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Durga Sankar Sukul and ors. Vs. Prafulla Chandra Nag and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1947Cal294
AppellantDurga Sankar Sukul and ors.
RespondentPrafulla Chandra Nag and ors.
Cases ReferredIn Shannon Realities Ltd. v. Town of St. Michel
- k.c. chunder, j.1. this appeal is by the plaintiffs against a decree of the subordinate judge, 4th court, mymensingh, in a suit for recovery of money due from the defendants on a promissory note, ex. 1, dated 8th january 1927, for rs. 8225 as principal and simple interest at 6 per cent, per annum. the suit was filed on 27th october 1941, that is, after the bengal money-lenders act had come into operation. the promissory note in suit was the final result of a series of monetary transactions which began as early as 1915.2. on 1st november 1915, one kailash chandra nag borrowed rs. 800 with interest at 12 per cent, per annum by ex. d. again on 31st january 1916 he borrowed rs. 500 with interest at 12 per cent, per annum by a promissory note ex. d-1. kailash on 21st october 1920, borrowed.....

K.C. Chunder, J.

1. This appeal is by the plaintiffs against a decree of the Subordinate Judge, 4th Court, Mymensingh, in a suit for recovery of money due from the defendants on a promissory note, Ex. 1, dated 8th January 1927, for Rs. 8225 as principal and simple interest at 6 per cent, per annum. The suit was filed on 27th October 1941, that is, after the Bengal Money-lenders Act had come into operation. The promissory note in suit was the final result of a series of monetary transactions which began as early as 1915.

2. On 1st November 1915, one Kailash Chandra Nag borrowed Rs. 800 with interest at 12 per cent, per annum by Ex. D. Again on 31st January 1916 he borrowed Rs. 500 with interest at 12 per cent, per annum by a promissory note Ex. D-1. Kailash on 21st October 1920, borrowed Rupees 400 at 12 per cent, by Ex. D-2 and again on 3rd July 1921, he took a loan of Rs. 100 at 12 per cent, interest by Ex. D3. It appears that he then retired to Benares. He had four sons, Profulla, Suresh, Khitish and Bimal. On 20th October 1921, Profulla in renewal of Exs. D and D-1 executed a fresh promissory note, Ex. D-4, for Rs. 1300 at 12 per cent interest. On 26th January 1923 Suresh borrowed Rs. 500 at 12 per cent, interest by Ex. D-5. Kailash died on 2lst March 1923. Then all the four sons of Kailash executed on 5th November 1923, a promissory note for Rs. 4730 with interest at 6 per cent, per annum in renewal of the balance due under Ex. D-2,-small previous payments having been made. Then on 23rd June, 1924, Profulla and Suresh executed Ex. D-7 for a loan of Rupees 135 bearing interest at 9 per cent, per annum. On 14th October 1924, Profulla, Suresh and Khitish executed Ex. D-8, a promissory note in renewal of the balance due under Ex. D-4 which, as I have previously said, had been in renewal of the two earlier promissory notes, Exs. D and D-i. Then on 8th January 1927, all the four sons of Kailash who were defendants in the suit executed a promissory note, Ex. 1, which is the promissory note in suit in renewal of the previous existing promissory notes, Exs. D-5 to D-8 for Rs. 8225 with interest at 6 per cent, per annum*. It may be mentioned here that these facts are not in controversy any longer and further it is not contested that although some of the previous promissory notes were executed individually by different defendants they were for the joint purposes of all of them and that is the reason why the promissory note in suit Ex. 1 was executed by all. I have already said that the suit was filed on 27th October 1941. The suit was for the principal of Rs. 8225 and interest of Rs. 7275, that is for a total sum of Rs. 15,500. It may be mentioned here that neither the rate of interest nor the total amount is in contravention of Section 30, Bengal Money-lenders Act provided the principal is taken to be Rs. 8225. Rupees 23 had been paid as interest on different dates and thus limitation was saved in the present case and a small amount of Rs. 5-12-3 pies was relinquished by the plaintiffs.

3. The suit had been brought on the allegation that the consideration for Ex. 1 had been paid in cash, but the learned Subordinate Judge has found that no cash payment had been made and that Ex. 1 was in renewal of previous promissory notes. This finding of the learned Subordinate Judge has been accepted by the plaintiffs appellants. It may further be mentioned that the plaintiffs are money lenders by profession. The learned Subordinate Judge considered that previous dealings were not closed and new obligations created by the renewal of the promissory note and therefore proviso (i) to Section 36(1), Bengal Money-lenders Act, did not apply. So, he re-opened the transactions and considered that the plaintiffs were not entitled to more than Rs. 10, 800 from the defendants as the actual money advanced was Rs. 5,400. A payment of Rs. 74 by the defendants was accepted and the learned Subordinate Judge gave a decree to the plaintiffs for Rs. 10,726 with costs payable by the defendants in annual instalments of Rs. 800 plus an instalment for the balance, and the instalments were to fall due in Kartick every year.

4. The plaintiffs' principal contention is that proviso (i) to Section 36(1) applies to the pre-sent case as the transaction was more than 12 years previous to the suit. On behalf of the respondents it has been urged that proviso (i) to Section 36(1) is not applicable to this case as this relevant defence as to the amount of principal, that is, the money actually advanced, was taken in this case as a defence in the trial Court, and the question has not arisen, as in Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 on an application under Section 38 of the Act or in a proceeding taken by the borrower under Section 36 for obtaining relief. It is further said that in view of the provisions of Section 30 of the Act and some observations of the Judicial Committee of the Privy Council in Renula Bose v. Manmatha Nath it is not necessary to go into Section 36 at all.

5. A second line of argument has been that even if Section 36 applied to the present case, the proviso does not apply as the promissory note Ex. 1 does not come within that proviso. If this second question as to proviso (i) to Section 36(1) be answered in favour of the defendants, that is, if it is found not to be applicable to the present case, then the first question as to the applicability of Section 36 will not arise. So we take up this question first. Proviso (i) to Section 36(1) runs thus:

Provided that in the exercise of these powers (that is, the powers previously conferred upon the Court by Clause (1) of that section) 'the Court shall not re-open any adjustment or agreement, purporting to close previous dealings and to create new obligations, which has been entered into at a date more than twelve years prior to the date of the suit by the parties or any person through whom they claim.

6. This proviso has come in for decision many times in this Court and it is necessary to review the decisions to estimate the present position. In Jadu Nath Roy v. Jagat Prosanna Mukherjee : AIR1944Cal320 Mitter and Akram JJ. said:

It is clear that mere taking of accounts is not enough to attract the proviso. The adjustment must close previous dealings and create new obligations. Nor would a mere agreement to pay on the basis of the original obligation what is found to be the amount due on the taking of accounts be enough to attract that proviso, for the reason that it would not create new obligations.

Their Lordships go on to say:

We hold that the phrase 'purporting to create new obligations' used in the proviso covers only the case-where the original obligation undertaken by the borrower at the time of the loan is completely superseded and a substituted obligation created. Any other interpretation would defeat the object of the Act.

An obiter in that case is also helpful for our present purpose:

Where the agreement on the basis of which the original loan was given does not contain a stipulation for compound interest but later on the arrear of interest on the loan is by agreement between the parties added to the principal then outstanding and the borrower agrees to pay interest on it on the footing that it is to be the principal, this new transaction is certainly one which creates a new obligation, for it creates a completely substituted obligation on the closing of the previous dealings and so would come within the proviso.

In that case the learned Judges were concerned not with a renewed document of the character just mentioned but with an agreement which they found did not close previous dealings and create new obligations and the previous security and obligation were continued and not extinguished and substituted by the subsequent agreement relied upon.

7. In my view an obligation to pay is always implied from the fact of advance by way of loan. For considering proviso (i) for the purpose of applying the principle in Jadu Nath Roy v. Jagat Prosanna Mukherjee : AIR1944Cal320 the continuance of this implied obligation is not material. Otherwise, proviso (i) would be a dead letter, for that obligation remains throughout notwithstanding the execution of the new instrument in respect of the loan. For the application of the proviso what is to be considered is whether the obligations expressly undertaken by the borrower have been completely substituted by the express obligations freshly undertaken. In my opinion the decision in Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 where it speaks of the old and the new obligations refers to express obligations and not to the obligation to pay implied in every loan advanced.

8. In Madhusudan Pal v. Jnanendra Nath Reported in ('46) 33 A.I.R. 1946 Cal. 441 this question of the interpretation of proviso (i) to Section 36(1) was gone into at greater length by Mitter and Akram JJ. Their Lordships said:

An adjustment of accounts agreed upon by both the lender and the borrower may in a sense be taken to close previous dealings between the parties but that is not enough to attract the proviso, for that by itself does not create a new obligation. The subsequent alteration of any one of the terms of the original bond on which the loan was advanced in a sense may be taken to create a new obligation, for the contract so altered would certainly be different from the original one. But that by itself is not sufficient to attract the proviso. The proviso lays down two conditions namely, (1) the closing of previous dealings between the lender and the borrower and (2) creation of a new obligation and both those conditions must be the result of the transaction in order that it may be protected against re-opening by the force of that proviso.

That proviso however does not mean that that transaction must be an independent one-an absolutely new one unconnected with a prior transaction - for as the proviso creates an exception to the power of reopening, there must in every ease be some connection between that transaction and the prior transaction to which the Court will have to fall back if the former is re-opened. The idea of re-opening necessarily implies falling back upon a prior transaction, the connecting link between the two being the self-same loan. As the transaction which is to be protected against re-opening must fulfil both the requirements we have noticed above, it must have the effect of completely substituting the prior obligation to which the borrower desires to fall back upon by means of the re-openings.

9. In Nalini Mohan Roy v. Mukunda Chandra A.F.O.D. No. 13 of 1941, Mitter and Akram JJ., again held:

In order that proviso (i) to Section 36(1), Clause (a) may be attracted and the transaction represented by this promissory note, Ex. 5, may be protected, it is necessary that by that promissory note the previous dealings between the parties, namely, the borrowers and the lenders, had been closed and an obligation had been created.... The test is, as was pointed there, whether there is a complete substitution of the earlier obligations by Ex. 5.

10. In Bibhuti Bhusan Pal v. Mani Bala A.F.O.D. No. 237 of 1942 Sen and Dass JJ., referred to the decision in Jadu Nath Roy v. Jagat Prosanna Mukherjee : AIR1944Cal320 and further held that execution of a promissory note in lieu of another would create new obligations, but that case is distinguishable from the present one as the promissory notes in that case were executed in one case in favour of Triguna Prosad Pal Chaudhury and Hemangini Dasi and in the other in favour of Hemangini Dasi alone. Their Lordships said : 'This fact alone shows that the transaction was different and the cause of action was different.' Their Lordships pointed oat that there was creation of a new obligation, but it is very unfortunate that they used a technical expression like 'cause of action.' A fresh cause of action need not necessarily close previous dealings and create new obligations. When a fresh security is taken, but as a shield against intermediate mortgagees a prior mortgage security is kept alive, it has been held in repeated decisions of this Court, that there is no closing of previous dealings and creation of a new obligation as required under the proviso. If a fresh cause of action was the test, then the fresh security would give rise to such a fresh cause of action. Their Lordships based their decision upon the ground that in the case before them previous dealings had been closed and new obligations created. Therefore, their observations as to new cause of action should not be taken as laying down the test to be applied.

11. In Nripendra Kumar v. Santosh Kumar Das A.F.O.D. No. 73 of 1942, Mukherjea, and Blank JJ., said as regards this proviso:

The language used by the Legislature undoubtedly contemplates a ease where the adjustment or agreement extinguishes the previous obligation and replaces it by another or substituted obligation within the meaning: of Section 62, Contract Act. The whole contention, therefore, centres round the point whether the second mortgage in the present case rescinded or discharged the obligation created by the first and created a new obligation which would bring it within proviso (i) to Section 36(1), Bengal Money-lenders Act.

It seems to us to be settled law that whether a new mortgage bond is to be taken in lieu and in supersession of an old one depends entirely upon the intention, of the parties and the intention is to be gathered from, the facts and circumstances of each case.

12. This question of intention was subsequently gone into by Mitter and Akram JJ., in Madhusudan Pal v. Jnanendra Nath Reported in ('46) 33 A.I.R. 1946 Cal. 441 referred to before in which their Lordships said that it had been argued before them that

the question does not depend upon the intention of the parties but upon the legal effect of the later deed. The effect of a transaction embodied in a document which is the creation of the parties themselves must be determined by the terms of the instrument. For, the legal effect of an instrument involves two factors namely, (1) what is the agreement between them and (2) how far the law would recognise or give effect to their agreement. The intention of the parties must, however, be gathered from the language employed in the instrument, and where there is no ambiguity it is not permissible to refer to external circumstances, not even to-the conduct of the parties or their acting. It is only in cases of ambiguity that resort can be made to those sources.

13. It is clear from what I have said (sic and from) the decisions referred to that although an implied obligation remains through, out the proper test for the application of the proviso is whether the obligations expressly' undertaken by the borrower have been completely substituted by other express obligations undertaken and intention of the parties as gathered from the document itself and in case; of ambiguity, from other sources referred to before will have to be considered in this connection.

14. In the present case one fact which is not now controverted is that the previous promissory notes were all returned to the borrowers. Dr. Sen Gupta has argued before us that the renewal of a promissory note, which is a negotiable instrument, is a conditional discharge and it does not, therefore, completely substitute the previous obligation. For this he has relied upon Article 995, Halsbury's Laws of England, Edn. 2, Vol. II, p. 709, which runs thus:

Prima facie the giving of a new instrument in place of an existing one has the effect not of discharging the instrument then existing, but of being a conditional satisfaction of it, so that if the new instrument is duly paid at maturity the first instrument is discharged : but if not, then the dormant rights on the first instrument are revived.

15. Mr. Gupta has urged before us that the statement of the law in Halsbury is too wide when the authorities on which the same is based are examined. Halsbury refers to Ex parte Barclay (1802) 7 Ves. 597 In this case Lord Eldon said:

If two bills are dishonoured, and two others are given 'in lieu' of them, but the former are allowed to stay in the hands of the holder, that fact will give a construction to the words 'in lieu'; and the meaning will be only, in case they are paid.

It would appear from this decision that the former bills were allowed to remain in the hands of the holder and there was a clear intention that the subsequent bills will be in discharge of the previous ones only if the previous ones were paid. In the case before us the promissory notes were all returned.

16. The next case referred to is Dillon v. Rimmer (1822) 1 Bing. 100. In this case when a second bill was given, the first bill was not given up but retained in the plaintiff's possession. The second bill was paid when it became due but not the expenses of warrant of attorney whereupon the plaintiffs sued the defendants on the first bill. Dallas C.J. in that ease said:

This action ought never to have been brought : the second bill which was given in lieu of the first having been duly paid, there was not a shadow of reason for suing on the first bill, or for saying it was retained as a security.

This decision does not carry us any further and has only an indirect application to the matter before us.

17. The next decision cited is the case in Kendrick v. Lomak (1832) 2 C. & J. 405. In this case a second bill was given in renewal of the first, but before the second bill became due and without delivering it back, the plaintiff brought an action upon the first bill. It was held that he could not recover even the expenses of noting and postages. Other decisions, though not cited by Halsbury, may be cited in support of the statement of the Law in Halsbury, and they will be found collected by Byles on Bills of Exchange, Edn. 20, at p. 240. I may point out that there are also decisions which go to show that a subsequent promissory note may operate as a satisfaction of the whole of the former promissory note. Indeed, Halsbury begins with the word 'Prima facie.' There may be circumstances which go to show an intention of complete satisfaction and in such a case the previous promissory note would be completely discharged. Section 82(b), Negotiable Instruments Act is very wide and deals with cases other than those of cancellation and payment. The decision of the Judicial Committee of the Privy Council in Mascaronhas v. Mercantile Bank of India Ltd. that renewals may not be mere appendages to or continuations of the original security but in form and in substance new and independent obligations in substitution for the previous securities. Indeed, this High Court has consistently maintained that whether there was an agreement to substitute a new contract or not is a question of fact depending on the intention of the parties. One should look to the substance of the matter and not to the form. This was laid down in Khetranath Sikdar v. Harasukhdas Bal Kissendas : AIR1927Cal538 . In Har Chandi Lal v. Sheoraj Singh 3 A.I.R. 1916 P.C. 68 the Judicial Committee of the Privy Council held that

the intention of the mortgagee in that case after the two deeds of 1887 were executed was to accept in them a new security, but that intention was entirely frustrated by the fact that the deeds of 1887 were held to be not binding on the widow; and it was not in accordance with equity and good conscience that the respondents, who had successfully maintained that the transaction embodied in the deeds of 1887 was not binding on the widow and consequently did not bind them as the heirs of her husband, should now claim the benefit of that transaction as a release of the mortgage of 1876.

Therefore, it would appear that their Lordships of the Judicial Committee of the Privy Council, in view of the particular circumstances of that case, held on grounds of equity and good conscience that the previous transactions were not closed by the subsequent deeds although there was an intention to that effect. The importance of 'intention' in this connexion was not overlooked by their Lordships of the Judicial Committee.

18. I have previously said that an implied obligation to pay remains and proviso (i) to Section 36(1) would be a dead letter if that implied obligation did not so remain and it is the expressly undertaken obligation by the borrower which is to be considered for the application of that proviso. When the promissory note given is found defective for any reason and cannot be sued upon, one can then fall back upon the original loan. The reason for this is explained in Mohatabuddin Mia v. Mahomed Nazir : AIR1936Cal170 . Mitter J. in delivering the judgment of the Court said:

Sir Comer Petheram C.J. pointed out in Pramatha Nath v. Dwarka Nath ('96) 23 Cal. 851, where the observation of Garth C.J. in Sheikh Akbar v. Sheikh Khan ('81) 7 Cal. 256 was considered and explained that an implied contract to repay money lent always arises from the fact that the money is lent, even though no express promise, either written or verbal is made to repay it. The fact that money has been lent, therefore, gives a cause of action to the plaintiff which is independent of the promissory note. In my judgment as soon as the plaintiff in such a case proves that he paid to the defendant a sum of money by way of loan he is entitled to get back the money lent with interest, though the promissory note cannot be introduced in evidence on the ground of insufficiency of the stamp.

His Lordship in that decision referred also to other decisions of the Calcutta High Court in support of this statement of the law.

19. I am, therefore, of opinion that one line of cases is that a new negotiable instrument taken in renewal of old ones may not be enforceable against the parties named in it by reason of defects, e.g., want of proper stamps in promissory notes, or for other causes. In those cases the new promissory note does not discharge the earlier one which can be enforced in view of the implied contract to repay money lent. This proceeds upon the principle accepted by the Judicial Committee of the Privy Council in Har Chandi Lal v. Sheoraj Singh 3 A.I.R. 1916 P.C. 68 above referred to, - a case of renewed mortgage-but the principle is general as the other cases cited show.

20. In other cases it depends upon intention. A promissory note can be discharged by payment as well as by the execution of another promissory note if such has been the intention to be found from the facts.

21. Exhibit 1 does not expressly state that it is in substitution of an old note. It is an ambiguous document and the facts must be looked to. The relevant facts are that all the dues of all the earlier notes including the arrears of interest due were consolidated and one new promissory note was executed and in this connection the observation in Jadu Nath Roy v. Jagat Prosanna Mukherjee : AIR1944Cal320 already quoted should be remembered. Further the old notes were all returned to the borrowers. From these facts it can be inferred that the parties intended to give a go by to the earlier promissory notes. Under the circumstances, I hold that Proviso (i) to Section 36(1) would apply to the present case previous dealings being closed and a new obligation being substituted.

22. It has been urged by Dr. Sen Gupta that Section 36 is to be applied only to grant relief to the borrower. There is no question of re-opening any transaction or of closing old dealings in the present case, as this suit was brought after the introduction of the Bengal Money, lenders Act and Section 30 would allow the defendants to show what their actual liability is, i.e. what the principal or amount of money actually advanced was. Section 30 defines the extent of liability of the borrower. He points out a passage in the decision of the Judicial Committee of the Privy Council in Renula Bose v. Manmatha Nath of the report where their Lordships say:

The effect of this section is to afford a defence to a borrower as to the amount for which he is liable, and that is all that it does.

He further points out that their Lordships say 'Section 36, however, provides for the re-opening of past transactions.' I must point out that their Lordships do not say that Section 30 is sufficient when the transaction has to be attacked to get relief. In the present case, according to Dr. Sen Gupta, no past transaction need be re-opened but only the question of liability as determined under Section 30 i.e. the actual amount of money advanced need be taken into account.

23. Dr. Sen Gupta does not show how this is to be done except by impugning and ripping up the transaction of 8-1-1927 represented by Ex. 1 and by showing that in that document principal of previous loans and interest in arrears were consolidated. There are previous decisions of this Court on this point. In Nripendra Chandra Saha v. Mahomed Abbas Ali : AIR1944Cal113 Mitter and Akram JJ. said:

Ordinarily the principal of the original loan must be taken to be what had been actually advanced at the time of the first loan, not what has been regarded or treated by the parties as principal at the time of renewal. But that meaning must give way if it conflicts with proviso (1) to Section 36, Sub-section (1).

and their Lordships held that where proviso (1) to Sub-section (1) of Section 68 applied

the principal of the original loan 'contemplated by Section 30, would be the amount which was treated by the parties as the principal for the purpose of the said mortgage bond and not the money actually advanced by the decree-holder.

This case has been sought to be distinguished on the ground that in that case the mortgagors applied for relief under Section 36 and therefore it was not a case in which a decision on the general liability as to the actual amount advanced was in question but the decree had to be re-opened in terms of Section 36 and therefore the proviso to that section had to be applied. This attempted distinction does not touch the question of what is to be considered as principal of the loan in some cases, i.e. where proviso (1) to Section 36 applies.

24. The case Fateh Chand v. Akimuddin Choudhury 30 A.I.R. 1943 Cal. 1088 would show that although the principal has been defined as money actually advanced, there may be a notional advance. In Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 the decision in Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 referred to above, was followed and it was again pointed out that Section 2(16), Bengal Money-lenders Act (10 [x] of 1940) defines the term 'principal of the loan.' Unless there is anything repugnant in the subject or context it means the amount actually advanced to the borrower. Where, however, an agreement cannot be re-opened by reason of proviso (1) to Section 36(1) of the Act, the amount treated as principal of the loan by the parties in that agreement must be taken to be the principal of the loan.'

25. This case has again been sought to be distinguished on the ground that it was a case of an application under Section 38 of the Act which necessarily attracted the operation of Section 36. The cases in Nripendra Chandra Saha v. Mahomed Abbas Ali : AIR1944Cal113 and Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 referred to before, were again followed, as far as the question of the 'principal of the loan' is concerned, in Madhusudan Pal v. Jnanendra Nath Reported in ('46) 33 A.I.R. 1946 Cal. 441. That was also a ease in which Section 36 had necessarily to be applied. In my opinion proviso (1) to Section 36 has also to be applied to the present case to determine the question of the 'principal of the loan' and so the attempted distinctions are of no avail.

26. It is desirable to clarify the scope and mutual connection of Section 30 and Section 36 of the Act. A suit to enforce a loan pending on 1-1-1939, or instituted thereafter, as in this case, is covered by Section 36 (See Clause 1 of Section 36.) Section 30 defines in general terms the extent of liability, i.e., the extent of liability of a borrower whether he pays amicably or is made to pay by a decree of Court, and had there been no other provision in the Act, liability would have had to be determined under Section 30. But when a suit to enforce a loan is pending on 1st January 1939, or is instituted thereafter, the Court has been given power under Section 36, Clause (1) for the purpose of giving relief to the borrower if the principal and interest claimed in the suit on the basis of the contract contravenes Section 30. Otherwise, there would be no necessity to repeat the provisions of Section 30 in Section 36, Clause (l), Sub-clause (c). Where, in such a case, the instrument on which the suit is brought shows ex facie a particular sum as principal and the case of the borrower is that this amount is actual advance plus interest, the powers given by Section 36(1)(a) or (b) can be exercised by the Court. If the transaction as represented by the said instrument cannot be reopened in view of the proviso (i) to Section 36(1) and no relief can be given, then the principal must be taken to be what is stated therein as has been held in Birbhadra Chandra v. Surendra Prosad : AIR1944Cal303 , referred to before, and other cases. The definition of 'loan' as given in Section 2 would then have to be modified to prevent inconsistency and confusion. The 'principal of the loan' will, in such a case, be the amount treated as such by parties in their agreement and not the amount actually advanced.

27. It is a cardinal principle of interpretation that all the parts of the same statute must be taken into consideration together if that is possible. It was laid down by the Lord Herschell in J.C. Colquohoun v. Henry Brooks (1889) 14 A.C. 493 at p. 506:

It is beyond dispute, too, that we are entitled and indeed bound when construing the terms of any provision found in a statute to consider any other parts of the Act which throw light upon the intention of the Legislature and which may serve to show that the particular provision ought not to be construed as it would be if considered alone and apart from the rest of the Act.

Indeed as early as 1595 it had been laid down in Lincoln College's Case 3 Coke's Rep. 59b.

The office of a good expositor of an Act of Parliament is to make construction on all parts together, and not of one part only by itself.

Cockburn C.J. in Reg. v. Bishop of Oxford (1879) 4 Q.B.D. 245 at p. 261 said:

A settled canon of construction is that a statute ought to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant.

In Beal's Cardinal Rules of Legal Interpretation, Edn. 3, p. 343 the golden rule is given that

the grammatical and ordinary sense of the words is to be adhered to unless that would lead to absurdity or some repugnance or inconsistency with the rest of the Statute, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity, repugnance and inconsistence but no further.

In Shannon Realities Ltd. v. Town of St. Michel (1924) 1924 A.C. 185 the Judicial Committee of the Privy Council said at p. 192:

Where the words of a statute are clear they must, of course, be followed; but, in their Lordships' opinion, where alternative constructions are equally open, that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system.

28. It is clear, therefore, that all parts of the same statute must be taken into consideration together if it is possible and a construction which will make several parts consistent with each other should be preferred and for that purpose ordinary meaning of words may be either enlarged or restricted. Maxwell in his interpretation of Statutes at p. 19 thus puts it:

Nothing, it has been said by a great authority, is so difficult as to construct properly an Act of Parliament and nothing so easy as to pull it to pieces.... The literal construction, then, has, in general, but prima facie preference. To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act; to consider, according to Lord Coke : 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided; 3. What remedy-Parliament has appointed; and 4. The reason of the remedy.... Every clause of a statute should be construed with reference to the context and the other clauses of the Act, so as, so far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter.

In the light of such well-established principles I have construed the two sections, viz., Section 30 and Section 36 so far as necessary for the purpose of the present case.

29. The Bengal Money-lenders Act has for its aim as given in the preamble the making of further and better provision for the control of money-lenders and for the regulation and control of money-lending. After making suitable provisions for control of money-lending business, that Act in Section 30 deals with interest and other charges and lays down what the liability is in ordinary and general cases for principal and interest, and then for relief of borrowers, in Section 36, it provides for the reopening of transactions and in this connection it gives the Court power to reopen transactions up to a certain limit of time. There is nothing either repugnant or absurd or even hard in such time limit. It has been very well said by Story in his Conflict of Laws:

Laws limiting suits are founded in the noblest policy. They are statutes of repose, to quiet titles, to suppress frauds, and to supply the deficiency of proofs arising from the ambiguity, and obscurity or the antiquity of transactions... It has been said by Johm Voet with singular felicity that controversies are limited to a fixed period of time lest they should be immortal while men are mortal - No Autemlites immortales essent, aum litigantes mortales sunt. (Cited with approval in 8 All. 47523 at p. 483).

30. On the other hand, if Section 30 is not read with Section 36 of the Act in a case of this nature, then an absurd result will follow. When the borrower makes his application under Section 38 and an adjustment or agreement more than 12 years old cannot be reopened in view of Section 36 (1), proviso (i) or proviso (ii), and the declaration made in terms of Section 2 which will have the force of res judicata in a subsequent suit to recover the loan, has to proceed on the basis that the principal of the loan was not the actual advance but what was stated as the principal in that agreement; but in a suit brought on the same adjustment or agreement by the lender in order to determine the principal of the loan, the Court, according to Dr. Sen Gupta's contention, will be required ^o find out the actual money advanced going behind the adjustment or agreement, in a case where the borrower had not previously taken recourse to Section 88, and there will be two different inconsistent decisions. Two different amounts in respect of the same loan would have to betaken-the notional advance in the borrower's application under Section 38 read with Section 86, and the actual advance under Section 80 of the Act in the suit by the lender. This inconsistency must be avoided according to well-established rules of interpretation already mentioned.

31. I am, therefore, of opinion, after giving my careful consideration to the arguments urged by Dr. Sen Gupta, that Section 30 must be read in appropriate cases with Section 36, and where proviso (i) to Section 36(1) comes into operation as in the present case, the money lent is not the actual money advanced but, as decided in the previous cases of this High Court, the principal of the loan for all purposes will be the principal as stated in the agreement which cannot be reopened, that is, in the present case the amount as mentioned in the promissory note Ex. 1, and such amount may include arrears of interest consolidated with the actual sum advanced. The word principal in Section 30 is to be ordinarily taken to mean the money actually advanced but when in a case where proviso (i) to Section 36(1) protects an agreement the amount stated or treated as principal therein is to be taken as the principal.

32. The plaintiffs, are, therefore, entitled to succeed in the present appeal as the learned Subordinate Judge was not right in re-opening the transaction which was more than 12 years old in view of proviso (i) of Section 36, Clause (1) and, therefore, the decree of the learned Subordinate Judge will be modified and the plaintiffs would get a decree as prayed for in the appeal. No pendente lite interest is allowed. The principal is Rs. 8225 and only 6% interest on Rs. 8225 is claimed and allowed.

33. So the decree in appeal will be for Rs. 15,500 for principal and interest, as balance was given up. The plaintiffs will get full costs of the lower Court and only court-fees on memo, of appeal and paper book costs for this Court. Total amount is to be payable in 20 instalments. First 19 instalments at Rs. 900 each; balance in the last instalment. Decree will be in terms of Section 34(1)(b). Instalments already paid are to be credited towards earlier instalments.

Mitter, J.

34. As my learned brother has dealt with all the points exhaustively and has moreover referred to several judgments to which I was a party, I do not wish to add anything. I entirely agree with him.

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