1. This appeal is by the mortgagee and it arises in connexion with an application made by the respondent under the provisions of Section 38, Bengal Money-lenders Act. Exhibit 1 is a copy of the usufructuary mortgage bond executed by the respondent in favour of the appellant. Under its terms the appellant was to remain in possession of the mortgaged property in lieu of interest. The principal sum advanced was RS. 440. The respondent paid this sum into Court under the provisions of section 83, T. P. Act. The appellant refused to take it on the ground that the deposit was insufficient. It cannot be ascertained with precision from the materials on the record on what, basis this objection was sought to be sustained. It seems, however, that the appellant was relying upon Ex. 3 a later mortgage, which according to the respondent was never acted upon. At any rate, it is the validity of this document which is the chief point of dispute between the parties. A few months after the deposit Under Section 83, T. P. Act, became infructuous, the Bengal Money-lenders Act came into force. The respondent then filed the present application with, for him, the delightful result that he has obtained a declaration that, instead of being indebted to the appellant, he is entitled to recover Rs. 83 from her. An appeal by the appellant to the District Judge was dismissed
2. Mr. Ghose has objected to the form of the Order and contends that the Court has no jurisdiction Under this section to find that anything is due from the mortgagee to the mortgagor. Mr. Das conceded that this contention is correct, and admitted that the most he could ask for is a declaration that nothing is due on the mortgage.
3. On the merits, Mr. Ghose contended that section 38 has no application in view of the terms of the bond. The mortgagee was put into possession in lieu of interest. Under Section 77, T. P. Act, he was absolved from accounting. As a result, no question of accounting can arise. The question depends upon the provisions of Section 30, Bengal Money-lenders Act. Under Sub-section 1 (c) interest is not to exceed 8 per cent, per annum. This applies even when the loan was advanced and interest was paid before the commencement of the Act. The result is that the respondent is entitled to the benefit of this provision in spite of the terms of the original bond. The Munsif was, therefore, right to take an account and limit the rate of interest to that allowed by the section.
4. In the second place it was contended that the respondent is estopped from making this application in view of his deposit Under Section 83, T. P. Act. There is nothing in this connexion upon which any plea of estoppel can be based. The deposit merely amounted to an offer which the appellant refused. As long as his equity of redemption remains intact, the respondent cannot be prevented from taking advantage of an Act passed to give relief to debtors.
5. It remains to consider one curious argument on behalf of the appellant to the effect that the Munsif was wrong in allowing interest at 8 per cent., when the bond itself does not provide for any particular rate. When I asked Mr. Ghose what rate should be allowed in view of the provisions of the bond, he was of course unable to give any answer. If anything turns upon the provisions of the bond in this respect, the only conclusion would be that the appellant is not entitled to any interest at all. The Munsif was obviously right when be calculated the interest at the highest rate allowed by the law.
6. Objection was also taken to some of the findings on the report of the commissioner who took the accounts. These are dealt with Under the headings 3, 4 and 5 in the final judgment of the Munsif. The sums under the first two heads are so small that they do not affect the result. I only deal with them because of the principle involved. They consist of money which the appellant might have realised from the tenants but actually did not. Under the terms of the bond, the appellant was not liable to account; the profits were at his absolute disposal and he was entitled to make remissions. It may seem a hardship that as a result of a change in the law he should now be called upon to' account for them. That, however, will not entitle a Court to refuse to give effect to the law and it is a matter of experience that usufructuary mortgages are generally highly paying propositions for the mortgagee. The question depends upon whether these sums are interest within the meaning of Section 2 (8). It is therein provided that interest includes any sum by whatever name it is called in excess of the principal paid or payable to a lender in consideration of a loan. It is, therefore, necessary to see whether these sums were payable to the appellant in consideration of the loan. It is not disputed that they were in excess of the principal paid. By the terms of the agreement the appellant was put into possession of the property in lieu of interest. As a result the tenants were liable to pay this rent to the appellant. It was, therefore, payable to the lender in consideration of the loan.
7. The last item refers to sums covered by rent decrees actually obtained by the appellant. In view of what has been said above, it would be impossible to hold that they are not interest within the meaning of the section. The result is that the Order of the Munsif is modified. There will be a declaration that nothing is due from the respondent to the appellant on the mortgage bond of which Ex. 1 is a copy. The Order made by the Munsif for costs is in every respect reasonable. I therefore direct both parties to bear their own costs throughout.