hesitation in holding that Section 10, as amended, does apply to pending suits and. (appeals. I, therefore, answer the first question in the affirmative.
15. Next I shall address myself to the second question referred to the Full Bench. At the out-set, I shall advert to the contentions, raised by Messrs P.V.B. Rao and S.K. Ray appearing for the plaintiffs-creditors in the aforesaid appeals. Their contention, so far as I have been able to understand, is where the parties have arrived at an agreement, on accounts stated and adjusted, as to a certain sum being due on account of principal and interest arising out of an original sum advanced, the Court in order to give relief to the debtor cannot go behind the said agreement. This is, that the sum due as interest, once capitalised and agreed to be considered as 'principal' cannot be treated as interest due for the period preceding the suit for the purpose of this section. The contention can best be illustrated by reference to the facts of second Appeal No. 18 of 1944. In that case the original sum advanced was Rs. 700 in the year 1921. There were some payments towards interest thereon. In the year 1986, the parties adjusted their accounts and came to an agreement that the said sum together with the outstanding interest of Rs. 600 should be consolidated into and treated as 'the principal' for a fresh transaction amounting to a 'loan.' In pursuance of this agreement, a pronote for a sum of Rs. 1300 was executed. It was stipulated therein that the principal sum of Rs. 1800 will carry interest at certain rate. The claim in the suit, based upon this pronote, after crediting a payment on 23rd March 1939 towards interest of Rs. 3 is for recovery of Rs. 2200. It is contended that the Court cannot disallow the plaintiff a decree for the sum of Rs. 1300 though it can disallow so much of the interest accruing due on the said principal of Rs. 1300 as is in excess of Rs. 700 (the sum originally advanced). In other words, the Court cannot limit the decree to a sum less than Rs. 2000 instead of RS. 2200 as claimed.
16. The rival contention is that the said sum of Rs. 600 though included as a part of the principal still retains its character of interest and in this view, the plaintiff is entitled to a decree for RS. 700 being the principal sum originally advanced plus an amount towards interest which together with the sum realised as such would not exceed Rs. 700 the sum actually lent, or, in other words, the plaintiff shall not be allowed a decree for more than a sum which together with the sum realised as interest would make up double the amount actually lent, that is, RS. 1400.
17. The reasonings, advanced in support of plaintiff's contentions, are:
18. That there is nothing in the section enabling the Court to disregard the contract capitalising the interest into principal and to disallow any part of 'the loan' the basis of the transaction on which the suit is based. The Court's power of interference with the contract of the parties is limited to 'interest' accruing on the 'the said loan.' The power extends only to abridgment of the decreed interest to as much as together with the sum already realised will be equal to the sum actually lent. In this contention the word 'loan' in the passage 'in any suit brought by money-lender in respect of a loan advanced before or after the commencement of the act' refers to the transaction on a document bearing interest executed interest of past liability--the said transaction is evidenced by pronote for RS. 1300 in one case and a Bond for RS. 10,000 in the other. They say that the word 'loan' in above quoted passage and the 'loan originally advanced' connote two different things bat not one and the same.
19. The ratio of the contention is that as Section 10 (i) contemplates two kinds of loans, one must be the transaction and the other the sum lent, and the 'interest for the period preceding the suit' is the interest stipulated in the deed recording the transaction based on past liabilities. If this contention is given effect to the resultant decree would be not less than RS. 2000 representing the principal of RS. 1300 and an interest there on equal to the sum originally advanced, namely, Rs. 700. This argument precludes from consideration any interest realised before 'the transaction' referred to above.
20. Mr. Section K. Ray argues a slight differently that the interest realised both before and after the bond of Rs. 10,000 shall be taken into consideration in fixing the maximum sum to be decreed in lieu of interest.
21. Though the learned Counsel differ as to the mode of calculation of interest realised, the contention that the Court cannot disallow any part of the interest capitalised as principal in their respective agreements is common to both. As a whole, the contention turns upon whether the word 'loan' in Sub-section (i) of the section wherever it occurs refers to the sum actually or originally advanced or, as the plaintiff's counsel contends, the first 'loan' in the Sub-section refers to the written transaction amounting to 'a loan' and the other to 'the sum actually lent originally.' This contention takes me to the definition of 'loan' in Section 2 (i) which reads :
loan means an advance whether of money or in kind on interest made by money lender and shall include a transaction on a document bearing interest executed in respect of past liability and any transaction which in substance is a loan....In this definition, three kinds of transactions known as loans are contemplated. One is the loan which is advanced either in money or in kind by a money-lender bearing interest, the second is the loan constituted by a transaction in respect of a past liability and the third a loan by a transaction which in substance is a loan. Two of them are loans represented by a transaction and one is a loan by advancement. The crux of the plaintiff's contention as I have already said lies in that the Court's power of interference is confined to interest and as such does not extend to 'loan' in respect of which the suit is brought.
22. It is contended that as in the case of loan constituted by advancement of money or money's worth, so in the case of loan by transaction the legislature do not contemplate any relief in relation to the principal. Asked at the argument what then do the legislature mean by introducing the non-obstante clause 'notwithstanding anything to the contrary in any contract', the counsel said 'it has reference to the contract for higher rate of interest independent of any such limitation as is now sought to be introduced in the section.'
23. Next, attention of the learned Counsel being drawn to the use of qualifying or specifying phraseology 'advanced before or after the commencement of the Act' after the word 'loan,' they say that 'loan advanced' does not refer exclusively to 'sum lent' but includes sum agreed between parties to be treated as if advanced as a 'principal.' In this connection they pray, in aid, the use of the same phraseology or the like in other sections viz., Sections 8, 9, 12, 13, 18 (iv) and 22, and argue that if the words 'loan advanced' do not include 'loan contracted by way of renewal of past liabilities' the legislature's object to give relief to debtors in respect of all kinds of loan should be defeated. This is a very serious argument that carries some amount of conviction, but clearly enough it is not a sound argument. True, the best evidence of the legislature's intention is its expression in the Act by words used. But 'the words used' must be interpreted in their primary meaning, remembering that the primary meaning of a word varies with its setting or context and with the subject-matter to which it is applied; for reference to the abstract meaning of word, if there be any such thing, is of little value in interpreting statutes. There is another rule of interpretation which must also be borne in mind. The intention of the legislature, however obvious it may be, must, no doubt, in the construction of the statutes, be defeated where the language, it has chosen, compels to that result but only where it compels it. The stress is upon the words 'only where it compels it.'
24. The primary meaning of the word 'advanced' in relation to the monetary transaction is paid. 'Loan advanced' must, therefore, mean 'sum advanced as a loan' and not 'sum not actually advanced but deemed by an agreement as advanced.' The said words in Section 10 are followed by the words 'Before or after the commencment of the Act,' which denote the time of original advancement as there is no second advancement. Later in the same Sub-section 'Loan' is described as 'loan originally advanced.' The word 'advanced' in this setting cannot mean anything other than paid. It would be anomalous and unreasonable to argue that 'advanced' has been used in two widely divergent senses in the same section and with reference to the same subject. That the word 'loan advanced' does not include 'bond debts based on past liabilities' has been authoritatively laid down in the case of Mt. Surajbansi Kuer and Ors. v. Mt. Larho Kuar A.I.R.1946 pat. 310. No doubt the question arose in a case under the Bihar Money lenders Act, but that is a statute in pari materia with the Orissa Act. The definitions of 'loan' in both the Acts are almost identical. In this view the decision of that case is to the point. The dictum of Meredith J. in that case was:
section 4 can only be meant to apply to loans advanced after the commencement of the Act. The section as worded does not bar a Court from entertaining suits by unregistered money lenders for the recovery of all loans but only such loans as may have been advanced after the commencement of the Act. Under the definition in Section 2 (f) 'loan' may, no doubt, include a transaction on a bond bearing interest executed in respect of past liability, but the use of the word 'advanced' in Section 4, introduces repugnancy of contest, and so limits the application of the 'loan'.25. The next thing to be attended to is whether the act of attributing its primary meaning to the word 'advanced' bars the remedy of debtors who have entered into transaction and undertaken fresh liabilities in renewal of past ones. My answer to this is 'emphatic No.' In interpreting the section in its relation to the present controversy the key words are 'in any suit brought... in respect of loan advanced..' In my judgment it would be doing no violence to the language of the section to construe the language quoted above to mean or refer to suits based upon agreements that constitute a 'loan' within the Act; the agreement also includes the liability accruing from the 'original loan advanced.' The suit for enforcement of the agreement cannot be conceived of without reference to the source of the liability, that is, 'the loan advanced.' Such a suit based on a document executed in respect of past liabilities is a suit in respect of 'loan advanced' meaning 'the loan originally advanced' or 'sum actually lent.' Even if we take the extreme case of a transaction wherein, according to accounts stated and adjusted, the principal sum actually lent is wiped out as paid off and the document bearing interest is executed in respect of past liabilities of interest only, the suit based on it can be comprehended as a 'suit Drought in respect of loan advanced.' In order that the liability can be sustained as one for consideration the orginally advanced loans have very immediate connection with the transaction.
26. On the other hand, if we accede to the contention advanced the result would land us in absurdity. Take the case of a transaction of a document executed in respect of past liabilities that represent four times the sum actually lent, say, Rs. 2800 to Rs. 700. Obviously in a suit based on this document no relief worth the name can be granted to the debtor if the Court is powerless to touch any part of the 'agreed principal.' This would not only defeat the object of the legislation but it would be very easy for the creditor to circumvent the law. Here it would be worth quoting a passage from Gwyer C.J. in the case of Surendra Prasad v. Gajadhar Prasad .
But if the Advocate-General's contentions were correct,' I should find it difficult to understand why, in an Act plainly intended for the relief of debtors, money lenders should have been presented with so simple a method of circumventing it.I should for this reason be unwilling to accept his contention unless the language of the Act left me no alternative. In the aforesaid case Sir Sulaiman J. held
interest that accrues is not an advance of money but can become a loan if liability to pay is undertaken in a bond.The same learned Judge in construing Section 7, Bihar Money-lender's Act, a section corresponding to Section 10, Orissa Money-lender's Act, said
Indeed the section itself uses the word 'loans' and 'interest' in two different senses. When the same section talks of the amount of interest separately and aims at reducing it, it is reasonable to infer that the loan would not necessarily include the interest on it.27. Without deciding that the use of the same language in other( sections referred to in the contentions of the counsel would preclude from the benefit of the Act a large number of debtors liable for 'loans' as defined in the section, I should say bearing the object of the legislature, as defined in the preamble in mind it would not be wrong to prefer one meaning, conformable to such object of the word, to the other that frustrates it. I have very high authorities in view in support of this course, some of which I summarise below.
28. The rule with regard to the effect of a preamble on interpretation of an enactment has been well-settled in a long course of judicial pronouncements both here and in England. Earl of Halsbury in Powel v. Kemption Park Race-course Co. 1899 A.C.143 . Two propositions are quite clear, one that a preamble may afford useful light as to what a statute intends to reach, and the other, that if an enactment is itself clear and unambiguous no preamble can qualify or cut down the enactment. 'But still the preamble is the key to the statute and affords a clue to the scope of the statute, where the words construed in themselves without the aid of the preamble are capable of more than one meaning.' There is however another rule of warning which cannot be too often repeated, that you must not create or imagine an ambiguity in order to bring in the aid of the preamble or recital. To do so in many cases frustrates the enactment and the general intention of the legislature.
29. If very general language is used in an enactment, which it is clear must have been intended to have some limitation put upon it, the preamble may be used to indicate to what particular instances the enactment is intended to apply. The case of L' Apostre v. Le Plaistrier (1708) cited in Copeman v. Gallant 1716. Wms. 314 , turned upon 21 Jas. I, c. 19, Sections 10, 11 the preamble of which enacted :
and for that bankrupts frequently convey over their goods and yet continue in possession and dispose of them, be it enacted that if at any time hereafter any person shall become bankrupt and at such time shall by the consent and permission of the true owner have in their possession order and disposition, any goods or chatties... that in every such case the commissioners shall have power to sell and dispose of the same for the benefit of the creditors.The plaintiff had delivered to one Levi (who afterwards became bankrupt) a parcel of diamonds to sell for him and these diamonds were on Levi's bankruptcy seized by the defendants for the creditors, by virtue of this statute, as being goods in the possession of the bankrupt at the time of his bankruptcy. But it was held by Lord Holt that these diamonds were not liable to be seized as the property of bankrupt, and 'that the general words of the clause ought to be explained and limited by the words of the preamble, 'other goods'. This decision though not acquiesced in by Lord Cowper, was subsequently approved by Parker C.B., in Ryall v Rolle (1749 ATK. 165 ) when he said as follows:
It has been laid down on the contruction of 13 Eliz, c. 5 that the preamble shall not restrain the enacting clause. 'But I take it to be agreed, that if the non-restraining the generality of the enacting clause will be attended with an inconvenience the preamble shall restrain it' and this is the case here, for otherwise the merchants could not correspond or carry on their business without great danger and difficulty. And Lord Harwicke added : I am strongly inclined to be of opinion, with Lord Chief Justice Holt and my Lord Chief Baron Parker, that this clause is to be restrained by the preamble and differ from Lord Cowper in the case of Copeman v. Gallant : (1716. Wms. 314) So also in Brett v. Brett, 1823 Addms, 210. Sir John Nichell is reported to have held that, 'inasmuch as it dearly appeared from the preamble that 25 Geo. 2, c. 6, only profess to deal with wills and codicils devising real estate, the expression 'any will or codicil' whenever used in the Act meant only a will or codicil which he devised real estate, and in no way affected any will or codicil which bequeathed personalty. If the enacting words can take it in (the mischief which the statute was intended to remedy), they shall be extended for that purpose though the preamble does not warrant it Dean and Chapter v. Middleborough (1827) 2 Y & J 196.30. In the case of Winn v. Mossman (1869) 4 Ex. 292 Kelly C.B. said :
The words of the section no doubt large enough by themselves to give the penalties levied under the Act to the treasurer of the borough, but when we see from the preamble that the single object of the section was to provide for the one special case of granting licenses, the effect of the preamble is to control the enacting part of the section, and limit it to providing a remedy for the difficulty referred to as to the power to grant licenses.31. In the case of Thakur Raghuraj Singh v. Rai Bahadur Lala Hari Kishan Das . Lord Atkin delivering the judgment of their Lordships of Privy Council lays down;
The words of a remedial statute must be construed so far as they reasonably admit, so as to secure that the relief contemplated by the statute shall not be denied to the class intended to be relieved. * * * * But as the operation of a Relief Act is one of general importance it may be as well to point out that the object of all such Acts is to give relief from agreements made by the applicants whether under the laws relating to usury or otherwise, and that it cannot in ordinary circumstances be an objection to relief that the applicant is seeking to resile from the very agreement against which the law has expressly said he may be relieved.32. Applicability of the section to cases of loans which even in the remotest possibility, does not include or involve any sum actually lent is textually impossible. In such cases there is no 'loan originally advanced.' The Court in granting a decree for interest for the period preceding the suit, is unable to say if it exceeds such a loan.
33. In this view of the matter, the words 'loan advanced before or after the Act' and 'loan originally advanced' used in the section mean the same thing that is, the sum actually lent even though 'loan' is a general term and in. eludes all kinds of liabilities enforceable in law.
34. In this connection, my attention was drawn to the words ''suit for recovery of a loan advanced' in Section 8 of the Act and it was pointed out that in view of the object of the section the words may mean loans other than advances in money or in kinds But on reference to Section 18, Sub-section (4), it will appear 'suit for recovery of loan advanced' in Section 8 and 'suit in respect of loan advanced' in Section 18 mean the same thing; both the sections deal with the same subject of registration. As the different sections aim at securing different kinds of reliefs, it is likely that in some the word used is 'loan' without any limitation while in other 'loan advanced.'
35. There is however, another fact of the question. The plaintiffs' argument overlooks the definition of interest in Section 2(h) of the Act. It means rate of interest and includes the return to be made over and above what was actually lent whether 'the sum is charged or sought to be recovered by way of interest or otherwise.' According to it, even though the sum what was due 'as interest' on the sum actually lent 'is charged or is sought to be recovered otherwise than by way of interest' on account of its having been included as a part of the principal in the transaction sued upon, it is to be considered as 'interest' for the purpose of the section. If the Court disallows the sum so included, or reduces it, or any way includes it as a 'part' of the claim of interest he does not thereby disallow any part of the principal. The word 'principal' for the purpose of this Act has also been denned and it means in relation to a loan an amount actually lent to the debtor. A loan represented by transaction may in view of the aforesaid definitions be 'partly principal and partly interest.' In other words, a loan may mean principal and interest lumped together to constitute one liability for a transaction but the part representing 'interest' cannot be viewed as principal; it would amount to contravene the provisions of Section 2(i). In this view for the purpose of any relief to the debtor in respect of interest it would not be wrong to split up the 'transaction amounting to loan' into its component parts. In this context, even if it is assumed that the word 'loan' as it occurs first in Sub-section (i) means the transaction with includes an amount of interest for the period preceding the institution of the suit, the Court is bound to disallow a decree for this amount in case its allowance will make the decree for interest greater than the amount of the loan originally advanced.
36-37. As I have already said, the fact that sum due as interest on the sum actually lent is by a contract between the parties agreed to be treated as principal and is claimed as such does not make it the less an 'interest' within the meaning of the definition already quoted, it follows that interest on such interest deemed as principal would also continue to be 'return to be made over and above what was actually lent' and as such must also be held to be interest within the meaning of the Act.
38. The section lays down two terminii; one is the sum actually lent and the other is that the interest recoverable by the creditor whether already realised or outstanding which should not be more than the sum lent. In between these terminii if the parties by agreement have entered into various transactions converting unrealised interest into principal and stipulating that the said capitalised interest would carry interest on it, the transactions cannot according to the express provisions of the Act in Section 2(h) give a different complexion to the said sums than that of interest. If the Court respects the transactions as it is contended for by the plaintiffs' counsel, it gives a decree for more interest than it can under the provisions of Section 10 read with Section 2(h), which certainly is now beyond Court's power. It will be seen that this approach to the question obviates the necessity of interpreting the words 'loans advanced as loan actually advanced.' Though I have no doubt in my mind that when the legislature says 'loan advanced' it means that category of the three kinds of loans defined in the Act, which owes its existence to 'advancement that is, payment'. In short, 'the loan advanced' with reference to the subject dealt with in the section and in consideration of the context in which it appears means nothing more and nothing less than 'the sum actually lent.'
39. In the result I am decisively of opinion that the answer to the second question must be in the affirmative. The appeals should now go back to the Division Benches before whom they are now pending to be decided in the light of this decision.
40. While agreeing with my Lord the Chief Justice's judgment I would add the following.
41. I respectfully agree with the answers given to the questions referred to us and generally with the reasoning set forth in the judgment of my Lord the Chief Justice.
42. As regards the first point, the retrospective operation of the Orissa Money-lenders (Amendment) Act (Orissa Act XVIII  of 1947) appears to me to be an inevitable deduction from the following considerations: -- (a) Section 10 interpreted in positive language enjoins the Court to pass a decree involving a specified relief and has, therefore, reference to the condition of things as on the date of the passing of the decree; (b) Section 16 which makes Section 10 applicable to appeals enjoins a similar duty on the appellate Court; (c) Sub-section (3) of Section 10 (being the amendment introduced by Section 4(ii) of Orissa Act XVIII  of 1947) enjoins on the executing Court the duty of giving relief under Sub-section (2) of Section 10 in respect of a decree, or a loan remaining unsatisfied on the date of the amendment. It may be noticed that relief under Sub-section (3) is comprehensive and obtainable in respect of all unsatisfied decrees or loans. There is no restriction that the decree should be one obtained by a 'money-lender.'
43. It would be idle to contend, after the recent amendment by way of Sub-section (3) to Section 10 that relief under Section 10 may be obtainable in respect of all unsatisfied decrees or loans but that the same relief cannot be given by the decree in a pending suit or pending appeal unless the suit is one brought by a professional money-lender.
44. As regards the second point relating to the interpretation of Section 10, I agree that the terms 'loan advanced before or after the commencement of the Act' and 'loan originally advanced' in the section have the same connotation An 'advance' means 'a present payment of money or money's worth with a view to future reimbursement or return.' It may also be noticed that the words used in the section are 'a suit brought in respect of a loan advanced' and not 'in a suit brought on a loan' and it may legitimately be said that suit brought on a loan comprising original advance and capitalised interest is a 'suit in respect of' a loan advanced.
45. Apart, however, from any construction of the words 'loan advanced' and 'loan originally advanced' in the section, it appears to me to be perfectly Clear that if a Court passes a decree for the principal of the particular loan sued upon comprising the original advance plus capitalised interest it is passing a decree for an amount of interest for the period preceding the institution of the suit in respect of that portion of the decree which relates to capitalised interest. This necessarily follows from the definition of the word 'interest' in the Act. There is no warrant for reading the phrase 'interest for the period preceding the institution of the suit' as being limited by the commencement of such period from the date of the loan sued upon by which the interest has been capitalised.
46. A fair reading of Sections 10 and 11 makes it reasonably clear that the intention of the legislature was to give the relief to debtors on the old principle of 'damdupat.' It would not be right to defeat this apparent object of the legislature by any strained construction of the words used in the sections.
47. I agree with my Lord the Chief Justice.
48. I agree with my Lord the Chief Justice.