1. This appeal is by defendants 1 to 4. The question involved is the amount which the plaintiff is liable to pay to them before he can be allowed to redeem a mortgage. The mortgage in question was-executed, by the plaintiff's predecessor in favour of the appellants on 8th October 1898. The mortgagees were put into possession. The arrangement was that out of the annual profits, Rs. 280 was to be retained by the mortgagees on account of interest and the remainder applied to the satisfaction of the mortgage. The plaintiff acquired a four and a half annas share of the equity of redemption in the land mentioned in Schedule 1 on 14th November 1930. He instituted the present suit for redemption on 16th January 1931. It is to be-noticed that in the meantime the appellants have themselves acquired the remainder of the equity of redemption. One of their predecessors-in-interest, namely Sarada Lala, had redeemed two other mortgages.
2. The plaintiff obtained a preliminary-decree on 15th October 1933. In order to ascertain the precise amount due, a commissioner had to be appointed to take accounts. The Subordinate Judge found that a sum of Rs. 100-9-0 was due from the appellants to the plaintiff. On appeal by the appellants, the District Judge modified the decree and found that a sum of Rupees 191-11-0 was due to the appellants from the plaintiff. The appellants have now filed a second appeal with regard to two matters, while there is also a cross-objection by the plaintiff with regard to two other matters. The main point which is raised in the appeal is the amount of interest due to the appellants on account of the sums which were paid by Sarada to discharge the two-other mortgages. It was contended on. behalf of the plaintiff that the case was governed by Section 4, Bengal Money-Lenders Act (Bengal Act 7 of 1933). This view found favour with both the Courts below, and in the accounting the interest allowed to the appellants has been limited to the sums actually paid to discharge the two mortgages. It has now been contended that in any view of the case this Section has no application at all. It does not appear that this particular argument was made in either of the Courts below; but it is a question which involves nothing more than the interpretation of the Section. The Section in question is in these terms:
Notwithstanding anything in any other Act, where in any suit in respect of any money lent by a money-lender before the commencement of this Act it is found that the arrears of interest amount to a sum greater than the principal of the loan, the Court, unless it is satisfied that the moneylender had reasonable grounds for not enforcing his claim earlier, shall limit the amount of such interest recoverable in the suit to an amount equal to the principal of the loan.
3. Now, I will assume that this Section applied to suits for redemption, although it is obviously a question which is open to arguments : for example, the words 'unless it is satisfied that the money-lender had reasonable grounds for not enforcing his claim earlier' seem to suggest that in the suit in question the creditor must be the plaintiff. But, be that as it may, there is a further question in this case whether the arrears of interest refer to interest due on money which was not lent by this particular money-lender at all. In the present case the Section has been applied to two sums of money which were paid by the predecessor of the appellants in discharge of mortgages which had been executed to secure money lent by other persons. There is certainly nothing in the plain wording of the Section to suggest that it is meant to apply to a case of this kind. The arrears of interest seem to refer to the money lent by the particular money-lender. In view of the fact that the appeal must succeed on other grounds, it is not necessary to decide the point now. But as at present advised, I should certainly be disposed to hold that this Section is not intended to apply to a case of this kind.
4. Secondly, the Section only applies to arrears of interest. It has nothing to do with interest that has already been paid. This point was overlooked by both the Courts below. When this objection was raised by the plaintiff he thought that it would be enough to show that the amount of interest actually decreed by the learned lower Court was more than the principal. That is obviously not enough. He should have made a case on the accounting that at the time the suit was brought, the arrears of interest then due were more than the principal. No such attempt was made and it is only necessary to look at the commissioner's report in order to see that such an attempt could not possibly have succeeded. Thirdly, this matter of the interest due on these two sums was finally settled in the preliminary decree. The decree was that the appellants were to be allowed interest at 6 per cent, per annum from the date of payment. The plaintiff did not appeal against that decree. At the time when it was passed, this Act had not come into force. It came into force between the preliminary and the final decrees. No doubt, if this matter had been before the commissioner, it would have been quite enough for the plaintiff to show that the Act was in force at the time when the final decree was passed. But this matter was not before the commissioner at all. It had already been finally settled and he had to make this allowance to the defendants in taking his accounts. There was nothing further to investigate and the matter could not be re-opened.
5. Finally, the Section does not apply in every case. It does not apply when the Court is satisfied that the money-lender had reasonable grounds for not enforcing his claim earlier. This matter too seems to have escaped the attention of both the' Courts below. There seems no reason to doubt that the object of the Section is to prevent money-lenders from staying their hands in order that interest may accumulate to quite ludicrous proportions. In the present case, no such question could possibly arise. The interest was automatically, paid year by year out of the usufruct under the very terms of the agreement. The appellants were to remain in possession until the principal debt was paid off. There was therefore no reason whatever why they should institute a suit to enforce the claim and, had they done so, they would have met with the objection that the terms of the bond prevented them from doing so. It is therefore quite impossible to hold that their action was anything but reasonable. The second point refers to a small sum of Rs. 100-9-0 and is due to what appears to be a clerical mistake. The learned Judge found that the appellants were really entitled to an increase of Rs. 406. He however held that they could not obtain more than Rs. 292-4-0, because the court-fees paid were deficient. There was the further fact that on the accounting as found in the original Court they had an excess of Rs. 100.9-0. This sum was by mistake deducted from Rs. 292-4-0 instead of from Rs. 406. There was clearly no reason for doing this at all.
6. The first point in the cross-objection relates to a sum of Rs. 53-6-0 which was found to have been incurred in the repairing of a certain embankment in the year 1260, M.E. The point in dispute is whether this sum was paid by the appellants or not. It is concluded by the finding of the learned District Judge. There remains the question of costs incurred in the execution of the commission. It is contended that the plaintiff should have been allowed the entire costs, because the appellants failed to keep any accounts. This was the decision of the learned Subordinate Judge. The learned District Judge modified it by allowing the plaintiff half the costs. He took this argument into consideration and he was not prepared to hold that the failure of the appellants to keep accounts was the sole reason which rendered a commission necessary. I have myself no doubt that if the appellants had kept accounts the plaintiff would have urged first that they had been concocted for the purpose of this case and secondly that the entries in them were all false. The view taken by the learned District Judge was quite reasonable and I am not prepared to interfere with it. The result is that this appeal must be allowed, and the decree of the lower Appellate Court modified. There will be a decree to the effect that the plaintiff must pay Rs. 800 to the appellants. This sum must be paid within three months from today failing which he will be debarred from redeeming the property. The appellants will get their costs in this appeal. The cross-objection is dismissed with costs. The point under Section 4, Bengal Money-Lenders Act (Bengal Act 7 of 1933) has not been finally decided, and leave to appeal under Section 15, Letters Patent, is refused.