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Kumar Pramatha Nath Roy and ors. Vs. Prativa Nath Roy and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1947Cal134
AppellantKumar Pramatha Nath Roy and ors.
RespondentPrativa Nath Roy and ors.
Cases ReferredJadu Nath Roy v. Jagatprasanna Mukherjee
Excerpt:
- .....rate of 9 per cent per. annum with yearly rests. 31-1-1923 was the date fixed for repayment of the mortgage loan. later on some properties were taken out of the mortgage security and others substituted in their place. large payments towards interest, but not covering the whole of the arrears, were made from time to time almost every year after 1921. a number of memoranda of agreements were thereafter executed by the mortgagor and the mortgagee. they have been marked exs. c, c(1), c(2), d and c(3). they are dated 26-1-1923, 6-9-1924, 24-4-1928, 28-3-1931 and 28-6-1933 respectively. roughly speaking the common feature of those documents is that the rate of interest was varied from time to time and the period for repayment of the mortgage loan was extended. the mortgage security and other.....
Judgment:

Mitter, J.

1. On diverse dates from 22.3-1918 to 21-1-1921 Raja Promoda Nath Roy of Dighapatia borrowed the total sum of Rs. 8,55,000 from Raja Sreenath Roy on the basis of several promissory notes. Raja Promoda Nath Roy and his legal representatives would hereafter be called the mortgagor or the borrower and Raja Sreenath Roy and his heir, Kumar Promotha Nath Roy, the mortgagee or the lender. Some of those loans carried 7 1/2 per cent, interest and others 9 per cent, interest per annum. Some interest was paid on those loans before 1921. On 31-1-1921 a sum of Rs. 8,88,496 was found due on those loans on account of principal and interest. On that date, the lender advanced a further sum of Rs. 8504 to the borrower, whose total indebtedness thus came up to Rs. 8,97,000. To secure that sum the borrower mortgaged his immovable properties to the lender by an instrument, Ex. A, dated 31-1-1921, stipulating to pay on the said sum compound interest at the rate of 9 per cent per. annum with yearly rests. 31-1-1923 was the date fixed for repayment of the mortgage loan. Later on some properties were taken out of the mortgage security and others substituted in their place. Large payments towards interest, but not covering the whole of the arrears, were made from time to time almost every year after 1921. A number of memoranda of agreements were thereafter executed by the mortgagor and the mortgagee. They have been marked Exs. C, C(1), C(2), D and C(3). They are dated 26-1-1923, 6-9-1924, 24-4-1928, 28-3-1931 and 28-6-1933 respectively. Roughly speaking the common feature of those documents is that the rate of interest was varied from time to time and the period for repayment of the mortgage loan was extended. The mortgage security and other terms and conditions of the mortgage (Ex. A) of 31-1-1921 were expressly kept in force and the security kept alive and intact. In most of them the amount then due on account of principal and interest were stated, the arrears of interest were capitalised, and the interest at the rates mentioned therein was made payable on the capitalised sum. In view of the contentions raised before us Exs. C, C(1) and C(2) only are material, as they are beyond 12 years of the initiation of these proceedings and the rest are not.

2. Raja Promada Nath Roy died on 18-7-1926. He had executed a will on 13-2-1926, which was duly proved. Raja Prativa Nath Roy, Kumar Sailesh Nath Roy, Rani Girija Kumari, Maharaja Srish Chandra Nandy and Mr. Mohendra Kumar Saha, are executors to whom probate has been granted. In their capacity as executors they made an application to the Court of Wards, Bengal, for placing the estate of the testator, the late Raja Promoda Nath Roy, in the charge of the Court of Wards. By notification No. 13477-W dated 23-9-1936 (published in the Calcutta Gazette on 29-10-1936 p. 1047 part II) the qua executors were declared disqualified proprietors on the basis of Section 6, Clause (e), Court of Wards Act (Bengal Act 9 [IX] of 1879) and the Court of Wards assumed charge of that estate named the Noakhila (Dighapatia) Wards Estate. On 8-10-1942 the manager of the Court of Wards acting as the next friend of the wards, namely, the said executors, filed an application in the Court of the Subordinate Judge, Bogra, against Kumar Pramatha Nath Roy, the son and heir of Raja Sreenath under Section 38, Bengal Money Lenders Act, 10[X] of 1940, (hereafter called the Act) for taking account of the loan. The procedure laid down in Section 51, Court of Wards Act, was followed. Two questions were raised before the Subordinate Judge, namely : (1) Whether the Act was ultra vires the Provincial Legislature, and (2) what is to be taken to be the 'principal of the original loan' for the purpose of declaring what was due and payable to the lender in terms of S..30 of the Act. On the second question the borrower contended that 'the principal of the original loan' was what had been lent on the aforesaid promissory notes plus further advances made in cash, that is Rs. 8504 advanced on 31-1-1921 and the Rs. 40,000 and Rs. 59155-8-9 advanced on two furtner promissory notes dated 8th January and 1st March 1931. The lender on the other hand contended that the memoranda of agreements, Exs. C to C 2, could not be reopened and the 'principal of the original loan' must be taken to be what was being treated by the parties as the principal of the loan in those documents. There would be a great difference in the amount due and payable if the one or the other contention be accepted. The-Subordinate Judge held the Act intra vires the Provincial Legislature. He totally overruled the contention of the lender on the second point and accepted in part the contention of the borrower on that point. He declared the sum of Rs. 4,56,515-12-6 was due and payable. Both the lender and the borrower have preferred appeals. The lender has, however, urged before us an additional point. That point was not taken in the lower Court nor in the memorandum of appeal. That challenges the legality of the notification by which the executors were declared disqualified proprietors. According to him if this point succeeds, the application made under Section 38 of the Act, which has been made in accordance with Section 51, Court of Wards Act, would have to be thrown out, for the executors would not then be 'Wards of Court' and so the manager of the Court of Wards could not have anything to do. In support of the contention that executors or trustees are not proprietors within the meaning of s.6, Court of Wards Act, in respect of the testator's estate or of the trust property many reasons have been advanced by the lender's Advocate. Some of those reasons may be weighty ones. We do not, however, think that the point should be allowed to be raised at the appellate stage.

3. The executors or any one of them could have filed an application under Section 38 of the Act. That is not and cannot be disputed by the lender. If the point that the executors were not in law 'Wards of Court', and so the manager appointed by the Court of Wards could not as their next friend move the civil Court had been taken by the lender as one of the points of objection in the Court below, that objection could have been met at once by the cause title of the application made under Section 38 being amended by the deletion of the words 'Wards of Court represented by the manager Naokhila (Dighapatia) Wards Estate' and by riling Vakalutnamas as executed by the executors. In fact as soon as this point was urged before us all the 5 executors filed applications before us to be allowed to b transposed as applicants in Misc. case No. 66 of 1942 which is the number alloted bye the Subordinate Judge to the application made to him under Section 38 of the Act.

4. All the five executors were made pro forma opposite parties to that application. One of them, Kumar Sailesh Nath Roy, appeared in his capacity as executor and filed an application in the lower Court on 22-7-1943. That application has been printed at Part I, pp. 30 and 31 of the paper book. He supported the application made under Section 38. If the objection now urged by the lender had been urged in the lower Court, the said executor could have asked the Court to treat his application as an application under Section 38 of the Act and to proceed on. Such a course would have been open as there was no question of limitation by reason of lapse of time. Just after the Court of Wards had assumed charge of the Naokhila (Dighapatia) Wards Estate after the publication of the notification made under Section 6(e), Court of Wards Act, it published a notice under Section 10A, Court of Wards Act, (Calcutta Gazette published on 29-10-1936, Part II p. 1047) requiring persons who had claims against the estate to submit their claims. In pursuance of that notice Kumar Promatha Nath Roy, the appellant, filed his claim based on the loan before the Collector of Bogra (Exs. 2-B and 4). He thereafter carried on correspondence with the Court of Wards and entered into agreements relating to the rate of interest with the Court of Wards representing the borrower. He received payments from the Court of Wards, through the Collector of Bogra, and granted receipts to the latter, the Collector being the principal officer of the Court of Wards in the District. He submitted statements of account which he is required to furnish by reason of Section 25 of the Act to the Manager of the Court of Wards. The relevant documents are Exs. G to G(6) and Ex. 2(a), the last being dated 9-6-1941. In these circumstances we think it would not be proper to allow this point to be urged before us, which so far as this case is concerned is only of a formal nature. On the merits there would not be any difference whether an application under Section 38 of the Act had been made in 1942 or be made today, for as we shall hold later on and the memoranda of agreements, Exs. C to C 3 and D, can be reopened, and even if the application under Section 38 of the Act had been made to-day none would have been protected by proviso (i) to Section 36(1) of the Act. The real points for consideration therefore are only those which had been urged before the lower Court and considered by it.

5. The word 'principal' in relation to a loan has been defined in Section 2(16) of the Act. It means the amount actually advanced unless repugnant to the subject. In, the case, however, where a transaction cannot be reopened by reason of proviso (i) to Section 36(1) of the Act the principal of the loan must be taken to be what is stated to be or treated as the principal in the document embodying the transaction which cannot be reopened, and so 'the principal of the original loan' for the purposes of Section 30 of the Act must be taken to be that amount, though it may be that it represents the total of what had been actually advanced plus arrears of interest due thereon calculated in terms of the previous transaction then closed. This has been laid down in Nripendra Chandra v. Abbas Ali : AIR1944Cal113 and Birabhadra v. Surendra : AIR1944Cal303 to which decisions both of us were parties. We therefore do not repeat the reasons which we had given in those cases.

6. We have also held in the last mentioned case, Birabhadra v. Surendra : AIR1944Cal303 that Section 36 including proviso (i) to Section 36(1) applies to proceedings under Section 38 of the Act and the relevant date for calculating the period of 12 years mentioned in that proviso is the date of the filing of the application under Section 38. We proceeded on that basis in Jadu Nath Roy v. Jagatprasanna Mukherjee : AIR1944Cal320 , where the proceedings were, as in the case before us, under Section 38 of the Act. The borrower can only say that the total amount actually advanced as loans on the several promissory notes executed between 22-3-1918 and 21-1-1921, and not the greater amount which has been treated as principal in the mortgage deed, Ex. A, dated 31-1-1921 is the 'principal of the original loan' within the meaning of Section 30 of the Act, if the said mortgage transaction can be reopened. It is beyond 12 years of the date when the application under Section 38 of the Act was filed. The point, therefore, is whether it had closed the previous transactions represented by those promissory notes and had created a new obligation. We are of opinion that it did, and so cannot be touched in view of the said proviso. On the date of that mortgage, those promissory notes were cancelled and endorsements made thereon stating that the amounts due thereunder were being included in the mortgage (Ex. A). The original promissory notes are Exs. 1 series. Thereafter no suit could have been instituted by the lender against the borrower on those promissory notes. Therefore the transactions or dealings represented by those promissory notes were closed by the mortgage of 31-1-1921. A new obligation was also created on that date by the execution of the mortgage deed. The principal of the original loan must therefore be taken to be Rs. 8,88,496 the sum treated as principal in the said mortgage deed, and not Rs. 8,55,000 (the amount lent on those promissory notes) plus whatever sums of money had actually been advanced by the lender to the borrower on and after 31-1-1921. Further, the loan is to be regarded as a loan on the said mortgage and so the provisions of the Act are not ultra vires the Bengal Legislature, as money lending, except on promissory notes, Bank of Commerce v. Kunja Behari is a Provincial subject (item 27 of List II, Government of India Act, 1935; Bank of Commerce v. Amulya Krishna Basu Roy . In view of the provision of Section 212 of the said Constitution Act of 1935 the last mentioned decision of the Federal Court is binding on us.

7. We have already pointed out the nature of the memoranda of agreements, Exs. C to C3 and D. Of them only Exs. C to C2 fall beyond 12 years of the date of the application under Section 38 of the Act. Those documents are exactly of the same nature as those which were considered in Jadu Nath Roy v. Jagatprasanna Mukherjee : AIR1944Cal320 , to which both of us were parties. For the reasons given in that judgment, we hold that the transactions represented by those documents are not protected from being reopened by the provisions of proviso (i) to Section 36(1). They have not closed the mortgage transaction of 31-1-1921 and have not created new obligations. The decision given in Jadu Nath Roy v. Jagatprasanna Mukherjee : AIR1944Cal320 has been approved by the Judicial Committee of the Privy Council, as in that case the application for special leave has been refused by that august body. The result is that both the appeals are dismissed with costs.

Akram, J.

I agree.


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