1. The question in this appeal, broadly stated, is whether a borrower is entitled to relief under Section 36(1), Bengal Money Lenders Act, 1940, in respect of a loan which was satisfied before the Act came into force. The facts were these. On 16th February 1924, the predecessor-in-interest of the appellant borrowed a sum of Rs. 4200 from the respondent on mortgage of two holdings within the Municipality of Dacca, stipulating to pay interest at the rate of Re. 1-4-0 per cent. per annum. In 1926 the appellant purchased the properties from the mortgagor subject to the mortgage, and thereafter wanted to redeem the same. The mortgagee, however, would not accept payment amicably, and this led the appellant to have recourse to the provisions of Section 83, T. P. Act. This section provides that at any time after the principal money payable in respect of a mortgage has become due and before a suit for redemption is barred, the mortgagor or any other person entitled to institute such suit may deposit, in any Court in which he might have instituted such suit, to the account of the mortgagee, the sum remaining due on the mortgage. On 27th February 1929, the appellant accordingly applied for permission to deposit a sum of Rs. 8720 in the First Court of the Subordinate Judge of Dacca to the credit of the mortgagee, stating that to be the sum still out-standing on the mortgage, including interest computed at the bond rate. Notice of the deposit was duly served on the mortgagee as required under para. 2 of Section 83. Notice was also given to the original mortgagor. Pursuant to the notice, the mortgagee applied for withdrawal of the amount deposited, and at the same time produced the mortgage deed in Court for return to the mortgagor. On 20th April 1929, the Court made an order on this application permitting the withdrawal, and also directing delivery of the bond to the appellant. The original mortgagor not objecting to the order, the money was in due course withdrawn by the mortgagee on 23rd April, 1929. The mortgage deed also appears to have been taken back by the appellant. The transaction, in these circumstances, was in fact finally closed between the parties, and also regarded by them as such. On 1st September 1940, however, there came the Bengal Money Lenders Act for the relief of borrowers, and as this enactment prima facie appeared to permit the re-opening of past transactions, the appellant apparently thought that he could obtain relief thereunder in respect of the mortgage, notwithstanding the aforesaid proceeding under Section 83, T. P. Act. To that end, as the first step, what the appellant did was to file an application on 6th February 1941, in the first Court of the Subordinate Judge of Dacca, praying for review of the order which the Court had made in that proceeding on 20th April 1929. It was alleged that an insufficient deposit had been made, and the proceeding was accordingly sought to be set aside as invalid in law, so as to revive the appellant's liability under the mortgage. This was an unusual application for a mortgagor to have made, but the object evidently was to lay the foundation for a claim to relief under the provisions of the Bengal Money Lenders Act.
2. That claim followed on the next day, 7th February 1941, and it was in the form of an application for relief under Section 36(1) of the Act filed before the Third Subordinate Judge of Dacca. The relief asked for was in terms of Clause (a) of Section 36(1), namely, that the mortgage transaction be re-opened and an account be taken between the parties. A further prayer was added asking for a declaration that a sum of RS. 2829-10-8 had been realised by the mortgagee in excess of the limits imposed by Clauses (1) and (2) of Section 30. There was also in effect a prayer for refund of this amount. The application was expressly based on the allegation that the mortgage debt was still outstanding; and reference was made in this connexion to the review petition whereby the appellant had in fact sought to establish this position. The review petition, it appears, had been summarily dismissed, but apart from that the Court found little difficulty in rejecting the appellant's contention. The order-sheet in the ease under Section 83, T. P. Act, was sufficient to show that the deposit made by the appellant had fully wiped out the liability under the mortgage. It could not be said, therefore, that the relationship of borrower and lender still subsisted between the parties, and the learned Judge accordingly held that the provisions of the Bengal Money Lenders Act were not attracted. In any view, it was added, there could be no question of any refund, as a refund could be allowed only under Clause (d) of Section 36(1), that is to say, if anything had been paid or allowed in account on or after 1st January 1939, which admittedly was not the case here. In the result, by his order dated 10th December 1941, the learned Subordinate Judge rejected the application. The appellant took an appeal to the District Judge, but this was summarily dismissed on 17th January 1942, on the short ground that no appeal lay against an order rejecting an application under Section 36(1), Bengal Money Lenders Act. It is against this decision that the present appeal has been preferred. The first question which arises is as to the competency of the appeal. We think the learned District Judge was right in holding that no appeal lay to him, and on the same ground a second appeal to this Court would be equally barred.
3. Section 36(1), Bengal Money Lenders Act, does not in terms speak of an application to be made by a borrower: all that it says is that relief may be given either in a 'suit to which this Act applies,' or in a suit which may be brought by a borrower for relief under the section. It is obvious, however, that in the former case the Court must be moved by way of an application. Where in a 'suit to which this Act applies' a decree has been already passed, Section 36(6) clearly indicates an application as the appropriate procedure: Clause (a) shows that such application may be made either in an execution proceeding under Sub-clause (i), or by way of review within one year from the date of commencement of the Act, under Sub-clause (ii): while Clause (b) contemplates an application in a pending appeal against the decree. Where a borrower brings an independent suit for relief under Section 36(1), the question of a right of appeal presents no difficulty. The suit must terminate in a decree, and such decree will be appealable under the provisions of the Code of Civil Procedure, if not under the Bengal Money Lenders Act, which in fact makes no provision for appeal. A first appeal will lie under Section 96 of the Code, with a further right of second appeal in some cases under Section 100. Where, on the other hand, relief is sought by way of an application, the question of an appeal will not admit of the same answer in all cases. Where, in consequence of the application, a decree is re-opened and a new decree made, an appeal will undoubtedly lie against the new decree, and where, again, the application is made in a pending appeal, an appeal will equally lie against the decree of the appellate Court.
4. Where, however, the application does not result in a decree, the position will be different. If the application is made in the course of an execution proceeding, as contemplated by Sub-clause (i) of Section 36(6)(a), the question will depend on whether the order made on such application can be said to come under Section 47, Civil P. C., a point which is now covered by authority. In Promode Nath v. Raseshwari ('41) 28 A. I. R. 1941 Cal. 530, since followed in Sailabala Dassi v. Harish Chandra De ('42) 46 C. W. N. 875, it was held by Mukherjea and Roxburgh JJ., that such order, whether granting or refusing relief, does not come within the purview of Section 47. Neither can the order be regarded as one made by the Court exercising jurisdiction as an executing Court, nor can it be taken to decide a question relating to the execution, discharge or satisfaction of the decree in respect of which relief is sought. If, on the other hand, the order is made on an application for review under Sub-clause (ii) of Sub-section (6)(a), the matter will obviously be governed by the provisions of Order 47, Rule 7(1), Civil P. C. That means that if the application is rejected, there will be no appeal, but if it is granted, there will be only a limited right of appeal as provided therein. It follows, therefore, that where an application for relief is rejected, whether in an execution proceeding or by way of review, in neither case will the order be appealable, and the learned District Judge was consequently quite right in the view he took. The learned Judge, however, overlooked that the real objection in the case was not so much as regards the competency of the appeal as about the competency of the application out of which the appeal arose. For one thing, there was no decree here, much less a decree in a 'suit to which this Act applies,' in respect of which an application could be made under Section 36(6)(a), either in a proceeding in execution of such decree, as laid down in Sub-clause (i) or by way of review, as laid down in Sub-clause (ii). Neither, as is more important to observe, was there a 'suit to which this Act applies' in which an application for relief could properly be made under Section 36(1).
5. Section 2(22), Bengal Money Lenders Act, contains the definition of such a 'suit.' The definition is wide enough to include not merely a suit proper but a proceeding, but whether it is the one or the other, there are two conditions which it must satisfy. The first is that it must be instituted or filed on or after 1st January 1939, or be pending on that date, and the second is that it must be a suit or proceeding of the nature specified in any of three clauses of Section 2(22), namely, a suit or proceeding either for recovery of a loan under Clause (a), or for enforcement of an agreement or security in respect of a loan under Clause (b), or for redemption of a security under Clause (c).
6. Admittedly, in this case there had been no suit or proceeding in respect of the mortgage other than the proceeding under Section 83, T. P. Act. This could certainly not come within Clause (a) or Clause (b) of Section 2(22). Supposing, however, it could in a sense be regarded as a proceeding for redemption of a security under Clause (c), it would still fail to come within the definition in so far as it had been instituted before the material date, the 1st January 1939, and was not pending on that date. By the application for review, the appellant had doubtless intended to revive the proceeding after 1st January 1939, so as to be able to say that even if it had not been instituted after that date, it was nevertheless pending on that date. We do not think, however, that the mere filing of the application could possibly have that effect. Nor could the application itself be regarded as a proceeding coming under any of the three clauses of Section 2(22). In no sense thus could the review application avail to bring into existence a 'suit to which this Act applies.'
7. An attempt was made before us to argue, on the strength of the decision in Horay Krishna v. Sashi Bhusan ('41) 28 A. I. R. 1941 Cal. 18 that even apart from the application for review, the case under Section 83, T. P. Act, must be deemed to have been pending, inasmuch as the deposit which had been made was insufficient and could not legally extinguish the liability of the mortgagor. This was in fact a renewal of the argument which had been put forward before the learned Subordinate Judge, but rejected by that Court. We have no hesitation in rejecting it as well. We agree that the order-sheet in that case furnishes a complete answer to the contention, and the case cited lends no support to it. That was a case, where notwithstanding the deposit by the mortgagor, and notwithstanding the willingness of the mortgagee to accept the deposit, the Court could not make the money available to the mortgagee, as it had been previously withdrawn by an unauthorised person. It was held in these circumstances that the deposit could not be effective under Section 83 to extinguish the security. The judgment, however, made it clear that the result would be otherwise where the mortgagee applied for and received the money in terms of the section. Section 83, T. P. Act, it will be seen, expressly requires the mortgagee, on receipt of notice of the deposit, to present a petition, stating the amount due on the mortgage, and expressing his willingness to 'accept the money so deposited in full discharge of such amount,' and it provides that upon such petition the mortgagee may withdraw the money.
8. The order-sheet in the present case clearly shows that there had been such a petition, and that it was thereupon that the mortgagee was permitted to withdraw, and then withdrew the amount deposited. The petition is not forthcoming, but there is no reason to suppose that it was not in accordance with the requirements of the statute. That being so, there can, in our opinion, be no doubt whether the deposit was in fact sufficient or not, that it had the effect of completely extinguishing the mortgage debt, and the proceeding as well as the transaction must accordingly be held to have been finally closed. Prom whatever point of view, therefore, we might look at the matter, there could thus be no escape from the conclusion that the application and the appeal filed by the appellant were both equally incompetent. Realising the difficulty, which really meant an end of the appeal, Mr. Surajit Lahiri, on behalf of the appellant, accordingly strongly urged that his client should not be denied relief on a technical ground of procedure, if he was otherwise entitled to it under the provisions of the Bengal Money Lenders Act. It was pressed upon us that the Court should have regard to the substance of the matter rather than to the form, and allow the appellant's application in this case to be treated as a suit for relief under Section 36(1) of the Act. This, it was contended, would not only render the appeal competent, but avoid all questions as to the maintainability of an application for relief in the absence of a 'suit to which this Act applies'. The appeal to this Court, it may be stated, had been filed on this basis as an appeal from appellate decree. In support of his prayer, the learned advocate pointed out that under Government notification the same court-fee had been prescribed both for an application and for a suit under Section 36(1), Bengal Money Lenders Act, and further, that under the Court-fees Act a suit included an appeal. There could thus be no material objection to allowing his client's application to be converted into a suit. Without deciding whether, in every case and at any stage, a borrower's application for relief might, at his option, be converted into a suit under Section 36(1), Bengal Money Lenders Act, we think we might allow the prayer in the present case and deal with the appeal as if it arose out of a suit. But while this might doubtless save the right of appeal as well as obviate the objection on the ground of procedure, it would nevertheless at once raise a more fundamental question, that of the appellant's right to relief, whatever the procedure he might choose to adopt. The fact remained that he was seeking to re-open a transaction which had already been closed and in respect of which there was no further liability enforceable against the borrower. The question would be whether in these circumstances he could at all claim relief under the Act.
9. This was indeed the crucial question in the case, and the reason why it had not been found necessary to consider it upon the view that the appellant had proceeded by way of an application, was that the application failed on other grounds. It would, however, be only reasonable to suppose that as regards the conditions of relief under the Act the Legislature could not have intended to make any distinction depending on the form in which relief was asked for. As a matter of fact, it will be observed that the scope and extent of the powers which the Court may exercise for the purpose of giving relief to a borrower are expressed in the same section and in the same terms, whether relief is given in a 'suit to which this Act applies' or in an independent suit. It is contended by Mr. Lahiri that the only limitation as regards transactions which may be re-opened under the Bengal Money Lenders Act is that imposed by Clauses (i) and (ii) of the proviso at the end of Section 36(1). Clause (i) prevents the Court from re-opening any adjustment or agreement, purporting to close previous dealings and to create new obligations, which has been entered into at a date more than 12 years prior to the date of the suit, whatever may be the meaning of the word 'suit'; while Clause (ii) takes away the power of the Court to do anything which affects a decree other than a decree in a 'suit to which this Act applies' which was not fully satisfied by 1st January 1939. It is said that subject to these limits, the Court may re-open any transaction and any account between the parties, as expressly provided in Clauses (a) and (b) of Section 36(1).
10. In this connexion, Mr. Lahiri also invites attention to a decision, to which one of us was a party, in Balai Chand De v. Akshya Kumar Seal ('44) 48 C. W. N. 596 in which it was held that the word 'liability' in Clause (c) of Section 36(1) cannot be taken to mean a liability subsisting at the date of the application or at the date of commencement of the Act. It will be seen at once that so far as Clause (ii) of the proviso to Section 36(1) is concerned, it clearly recognises as a necessary condition for the reopening of a decree the existence of a liability outstanding on or after 1st January 1939. That is also the effect of Section 36(6), which expressly provides for relief in respect of a decree in a suit to which this Act applies which 'was not fully satisfied by the first day of January 1939. The same condition is in fact implied in the very definition of a 'suit to which this Act applies,' which means a suit or proceeding instituted on or after 1st January 1939, or pending on that date. Obviously, a transaction in respect of which the liability has been fully satisfied before that date is outside the scope of such a 'suit' and necessarily, therefore, outside the scope of relief in such a 'suit'.
11. Clause (i) of the proviso to Section 36(1) no doubt seems to indicate on the face of it that relief is barred in respect of past transactions only if they were closed more than 12 years before the date of the suit, but it is to be noted that the clause speaks not of transactions generally, but of adjustments or agreements, purporting to close previous dealings and to create new obligations. Whether or not, in respect of such transactions, the 12 years' bar may be supposed to be the only bar to relief, it is quite clear that transactions by which previous dealings are closed and no new obligations are created, do not come within this clause at all. In other words, Clause (i) cannot be held to imply that where a transaction has been finally closed between the parties, it will not be liable to be re-opened, only if it was not closed more than 12 years before the date of the suit. Clause (i) is really a proviso only to Clause (b) of Section 36(1), which expressly confers the power to re-open any account already taken, notwithstanding any agreement, purporting to close previous dealings and to create new obligations. It follows, therefore, that neither clause of the proviso lends any support to Mr. Lahiri's wide interpretation of the scope of relief open under the Act in respect of past transactions. As regards Clauses (a) and (b) of Section 36(1), it is quite true, as Mr. Lahiri points out, that neither the word 'transaction' in Clause (a), nor the word 'account' in Clause (a) or Clause (b), is qualified in any way. But a transaction or an account is not re-opened merely for the sake of re-opening it. This is done for the purpose of attracting and applying the provisions for relief contained in the Act. One important relief provided for is contained in Section 30, which prescribes certain limits as regards the amount and the rate of interest recoverable in respect of a loan. A reference to the terms of Section 30, however, will show that it will apply only where there is still some payment due from the borrower after the commencement of the Act. Sub-section (1) of the section begins by saying, 'no borrower shall be liable to pay after the commencement of this Act,' and Sub-Section (2) also similarly provides that 'no borrower shall after the commencement of this Act, be deemed to have been liable to pay' etc. In either case, thus, a liability to pay after the commencement of the Act is assumed to exist: in other words, that means that it is only where there is a question of the borrower having to pay something after the commencement of the Act that the right to relief will arise.
12. It will, appear, therefore, that where a loan has been fully satisfied before the Act came into force, there can be no scope for the grant to relief in a suit under Section 36(1). This will no doubt be subject to any express provision in the Act to the contrary, and apparently in the case cited by Mr. Lahiri, Balai Chand De v. Akshya Kumar Seal ('44) 48 C. W. N. 596 Clause (d) of Section 36(1) was regarded as such a provision, though this was not stated in the decision. The suit there was one for relief in terms of Clause (d), that is to say, for refund of a sum which had been paid by the borrower in excess of the limits referred to in Clause (c), and it was instituted after the commencement of the Act. The loan had, however, been fully satisfied before the Act came into force, and upon that the contention on behalf of the creditor was that if effect was given to Clause (d), it would be going against Clause (c) inasmuch as it would amount to releasing the borrower of a liability which was not subsisting at the date of commencement of the Act. It was said that the word 'liability' in Clause (c) meant a liability subsisting at the date of the suit, at any rate, at the date of commencement of the Act. That construction was repelled, but the effect of the decision simply was that the word 'liability' could not be construed in a way which would defeat Clause (d). It should not be overlooked that though the loan in that case stood fully satisfied before the Act came into force, there was still a liability outstanding as on 1st January 1939, as ex hypothesi the payment by the borrower in respect of which the refund was claimed had been made, as in fact it was required to be made by the express terms of Clause (d), on or after 1st January 1939. This case, therefore, is no authority for holding that merely because no liability may be subsisting in respect of a transaction at the date of the commencement of the Act, it will come within the scope of relief under the Act, whether or not there was anything payable by the borrower on or after 1st January 1939.
13. If we are right in the view we have indicated above as to the scope of Section 36(1), it is obvious that the facts of the present case will not justify any relief to the appellant. The result is that the appeal must be, and is hereby, dismissed, but as there was no appearance on behalf of the respondent, there will be no order as to costs. We should like, in conclusion, to express our indebtedness to Mr. Lahiri for the very full and fair argument which he placed before us.
14. I agree.