1. The plaintiffs-appellants instituted a suit against the original defendant Monorama Gupta to recover moneys due to them on two mortgages. In this appeal we are concerned with one of the said mortgages, namely Ex. 4 dated 19th April 1916. The claim of the plaintiffs on this mortgage as laid in the plaint is Rupees 3995 for principal and Rs. 2505 for interest up to date of the suit, after relinquishment of their claim to interest to the extent of about Rs. 1500, total Rs. 6500. On 19th June 1903 the defendant borrowed Rs. 2000 from Sarat Chandra Basak, the father of the plaintiffs, and to secure the said loan executed a mortgage Ex. 1 on that date. Interest stipulated was simple interest at the rate of Rs. 9-12-0 per cent, per annum. Some interest due under it was paid. On 19th April 1916 there was an adjustment of accounts and a sum of Rs. 1995 was found due on account of interest. On that date the mortgage bond in suit, Ex. 4, was executed by the defendant in favour of the plaintiffs, their father Sarat Chandra Basak having died some time before. The mortgage bond recited the fact that the defendant had borrowed Rs. 2000 from Sarat Chandra on 4th Assar 1310 (19th June 1903) on a mortgage (Ex. 1) and that the sum of Rs. 1995 was then due for interest on the said loan of Rs. 2000. The interest then due was capitalised and the mortgage, Ex. 4 was executed. The rate of interest provided for was the same as in Ex. 1. The properties included in Ex. 1 were charged and some more properties were given by the mortgagor as additional security. Some payments were made towards interest before suit, but the aforesaid sum of Rs. 2505 remained due (after relinquishment of about Rs. 1500 for interest) on account of interest at the date of the suit calculated on the basis that the principal was, as stated in Ex. 4, Rs. 3995.
2. The defence which is material to the appeal, was that the plaintiffs cannot recover more than Rs. 4000 on the basis that Rs. 2000 and not Rs. 3995, is to be considered to be 'the principal of the loan' within the meaning of Section 4, Bengal Money Lenders Act (VII of 1933). This defence had been given effect to by the learned Subordinate Judge who has passed a decree in favour of the plaintiffs for Rs. 4000 only. The plaintiffs have filed this appeal. They admit that Section 4, Bengal Money Lenders Act (VII of 1933), applies but contend firstly, that the 'principal of the loan' must be taken to be what has been stated to be and treated as principal in Ex. 4, the bond sued upon, namely Rs. 3995 and not Rs. 2000 the actual advance, and secondly, that even if Rs. 2000 the actual advance, be treated as 'the principal of the loan' under Section 4 of the said Act the amount of interest recoverable in the suit was to be limited to Rs. 2000 which however must be added to Rs. 3995, the amount at which their dues were settled on 19th April 1916 when Ex. 4 was executed. According to their first contention they would have been entitled but for the relinquishment of a portion of their claim for interest to a decree for Rs. 3995 (principal) + Rs. 3995 (interest) = Rs. 7990; and according to their second contention they would be entitled to a decree for Rs. 3995 (principal) + Rs. 2000 (interest) = Rs. 5995. We cannot accept any of these contentions and are of opinion that the decree passed toy the learned Subordinate Judge is right. The questions raised depend upon the interpretation of Section 4 of the said Act.
3. The language employed by the Legislature is that a money-lender cannot recover by suit as interest an amount greater than 'the principal of the loan', subject to an exception which is not material in this appeal. In terms the section or the Act does not deal with recovery of the principal of the loan. But the intention of the Legislature is clear. The money-lender cannot recover more than twice the amount of 'the principal of the loan', where his claim according to the contract exceeds the same, namely 'the principal of the loan' plus an amount for arrears of interest not exceeding the 'principal of the loan'. For making the decree the principal of the loan must be taken to represent the same sum, not one sum for considering the claim for interest and for limiting it under Section 4 and another sum for considering the claim for principal. We cannot therefore accept the second contention of the appellants. They can get a decree limited to Rs. 4000 if 'the principal of the loan' is to be taken as Rs. 2000, the sum that was actually advanced, or limited to Rs. 7990 (leaving out of consideration for the present the amount of interest they have relinquished) if the principal of the loan is to be taken to be what is mentioned in the bond in suit, Ex. 4, namely Rs. 3995. The real question therefore is what is 'the principal of the loan' the phrase used in Section 4 in the case of a renewed bond. The question, so far as we are aware, has not been discussed in detail in any case in this Court. In an unreported decision of Mukherjea J., in which the learned Chief Justice concurred, it was held definitely that 'the principal of the loan' is the amount actually advanced, although in that judgment the reasons for the said conclusion are not specifically stated.
4. The words 'principal of the loan' or the word 'principal' have not been defined in the Act (7 of 1938). Apart from any other considerations in the case of a renewed bond it may mean the money actually advanced - the original loan or the capitalised sum, the amount of the original loan added to the arrears of interest by agreement between the creditor and the debtor. The learned advocate for the appellants contends for the second meaning. His contention is, firstly, that for the purposes of Section 4 the principal of the loan must be taken to be what has been agreed upon between the creditors and debtors to be the principal for the purpose of producing or yielding interest or income in future. He says that if that position is not accepted what had been settled by the parties would be unsettled. He accordingly says that as the sum of Rs. 3995 was to yield interest or income - the interest at the rate of 9 3/4 per cent, was to be calculated according to contract on the sum of Rs. 3995 and not on Rs. 2000 the original sum lent from after Ex. 4 - that sum of Rs. 3995 is to be regarded as the principal of the loan for the purposes of Section 4 of the Act. His second contention is that Section 4 in substance gives statutory force to the Hindu Law of Damdupat and makes it applicable to the whole province of Bengal. In cases where the Hindu Law of Damdupat was applied the capitalised amount in the renewed bond and not the amount originally lent has been, taken to be the principal. In support of this last mentioned proposition he relies upon the decision of Jenkins Order J. and Gandy J., in Sukalal v. Bapu Sakharam (1900) 24 Bom. 305.
5. When analysed his first argument rests on the foundation that the sanctity of contract between parties must be respected by Courts. That is no doubt a good principle on which Courts proceed normally, but that principle cannot be availed of in construing the Bengal Money Lenders Act or any other Act of the like kind. The object of that Act is to give relief to debtors by relieving them partially of the effect of their contracts. It cannot therefore be held that 'the principal of the loan' is the amount which the creditor and debtor had agreed to call as principal, what was to be treated by agreement to be the principal for the purpose of producing future income or interest to the creditor.
6. The second contention of Mr. Sen Gupta is that Section 4, subject to the exception provided therein, embodies what is known as the rule of damdupat, that in any event we should construe the words 'principal of the loan' occurring in the section in the same way as the word principal has been construed in reference to the rule of damdupat and the decision in Sukalal v. Bapu Sakharam (1900) 24 Bom. 305 is relied in support. We cannot hold that the Legislature has merely adopted the Hindu Law of Damdupat. There is no such indication in the Act itself. We will have to construe Section 4 by giving effect to every word. Its provisions are not ambiguous and we cannot add any word or cut put any. The object of the Act will, however, have to be taken into consideration. 24 Bom 3051 cannot in our judgment furnish an analogy, for Jenkins C.J., made it quite clear from the quotations he made from the Smritis and commentaries of the Hindu jurists that those jurists considered as principal for the purpose of the rule of damdupat, the capitalised amount, the amount of principal plus the accrued interest which was stated by agreement to be principal in the renewed bond. In the Oxford Dictionary the word 'principal' in reference to a loan is defined as what constitutes the primary or original sum, that is the main capital sum invested or lent and yielding interest or income. The word 'loan' is defined as something the use of which is allowed for a time on the understanding that it shall be returned or an equivalent given, especially a sum lent on these conditions and usually at interest and the word 'lend' thus to grant the temporary possession of a thing on conditions or in expectation of the return of the same or its equivalent.
7. In view of these definitions the phrase 'the principal of the loan' according to its dictionary meaning in the case of a money transaction is the sum of money which the creditor parts with, which he puts into the possession of the debtor. The phrase must accordingly mean the sum actually advanced, and not the sum actually advanced plus what is not actually advances the possession of which is not parted by the creditor, namely the capitalised interest. This is the definition which is given in the other sister Act e.g., the English Money Lenders Act (17 & 18 Geo. V. Ch. 21, Section 15) and would follow from the definition of interest contained in Section 2, Usurious Loans Act (10 of 1918 I.C.). The acceptance of the definition of that phrase as contended for by the appellants would enable a money-lender to defeat the object of the Bengal Money Lenders Act and the provisions of Section 4 would have no controlling effect. A moneylender is usually in an advantageous position so far as his debtor is concerned and all that he need do in that case, is to take successive renewals from his debtors by capitalising interest in arrears. We accordingly hold that the phrase 'principal of the loan' in Section 4 means the amount actually advanced or parted with by the money lender, the original loan and not what is stated as the principal in the renewed bond1 and which is made up of the original loan or balance thereof and the arrears of interest capitalised. We accordingly hold that, the learned Subordinate Judge is right and this appeal must be dismissed with costs, hearing fee being assessed at three gold mohurs.