1. This is an appeal from the judgment of Sen J. dismissing an application made by the defendant mortgagor under the Bengal Money-lenders Act. The applicant asked for the mortgage transaction to be re-opened, and also asked that, in taking the account, the mortgagor should not be charged with compound interest, or charged with interest on the decretal amount, as provided by the final decree. The facts of the case are very simple. The appellant on 7th April 1937, took a loan from the respondent of Rs. 11,000, and executed a promissory note for that amount, the provision for interest being that it should be payable at the rate of 7 1/2 per cent. com-pound interest with quarterly rests. To secure the principal and interest the appellant deposited by way of equitable mortgage the title deeds of a property called No. 19, Mohan Began Lane. The suit to enforce the mortgage was instituted on I8th January 1939, the interest claimed amounting to Rs. 642 3-9. The suit was undefended, and on 3rd March 1939, a preliminary decree was passed on 2nd June 1939, the registrar made his report wherein it was stated that on 17th January 1940, the mortgage debt and interest would amount to Rs. 11,769.13-3. On 15th April 1940, the final decree for sale was made, and it was provided in the decree that the decretal amount should carry interest at 6 per cent. until realization. Steps were taken to bring the property to sale, and while the sale was pending, the present notice of motion was served on 5th September 1940. Sen J. dismissed the application with costs on 12th September 1940. On 14th September 1940, the property was sold, but the sale has not been confirmed pending the disposal of this appeal.
2. Three points are taken by the appellant, any of which, she says, entitles her to ask the Court to have the transaction re-opened and, in terms of Section 36, Bengal Money-lenders Act, to claim some of the reliefs provided thereby. Her first complaint is that the Court has allowed interest at the rate of 6 per cent, on the decretal amount as found due by the Registrar. Her objection to this part of the decree is based upon Section 31 of the Act. The relevant portions of that section are as follows:
Notwithstanding anything contained in any law for the time being in force, no Court shall, in any decree passed in any suit to which this Act applies-(a) if the loan to which the decree relates was advanced before the commencement of this Act, allow any interest on the decretal amount.
3. The suit with which we are concerned is admittedly one to which the Act is applicable, and the loan to which the decree relates was advanced before the commencement of the Act. In dealing with the applicant's contention the learned Judge observed as follows: 'It is contended that s.31, Bengal Money-lenders Act, would entitle the petitioner to this relief.' He then refers to a decision of his own on exactly the same point. That decision is Katan Chunder Gupta v. Nirmal Chunder Neogy ('41) 45 CWN 13. The observations of the learned Judge in that case were as follows:
Learned counsel for the petitioner draws my attention to Section 31 of the Act and he says that by reason of the provisions of that section the petitioner would be entitled to reopen the decree because the Court has granted interest on the decretal amount. Now, there is no section in the Bengal Moneylenders Act, so far as I am aware, which says, that if a decree is passed whereby interest on the decretal amount is granted before the Act came into force, the judgment-debtor would be entitled to have that decree set aside, or modified, by a disallowance of that portion of the decree by which interest is granted on the decretal amount.
4. He then proceeds to set out the language of the section and he goes on:
All that Section 31 (a) says is that a Court shall not allow in a decree any interest on the decretal amount. Now when does a Court allow interest on the decretal amount? It allows it at the time of passing the decree. That being so, the only interpretation that can be put on Section 31 (a) is that it prohibits the Court from passing any decree in which interest on the decretal amount is allowed. That is all that section does and nothing more.
5. Sitting on the original side, I have myself followed this decision, and I am informed that other Judges have taken the same view. However, on this occasion, we have probably heard a more elaborate argument than has been addressed to the Judges of first instance, but nonetheless that argument has not caused me to change my opinion. The section says that 'no Court shall, in any decree passed in any suit to which this Act applies, allow any interest on the decretal amount.' Now, what Courts are prohibited from doing since the commencement of the Act is passing decrees allowing interest on the decretal amount, in cases where the loan, which is the subject-matter of the suit, was advanced before the commencement of the Act. Mr. B. C. Ghose for the appellant argues that one of the objects of the Act was to abolish loans at compound interest, and he has, I think, correctly pointed out that, where a decree is passed for a consolidated amount comprising both the principal sum advanced and interest thereon the effect of allowing interest on the decree is to allow interest upon interest or, in other words, compound interest. I shall consider shortly how far his contention that the Act is aimed at abolishing compound interest is justified. In my opinion, it would require very clear language in the Act to enable us to hold that the Court can revise or modify a decree passed prior to the commencement of the Act, at a time when interest upon the amount decreed was admittedly legal under Section 34, Civil P. C, and on this ground to reopen the transaction and apply the provisions of Section 36, Bengal Money-lenders Act. The next point which is taken is based on Section 30 of the Act. The relevant provisions of the section are these:
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.. .... (c) interest, at a rate per annum exceeding in the ease of, (i) unsecured loans, 10 per centum simple, (ii) secured loans, 8 per centum simple.
6. It is on the language of this section that Mr. Ghose bases his submission that the Act is aimed at compound interest as such. He has referred to the English Moneylenders Act, 1926, and also to two Acts of Provincial Legislatures, the Bihar Moneylenders Act, and the Assam Money-lenders Act, and he has drawn attention to the fact that these three statutes in explicit terms make compound interest illegal. I cannot see that any inference can be drawn from these facts as to the proper construction of the Bengal Act. Indeed, if any conclusion is permissible, it is that, for some reason or other, the Legislature of Bengal in dealing with the relations of borrowers and landers, elected to relieve the hardships to which the borrowers were subjected, in some other way than by the method which commended itself to Parliament and to the Legislatures of Bihar and Assam. The fact that the sections making compound interest illegal in the statutes mentioned above are not reproduced in the Bengal Act, appears to me to be an obstacle in Mr. Ghose's way rather than an assistance to him.
7. Mr. Ghose has also referred to the Objects and Seasons of the bill, and to the report of the Select Committee to which the bill was referred. To my mind, we are not entitled in a matter of construction to call in aid the proceedings of the Legislature. There is high authority for this in Administrator-General of Bengal v. Premlal Mullick ('95) 22 IA 107, which was emphasized in a reported decision of this Court, Debendra v. Jogendra : AIR1936Cal593 . Mr. Ghose has referred to authorities that lay it down that regard must be had, in construing an Act, to the circumstances in which it was passed and the evils which it was designed to remedy, and also to what one reported decision calls it ' context and scheme.'
8. No one can read the Bengal Money-lenders Act without seeing that its main object was to alleviate the hardships to which debtors were subject, and to ensure that a borrower was not called upon to pay an extortionate sum by way of interest for the use of the lender's money; I imagine that in cases of ambiguity one would prefer a construction which, in the opinion of the Court, effects this object, but I can see no reason for holding that the Legislature intended to effect it in any particular way. If we find that the object has been effected, that is enough for us. Now Section 30, if we give it the construction for which the respondent con-tends, undoubtedly saves borrowers from being called upon to pay an unconscionable amount for the financial accommodation which they have received. It says that they shall not be called upon to pay, after the commencement of the Act, interest at a rate per annum exceeding in the case of secured loans 8 per centum simple. It is admitted that in this case the amount which the Registrar has found due, working on the basis of compound interest, does not exceed the amount which would be due on the loan had it been advanced at 8 per centum simple interest. Mr. Ghose does not contend that the lender should be entirely deprived of his interest, but he argues that the stipulation of compound interest should be eliminated in calculating what is due. In my opinion the construction adopted by Sen J. is the correct one, namely that the interest should be calculated according to the tenor of the agreement between the parties, but that the decree passed against the borrower should not exceed the sum which would be due bad the agreement provided for simple interest at 8 per cent. This disposes of the two main contentions put forward by the appellant.
9. Another point has been taken under Section 35 of the Act. It is said that the proceedings are vitiated by the fact that there was no enquiry whether the sale of the mortgaged property was necessary to satisfy the decree. It is said that the Registrar has erred in not holding such an enquiry, and that if he had held it, it may be that only a portion of the mortgaged property need have been brought to sale, and that the appellant would have retained the remainder. Mr. Banerji, on the other hand, argues that, either by inadvertence or by design, the Legislature has failed to make Section 35 applicable to decrees made on the original side of the High Court, and he has drawn attention to the differences between the procedure for execution sales and for their proclamation prescribed by Order 21, R, 66 of the Code, and the provisions in Ch. 27 of the rules and orders of the original side. We do not propose to decide whether Section 35, as the rules now stand, can be applied to execution proceedings by this Court. I, for one, should be sorry to exclude them from the operation of Section 35, if that; section can possibly be made applicable, because I imagine that a construction which makes the Act work is to be preferred to one that makes it inoperative in the arbitrary way suggested. But on the facts of the case it seems to be reasonably clear that the entirety of the property was necessary to satisfy the decree.
10. In the present appeal a single property was the subject-matter of the mortgage. Under our rules in certain cases, of which this is one, the property has to be surveyed and a reserve price fixed by the Registrar in accordance with the surveyor's report. This was done in the present case and the property was sold. It can therefore be assumed that the reserve price was reached, for, if it had not been reached, another sale would have been necessary or an application would have been made for leave to the Registrar to accept the highest bid. Even so, the sale proceeds are not sufficient to satisfy the decree. This is satisfactory evidence that the entirety of the property is necessary to satisfy the decree. The points that I have mentioned are the only ones which are raised in the appeal and, in our opinion, the appellant fails on all of them. The appeal must therefore be dismissed with costs.
11. Appeal No. 55 of 1940. - There is another appeal where the same points are raised. The only difference is that two separate premises are the subject of the mortgage. A reserve price has been fixed with regard to each of them. One of them has been sold and the amount realized by its sale leaves the decree unsatisfied. In the case of the other property, the reserve price has not been reached. No reason has been given to make us think that any useful purpose would be served by remanding this case to the Registrar for him to ascertain whether that property can be sub-divided and a portion sold sufficient to satisfy the decree. From all the materials before us it appears that it will be necessary to bring the second property to sale again, and the price which is likely to be realized will not be in excess of that which is necessary to discharge the appellant's liabilities. The same order there. lore is made with regard to this appeal and it; Is dismissed with costs. Certified for two counsel.
12. I agree.