1. The opposite party 1 is the judgment-debtor in a mortgage decree upon whose application the first Subordinate Judge at Alipore ordered the decree to be re-opened under the provisions of the Bengal Money-Lenders Act, 1940, (hereinafter called 'the Act'). This rule was obtained by the petitioner, who is the decree-holder, against the decision of the lower Court. The relevant facts are follows : On 10th July 1925 opposite party 1 granted a mortgage upon his immovable property in favour of opposite party 2, as mortgagee, in consideration of a loan of Rs. 7500 carrying interest at the rate of 12 per cent, per annum with quarterly rests. In 1927 the mortgagee assigned the mortgage to the petitioner who paid Rs. 9500 for the assignment, which amount represented the principal sum and interest up to date. The petitioner thus became the assignee of the loan, the interest thereon up to the date of the assignment, and of the mortgage security. In 1929 the sum of Rs. 1700 was paid towards the mortgage debt by the mortgagor. In 1933 the petitioner filed a suit on the mortgage and a preliminary decree was passed for the sum of Rs. 15,000 with further interest and for Rs. 1338 costs. In 1935 the final decree was passed. In 1936 the mortgaged property was sold for Rs. 15,500, the petitioner being the purchaser, and a personal decree for Rupees 3178 was passed against the opposite party being the balance due under the mortgage decree, the personal decree reciting that the final decree was not satisfied to the extent of the above sum. The principal sum advanced being Rs. 7500, therefore Rs. 15,000 is twice the amount of the principal of the original loan. The opposite party is also liable for costs of the suit which was taxed at Rs. 1338 making a total of Rs. 16,338. The borrower has repaid a sum of Rs. 17,200, being the total of the amounts of Rs. 1700 and Rs. 15,500 which is Rs. 662 in excess of the above amount of Rs. 16,338. The relevant provisions of the Act which require consideration are as follows:
Section 28(1). Where any debt in respect of (i) a loan advanced by a lender, whether before or after the commencement of this Act, or (ii) interest on any such debt, or (iii) the benefit of any agreement made, or security taken, in respect of any such debt...is assigned to any person, the assignor...shall, before the assignment is made-
(a) give to the assignee notice in writing that the debt, interest thereon, agreement or security is affected by the operation of this Act.
Section 29(2). The provisions of this Act shall apply and be deemed always to have applied and shall continue to apply as respect's any debt due to a lender or money-lender in respect of loans advanced by him before the commencement of this Act or in respect of interest on such loans or of the benefit of any agreement made or security taken in respect of any such debt or interest notwithstanding that the debt or the benefit of the agreement or security may have been assigned to any assignee, and except where the context otherwise requires, references in this Act to a lender or money-lender shall accordingly be construed as including any such assignee as aforesaid.
Section 30. Notwithstanding anything contained in any law for the time being in force, or in any agreement:
(1) no borrower shall be liable to pay after the commencement of this Act-
(a) any sum in respect of principal and interest which together with any amount already paid or included in any decree in respect of a loan exceeds twice the principal of the original loan
(c) interest at a rate per annum exceeding in the case of (ii) secured loans, eight per centum simple.
Section 36(1). Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act applies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the borrower, it shall exorcise all or any of the following powers as it may consider appropriate, namely shall
(a) reopen any transaction and take an account between the parties;
(c) release the borrower of all liability in excess of the limits specified in Clauses (1) and (2) of Section 30;
(d) if anything has been paid or allowed in account on or after the first day of January 1939, in respect of the liability referred to in Clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid;
Provided that in the case of a loan to which the provisions of Sub-section (2) of Section 29 apply the lender or money-lender and each of his assignees shall be liable to repay the sum which the Court considers to be repayable in respect of, and in proportion to, the sum received by such lender or money-lender and such assignee;
(5) Nothing in this section shall affect the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide, and that he had not received the notice referred to in Clause (2) of Sub-section (1) of Section 28.
2. Subject to Section 29(2) it is common ground that the Act applies to the loan obtained by the opposite party as the borrower. Firstly as to Section 36(5) of the Act, the petitioner paid to the assignor Rs. 9500 as consideration for the assignment representing the amount both for principal and for interest at the rate reserved in the mortgage deed which was the total sum then due to the mortgagee assignor. There is no evidence, indeed nothing to suggest, that the assignment was anything other than bona fide and I am satisfied it was so. The assignment took place 13 years before the Act was passed and the notice required in Section 28(1)(a), was not and could not be given and the petitioner did not receive it. The sub-section exempts the provisions of the section from affecting the rights of 'any' assignee who complies with the requirements in Section 36(5). 'Assignee' is not confined to a person who obtained an assignment after the Act came into force or after any specified date as could have done had it been the intention of the Legislature to restrict the application of the sub-section to an assignee limited by date or otherwise. Whether an assignment is taken either before or after the passing of the Act, a bona fide assignee to whom the statutory notice has not been given is in the same position, when he has not received the notice.
3. The word 'any' makes it clear that the section is to apply to each and every such assignee. Whilst Section 29(2) provides that the Act shall apply to a loan advanced by a lender before the commencement of the Act notwithstanding it may have been assigned to an assignee, the sub-section further provides that except when the context otherwise requires reference in the Act to a lender shall accordingly be construed as including any such assignee. Section 36(5) being in the Act, effect must be given to it. The provision in Section 29(2) could only apply in every respect to every assignee by ignoring Section 36(5) altogether. In my view Section 29(2) applies except when other provisions in the Act (in this instance Section 36(5)) make it inapplicable. In Manmatha Nath Bose v. Sm. Renula Bosse ('41) 45 C.W.N. 1091 Sir Harold Derbyshire C.J. expressed the opinion that Section 36(5) applies to an assignee who became such before the Act; Nasim Ali J., in the same case took the opposite view. In Bhupendra Nath v. Debendra Nath Ash : AIR1942Cal370 Sen J. gave a finding in accordance with the opinion of Sir Harold Derbyshire, whilst Roxburgh J. in Krishnadhan Mondal v. Nalini Chandra ('41) 46 C.N.W. 388 expressed the same conclusion as Nasim Ali J.
4. I prefer the view and decision expressed by Sir Harold Derbyshire and Sen J., and hold that the provisions of Section 36 do not affect the rights of the petitioner as assignee of the debt and the mortgage security nor to the decree obtained by him. Consequently, the transaction cannot be re-opened. Other provisions of the Act do however apply. Section 30(1)(a) of the Act is clear that no borrower shall be liable to pay, in respect of the principal of, and interest upon, a loan, any sum exceeding twice the amount of the principal. Consequently, any amount in excess of double the principal sum is irrecoverable by the lender. This section has not a similar provision to Section 36(5); therefore by Section 29(2) 'lender' in Section 30 includes an assignee and he is in the same position as his assignor lender in regard to the provisions in this section. It was argued on behalf of the petitioner that unless and until a transaction is re-opened under Section 36 a borrower is entitled to no relief under the Act as this section enables a Court to re-open a transaction, take an account between the parties, and release the borrower from liability in excess of the limits specified in Section 30(1) and (2). No relief, it was contended, could be obtained unless a transaction is re-opened, as the provisions of Section 30 are subject to and are to be effected by the machinery in Section 36.
5. The process of re-opening is to enable the position between the parties to be ascertained by taking accounts (when that is necessary to be done), in order to discover either whether the borrower has discharged his liability or the amount remaining due in light of the provisions in Section 30. When, for example, a calculation of the rate of interest or investigation of the payments made, are required then relief cannot be given until the transaction is re-opened and these things have been done. When, however, it is apparent that the borrower has paid double the amount of the original loan there is no need to reopen the transaction and to take an account. In such event, Section 80 terminates the borrower's liability, as it enacts he is not liable to pay 11 anything more. This is quite apart from relief being given by the Court after it hag directed the transaction to be re-opened. There is nothing in Section 30 which makes its provisions subject to their being invoked under Section 36. There is no need for the borrower to do anything more than to show the sum he has paid is equal to or exceeds twice the amount of the principal of the original loan. Upon this being manifest the statutory provision immediately applies and his liability is, therefore, determined as Section 30 enacts he is not liable for any further sum.
6. It is common ground that the petitioner has received more than double the amount of the principal advanced by him; the opposite party's liability has, therefore, been discharged and the petitioner is prevented by Section 30 from recovering any further sum and from executing for any part of the personal decree for Rs. 8178. Section 86(1)(b) enables a Court to order the lender to refund any sum paid by a borrower in excess of the limit of liability prescribed in Section 30(1) and (2) but only in respect of payments made on or after 1st January 1939. The payments made by opposite party No. 1 were Rs. 1700 in 1929 and Rs. 15,500 in 1936 (the proceeds of the sale of the mortgaged property being equivalent to a payment by the borrower) both of which were before 1st January 1939. Even if Section 86 were applicable, the Court could not order repayment of any excess. The learned Subordinate Judge was wrong in directing the transaction to be re-opened and this rule must be made absolute. Opposite party No. 1 issued his application as the petitioner was threatening or was about to execute the personal decree, which he is not entitled to do. In those circumstances there should be no order as to costs. It is for the borrower to take such steps as are available to him if he considers his position requires protection.
7. I agree with the decision that has been given and have nothing to add save that adhere to the opinion that I expressed in Manmatha Nath Bose v. Sm. Renula Bosse ('41) 45 C.W.N. 1091.