1. These are two applications under the Bengal Money-lenders Act. The first is by the decree-holders under Section 35 of the Act, while the second is by the judgment-debtors under Section 36 of the aforesaid Act. The applications have been heard together and this order will govern both of them. The plaintiffs obtained a final decree upon two mortgages on 2nd July 1940. This decree affects certain puisne mortgagees as well, but they have not appeared on these applications. The interest specified in the mortgage bonds were 71/2 per cent. and 12 per cent. per annum respectively with quarterly rests. A final decree was passed granting the mortgagees interest at those rates, and interest on judgment at 6 per cent. Thereafter the decree-holders brought the mortgaged premises to sale. The price specified in the sale proclamation of the property was Rs. 44,000. The mortgagee decree-holders obtained leave to bid and bid up to Rs. 38,000 for the property. This was the highest bid. They apply now for confirmation of the sale in accordance with the provisions of Section 35, Bengal Money-lenders Act. The section runs as follows:
Notwithstanding anything contained in any other law for the time being in force, the proclamation of the intended sale of property in execution of a decree passed in respect of a loan shall specify only so much of the property of the judgment-debtor as the Court considers to be saleable at a price sufficient to satisfy the decree, and the property so specified shall not be sold at a price which is less than the price specified in such proclamation.
Provided that, if the highest amount bid for the property so specified is less than the price so specified, the Court may sell such property for such amount, if the decree-holder consents in writing to forgo so much of the amount decreed as is equal to the difference between the highest amount bid and the price so specified.
2. The decree-holders point out that the difference between the price specified and their bid is Rs. 6000 and they consent to deduct this amount from the decretal amount which was then Rs. 42,889-15-6. If the amount of Rs. 6000 is so deducted, the balance is Rs. 36,889-15-6. The decree-holders pray that the sale be confirmed and they be allowed to pay into Court the difference between this sum of Rs. 36,889-15-6 and the highest bid of Rs. 38,000, viz., Rs. 1110-0-6 and take the property in full satisfaction of their claim. This they claim they are entitled to do under Section 35 of the Act. The judgment-debtors oppose this application. They point out that there is no provision in the section which would permit the decree-holders to pay in this sum of Rs. 1110-0-6 into Court and contend that Section 35 can have no application unless the decretal amount is equal to or more than the price specified in the sale proclamation. I do not propose to investigate this matter or give any opinion on it as my decision on the application of the judgment-debtors will result in the sale being set aside.
3. The judgment-debtors apply, as I have said before, under Section 36, Bengal Moneylenders Act. They point out, inter alia, that they are entitled to be released from all liability for interest in excess of the limits specified in Section 30 of the aforesaid Act. They contend further that if they are to be released of such liability' the decree will have to be re-opened, and once the decree is re-opened, by virtue of the provisions of Section 36(2) a new decree will have to be passed in terms of Section 34. There can be no doubt that the judgment-debtors are entitled to relief under the Bengal Money-lenders Act inasmuch as the interest charged in the mortgage is in excess of that which is allowed under the Act. This claim is not contested. But the decree-holders relying on the case in Suresh Chandra v. Lal Mohun : AIR1942Cal121 and the case in Manmatha Nath Bose v. Renula Bose : AIR1941Cal681 contend that it is not necessary for the Court to re-open the decree in order to grant the relief claimed by the judgment-debtors.
4. There can be no doubt that the two decisions support the contention urged on behalf of the decree-holders, but with great respect I must express my disagreement with the view taken there and decline to follow those decisions. My reasons for holding a different view are these: Section 36(1) states that when the Court is of opinion that the exercise of its powers under the section will grant relief to the borrower, it shall exercise all or any of such powers. Sub-section (2) says that when the Court in exercising these powers re-opens a decree already passed, the Court shall pass a new decree in accordance with the provisions of the Act. It is clear from the section that if in granting relief the decree is re-opened, a new decree will have to be passed and the new decree will have to be in accordance with the provisions of the Act. It is also clear that the section envisages the granting of relief under two sets of circumstances: (1) when no decree is re-opened and (2) when a decree is re-opened. I shall restrict myself to the particular relief which is sought for in this case, viz., the relief from the liability to pay interest on a mortgage in excess of the limits specified in Section 30. The power to grant this relief is referred to in Section 36(1)(c). When no decree has yet been passed no complexity arises; the liabilities of the parties will be determined by the decree and, in spite of the terms of the contract between the parties, the borrower will be relieved of the liability to pay interest in excess of the limits specified in Section 30. No question of re-opening any decree then arises. When, however, the relief is sought after a decree has already been passed making the defendant liable to pay interest at a rate in excess of the limits specified in Section 30, can the Court grant this relief without re-opening the decree I entirely fail to see how it can. So long as a decree is in force the decree-holder is entitled to enforce it as it stands and the judgment-debtor is bound to obey it as it stands. The rights and liabilities under the decree cannot be whittled down without interference with the decree.
5. When a suit on a mortgage proceeds to a decree the liability of the mortgagor, which so long was under the contract is crystallised or merged into the liability under the decree. The only liability that remains is the decretal liability. If thereafter the judgment-debtor seeks relief on the footing that he is not bound to pay a portion of the interest awarded by the decree, the relief that is sought is relief from the operation of the decree and if it is granted it must be carved out, as it were, from the decree.
6. In order to exercise my powers under Section 36(1)(c) of the Act, i.e., in order to relieve the borrowers from all liability to pay interest in excess of the limits specified in Section 30, I must first take hold of the decree, examine it and then relieve the borrowers from the performance of so much of it as the Act allows. In other words I must first re-open the decree. I find it impossible to appreciate how a decree can remain intact when a portion of it is truncated and nullified. The relief claimed can be granted only after re-opening the decree. This view was taken by Mookherjee J. and myself in the case in civil Revision case No. 257 of Anath Nath Sarkar v. Rajendra Nath Bhattacharjee : AIR1942Cal120 decided by us on 18th June 1941. Once the decree is re-opened, the Court must under the provisions of Section 36(2), pass a new decree in accordance with the provisions of the Act. In the present case the Court must pass a new decree in accordance with the provisions of Section 34(1)(a).
7. I, therefore, set aside the decree which has been passed in this suit and pass a new decree in accordance with the terms of Section 34(1)(a). The decretal amount shall be paid in three annual instalments, the first instalment shall be paid within one month of the confirmation of the Registrar's report. In default of payment of any such instalment, the decree-holders may proceed under Section 34(1)(a)(ii) after giving one month's notice to the defendant. The sale is set aside and the commission paid to the Registrar shall be refunded to the decree-holders. The judgment-debtors shall pay all the costs incurred up to date including the costs of these applications. Certified for counsel as regards the Chamber application.