1. These two appeals, the first by the mortgagees and the second by the mortgagors, arise in a suit to enforce a mortgage dated 3rd March 1917. The suit was instituted on 23rd December 1929 for the sum of Rs. 11,197, which represented the principal, as stated in the mortgage bond, and interest calculated up to the date of the institution of the suit at the rate provided for in the mortgage bond. The preliminary decree was passed on 9th July 1930 and the final decree on 8th November 1930, for a sum of Rs. 12,818-4-0, which included Rs. 1124-6-0 awarded as costs. There were some infructuous applications for execution. The last application for execution in the course of which the questions involved in these appeals arose, was made on 27th January 1937. This application was stayed for a time by the Debt Settlement Board, but ultimately the stay lapsed, as the debtors' application to the board made under Section 8, Bengal Agricultural Debtors Act was dismissed. This application for execution was pending when the Bengal Money-lenders Act, 10 of 1940, came into force. The mort-gagors thereafter applied for relief under Section 36 of the last mentioned Act, which will hereafter be referred to as the Act. The learned Subordinate Judge has allowed the application. He has re-opened the preliminary and the final decree passed on 9th July and 8th November 1930 respectively, and has passed a new preliminary decree for Rs. 6961, for the principal and interest calculated up to 22nd February 1941, the date of the new preliminary decree. He has awarded Rs. 698 odd as costs. The total amount, namely Rs. 7659-12-4 has been made payable in five equal yearly instalments, the first of such instalments being made payable in chaitra 1847 B.S. The decree has further provided that in default of payment of any instalment, the instalment unpaid will be recoverable in terms of Section.34, Sub-section (1), Clause(b) of the Act. In making the new decree the learned Subordinate Judge has taken Rs. 3781 to be the principal of the 'original loan.' He accordingly held that Rs. 3781 only was recoverable as interest and as Rs. 600 had been paid by the borrowers towards interest, the decree was made for Rs. 6961. Both parties have preferred appeals against his decree.
2. The material facts are as follows: Defendant 1, Abbas Ali and Dulal Bepary, the predecessor of the other defendants, had borrowed from time to time sums of money on simple bonds from the plaintiffs' predecessors, Hriday Chandra Saha Chowdhury and Bepin Chandra Saha Chowdhury. For securing the monies due on account of the principal and arrears of interest due on those simple money bonds the mortgage in suit (Ex. l) was executed on 3rd March 1917 by Abbas Ali and Dulal Bepary in favour of Hriday Chandra Saha Chowdhury and Bepin Chandra Saha Chowdhury. The mortgage bond recited that the mortgagors had in the past taken the following sums of money on executing simple money bonds:
(1) Rs. 3000 on 10th Kartiok 1320 B.S.
(2) Ra. 200 on 21st Kartiok 1320 B.S.
(3) Rs. 100 on 22nd Kartiok 1320 B.S.
(4) Bs. 100 on 29th Magh 1321 B.S.
(5) Bs. 50 on 5th Magh 1322 B.S. and
(6) Rs. 143 on 11th Jaista 1322 B.S.
Total Rs. 3593.
3. The mortgage bond further recited that after crediting payments made towards principal and interest and after remissions the sum of Rs. 4484 was then due on the simple money bonds. A sum of Rs. 188 was advanced in cash at the date of the mortgage bond. The sum total of Rs. 4484 + Rs. 188, namely Rs. 4672 was agreed upon as the principal on which simple interest at the rate of 12 per cent, per annum was made payable. The mortgagees admitted before the learned Subordinate Judge that the borrowers were entitled to relief. The learned Subordinate Judge has also held that they are entitled to relief The principal controversy before him, and before us, is, what must be taken to be the 'principal of the original loan' for the purpose of passing the new preliminary decree: whether (1) the sum of Rs. 4672 which was treated as principal in the mortgage bond or (2) Rs. 3593 + Rs. 188=Rs. 3781 or (3) a sum less than Rs. 3781. Before the learned Subordinate Judge the borrowers contended that Rs. 3593 had not been actually advanced by the lenders on the simple money bonds but a lesser sum, inasmuch as the simple money bond for Rs. 3000 item 1 recited in the mortgage instrument, was a renewed bond. They led evidence in support of their contention on the point. The mortgagees on the other hand said that as the mortgage transaction cannot be re-opened in view of proviso 1 to Section 36, Sub-section (1) of the Act, it being beyond twelve years 'of the suit,' the principal must be taken to be what has been agreed upon by the parties in the mortgage instrument, namely Rs. 4672. The learned Subordinate Judge has overruled both these contentions. He has taken, as I have already stated, the sum of Rs. 3781 to be the principal of the original loan. For overruling the contention of the borrowers, he held that as the adjustment recorded in mortgage instrument cannot be re-opened in the view of that proviso, the borrowers cannot say that Rs. 3000 was not the actual advance on the questioned simple money bond. He accordingly proceeded upon the recital of the mortgage instrument in fixing Rs. 3781 as the principal of the loan. In his judgment, however, he gave no reasons for repelling the contention of the mortgagees.
4. The mortgagors do not challenge before us the finding of the learned Subordinate Judge, but the mortgagees do. They urge that Rs. 4672 has to be taken as the principal of the original loan. The parties have proceeded before us on the footing that proviso 1 to Section 36, Sub-section (1) of the Act, prevents the reopening of the mortgage. That is the conclusion of the learned Subordinate Judge and that conclusion would be right if the 'suit' mentioned in that proviso would include the application for execution, which in this case, was made in 1937, that is beyond twelve years of the mortgage. That view is in accord with what has been said by a Division Bench in Jagabandhu De v. Akhoy Kumar Sil : AIR1943Cal137 , to which my learned brother Akram J., was a party. As the point has not been argued before us, I do not express any opinion but proceed upon the footing that the interpretation put upon the proviso in that case is correct.
5. The word 'principal' has been defined in Section 2 (16) of the Act. Unless there is anything repugnant in the subject or context, it means the amount actually advanced to the borrower. When for the purpose of granting relief to the borrower a decree is re-opened, a new decree must be passed and that decree must be passed in conformity with the provisions of the Act. No interest exceeding the principal of the 'original loan' or exceeding the principal then outstanding can be passed. (Section 30, Sub-section (1), cls. (a) and (b).) 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 renewals. But that meaning must give way if it conflicts with proviso 1 to Section 36, Sub-section (1). The mortgage which we have before us proceeds upon an adjustment then made. It has purported to close previous transactions and has created a new obligation. The adjustment cannot accordingly be re-opened. In it an agreement is also embodied by which the parties agree to treat RS. 4484 plus 188 i.e., Rs. 4672 to be the principal. That agreement cannot also be re-opened by the Court. If there had been no recital in the mortgage instruments that Rs. 3593 was the amount advanced on the simple money bonds the borrowers would not have been able to go behind the statement as regards principal as contained in the mortgage instrument. In my judgment, the fact that the original advance has been stated therein by way of recital would not make any difference, for if the recital be given effect to for the purpose of ascertaining the principal on the footing of actual advance the agreement as contained in the mortgage instrument would be nullified. As that agreement cannot be touched, the 'original loan' must be taken to be what is secured by the mortgage instrument. The definition as given in Section 2 (16) must therefore give way as being repugnant to the subject. Though no reasons have been given on this point in Jagabandhu De v. Akhoy Kumar Sil (43) 30 A.I.R. 1943 Cal. this was what was done in that case. The decree of the learned Subordinate Judge is accordingly modified. The mortgagees would be entitled to Rs. 4672 by way of principal and + (RS. 4672-Rs. 600) by way of interest that is Rs. 8744 on account of principal and interest.
6. The mortgagees have raised two other points, namely: (i) that the lower Court in the exercise of its discretion ought to have awarded as costs the same amount which had been awarded in the original decree; and (ii) that the decree as passed is not in accordance with law. In my judgment both these points ought to succeed. Sub-section (2) of Section 36 of the Act gives power and discretion to the Court to give costs in respect of the re-opened decree. In this case the re-opened decree was passed as far back as 1930. At the time of the institution of their suit, the plaintiffs were entitled to get a decree for the sum claimed in the suit. They were justified accordingly in paying the amount of court-fees which they paid on their plaint. That sum alone exceeds the sum of Rs. 698 which the learned Subordinate Judge has given as costs in respect of the re-opened decree, and accounts for more than three-fourths of the amount of costs originally decreed. The defendants by recourse to questionable tactics have prolonged the execution proceeding beyond 1st January 1939. In these circumstances, I think the sum of Rs. 1124-6-0 ought to be awarded as costs in respect of the reopened decree. The preliminary decree accordingly would be for the sum of Rs. 9868-6-0 plus the balance of the costs of these appeals which would be due to the plaintiffs.
7. In their appeal the defendants contend that at least ten yearly instalments ought to have been given. There is no justification for their prayer. The substantial part had been borrowed before 1917. The mortgage was executed in 1917 and only Rs. 600 had been paid up to now. They have substantial income from land and business. But as I am increasing the amount decreed by the learned Judge, I am prepared to give them seven yearly instalments. The first instalment awarded by the learned Subordinate Judge was due in chaitra 1347 B.S. and the second is about to become due. In these circumstances, I direct the first instalment to be RS. 2000 to be paid within Bysack 1350 B.S. and the balance to be paid in six equal annual instalments payable within Bysack of each year.
8. The decree made by the learned Subordinate Judge is not in accordance with law. As the suit is on a mortgage the decree would be that in default of payment of any instalment the plaintiffs would have the right to apply for final decree in accordance with the provisions of Section 34, Sub-section (1), Clause(a) Sub-clause (ii), Bengal Money-lenders Act. The result is that both the appeals are allowed. The appellants in each of the appeals would get from their opponents the costs of the court-fees and the paper-book costs. The costs are to be set off against each other. The balance that may be found due to the plaintiff's appellants would be added to the preliminary decree on the mortgage. No hearing fee is awarded to any of the parties.
9. I agree.