1. The only point for decision in this case is one of rate of interest and the applicability of the Usurious Loans Act, 1918, as amended later, to the facts of the present case.
2. On 9-11-1915 Gian Singh mortgaged the property in dispute with possession in favour of Kanshi Ram for Rs. 600. On 19-12-1916 Gian Singh sold 2 kanals 12 marlas of land out of the land mortgaged to Mela Ram for Rs. 900. Mela Ram on 29-8-1945 filed the present suit against Thakar Das son of Kanshi Ram for redemption. One of the issues raised was as to the rate of interest which the defendant was competent to charge, and it was held that as the mortgage was previous to the Usurious Loans Act of 1918, the rate of interest chargeable was the stipulated rate of Rs. 1/8/- per cent. per mensem, and this decree was upheld by the first appellate Court. This was on 6-12-1947. The question of the rate of interest does not seem to have been argued in the Court of the District Judge although the question had been raised in the grounds of appeal. In the second appeal by the plaintiff the only question which has been canvassed for our opinion is one of interest to be awarded in view of the amended provisions of the Usurious Loans Act.
3. The first contention raised by the defendant-respondent is that the question of the applicability of the Usurious Loans Act was not raised in the first appellate Court and cannot be raised now. The answer to that is a very simple one, and that is that under Section 3(1) of the Act as amended in the Punjab for the word 'may' the word 'shall' has been substituted and therefore it is incumbent upon the Court to exercise the powers given under the' Act.
4. It is then submitted by Mr. Wadhera for the respondent that this Act can have no application because it applies to securities given after the commencement of this Act, which was in 1918, the mortgage being of 1915. It is necessary to examine the scheme of the Act. 'Loan' is defined in Section 2(2) to mean :
' 'Loan' means a loan whether of money or in kind and includes any transaction which is, in the opinion of the Court, in substance a loan.'
5. In Section 2(3) it is provided :
' 'Suit to which this Act applies' means any suit --
(a) * * *
(b) * * *
(c) for the redemption of any security given after the commencement of this Act in respect of any loan made either before or after the commencement of this Act.'
6. Section 3(2)(a) has been amended in the Punjab by Act 7 of 1934 as amended by Act 12 of 1940, and therefore in regard to mortgages the amount of interest shall be excessive if it exceeds 7 1/2 per cent. per annum. The question is whether this amended section is to be applied to a case of redemption. Mr. Gosain submits that under Clause (c) of Section 2(3) the Act applies to all loans whether made before or after the commencement of this Act and also to such securities which have been given in respect of any loan after the commencement of this Act, whether the loan was made before or after the Act, and that the word 'loan' includes a 'mortgage loan', because the definition of the word as given in the Act would cover it, and he further submits that if this interpretation is not given, i.e., if the Act is not applicable to redemption suits in regard to securities given before the Act, then there will be inconsistency between the wording of that section and Sub-section (3) of Section 3 which is as follows :
'3(3) This section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement or security in respect of a loan or for the redemption of any such security.'
7. Thereis a great deal of force in thissubmission. The words used in Sub-section (3) of Section 3 are that the section applies to any suit ifsuch suit is substantially ** *for the redemption of any such security. Ifthese words are to be interpreted in their literal sense then this Act must apply to the present suit also. The language used in Section 2(3)(c)can only be reconciled with Sub-section(3) of Section 3if this interpretation is accepted. In this connection I would like to quote a passage fromthe judgment of Denning L. J., at p., 164 ofthe report in -- 'Seaford Court Estates Ltd. v.Asher', (1949)2 All ER 155 :
'Whenever a statute comes up for consideration it must be remembered that it is notwith in human powers to foresee the manifold sets of facts which may arise, and, evenif it were, it is not possible to provide forthem in terms free from all ambiguity. TheEnglish language is not an instrument ofmathematical precision. Our literaturewould be much the poorer if it were. Thisis where the draftsmen of Acts of Parliament have often been unfairly criticised. AJudge,believinghimselftobe fetteredbythe supposed rule that he must look to thelanguage and nothing else, laments that thedraftsmen have not provided for this or that,or have been guilty ofsome or otherambiguity, it would certainly save the Judge's trouble if Acts of Parliament were dratted with divine prescience and perfect clarity. In the absence of it, when a defect appears a Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the social conditions which gave rise to it and of the mischief which it was passed to remedy and then he must supplement the written ward so as to give 'force and life' to the intention of the Legislature.'
8. The proper way of construction, to my opinion, is as pointed out by Denning L. J. These Acts have been passed to remedy an evil and are consonant with the prevailing social ideas which are against usury. If we accept the contention of Mr. Wadhera, it will come to this that if a creditor brings a suit for the recovery of a loan, the Usurious Loans Act will apply in the Punjab whether the loan was advanced before or after the commencement of the Act and if the mortgagee enforec-ed his mortgage the debtor would be entitled to get relief as provided by the amended Act in the Punjab, but if the debtor wishes to pay back the creditor and wishes to redeem his property he will not be entitled to get the relief which in my opinion is wholly inconsistent with the underlying idea of the Usurious Loans Act. The Legislature in the Punjab baa chosen to say that interest of more than 7 1/2 per cent. per annum on secured loans shall be usurious and it would not be in accordance with 'the social idea in the Punjab as express-ed by the Legislature to allow interest at a higher rate and thus to perpetuate the very evil which the Legislature wants to put ah end to.
9. I would therefore allow this appeal to the extent that the interest will be reduced from Rs. 1/8/- per cent. per mensem to 7 1/2 per cent. per annum, and interest calculated at this rate would come to Rs. 1,046/4/-. Thus, the decree will be reduced to Rs. 1,696/4/-, principal being Rs. 450/- plus interest Rs. 1,046/4/- and cost of improvements Rs. 200/-. In view of the circumstances of the case the parties will bear their own costs throughout.
10. I agree. It has been recently pointed out by the Supreme Court in -- 'S. V. Parulekar v. District Magistrate, Thana, Bombay', Petn. No. 86 of 1952, D/- 26-5-1952 that :
'It is duty of Courts to give effect to the meaning of an Act when the meaning can befairly gathered fromthewords used, that is to say, if one construction will lead to an absurdity, while the other will give effect to what commonsence would show was obviously intended, the construction which would defeat the ends of the Act must be rejectedeven ifthe sameWordsareused in the same section, and even the same sentence,havetobeconstrueddifferently,In-deed, the law goes so far ,as to require the Courts sometimes even to modify the grammatical andordinarysense of the words in bydoingsoabsurdityandinconsistency can be avoided: See the speech of Lord Wensleydale in -- 'Grey v. Pearson', (1857) 6 HLC 61at p.106, quoted with approval by the Privy Council in -- 'Narayana Swaml v. Emperor', AIR1939 PC 47; also -- 'Salmon v. Duncombe', (1886) 11 AC 627 at p. 634.The rule is set out in the text books: SeeMaxwell on the Interpretation of Statutes,Edn 9, p. 236, and Crates on Statute Law,Edn. 5, pp. 89 to 93. * * *Courts should not be astute to defeat theprovisions of an Act whose meaning is on theface of it, reasonably plain. Of course thisdoes not mean that an Act or any part of it,can be recast. It must be possible to spellthe meaning contended for out of the wordsactually used.'