1. This rule is directed against an order of the Subordinate Judge, Second Court, Comilla, dated 5th November 1941, made on an application presented by the defendant opposite party under Section 36, Bengal Money-Lenders Act. The opposite party borrowed a sum of Rs. 5437 from the Brahmanbaria Loan Co., on a promissory note dated 25th October 1930, agreeing to pay interest at the rate of 12 per cent, per annum. The petitioner before us was a depositor in the aforesaid loan company and had a deposit of Bs. 7000 to his credit with the latter. When this deposit matured, the loan company endorsed over to the petitioner the promissory note executed by the opposite party, in part payment of the deposit. The petitioner as assignee of the promissory note thereupon instituted a suit against the defendant opposite party and got a decree for a sum of Rs. 7390-9-0 together with costs on 10th May 1934. The decree was executed several times and a portion of the decretal dues was realised. The last execution case was started on 26th September 1940, and during the pendency of the same the opposite party made the application for reopening of the decree under Section 36, Bengal Money-Lenders Act. A preliminary point was raised as to whether the petitioner as an assignee of the debt prior to the passing of the Money-Lenders Act was entitled to protection under Section 36(5) of the Act. The trial Court answered this question in the negative and by its order mentioned above held that the decree was liable to be reopened. It is the propriety of this decision that has been challenged in this rule.
2. Mr. Bose who appears for the petitioner has contended before us that the operation of Section 36(5), Bengal Money-Lenders Act, is not confined to post-Act assignees merely and that a pre-Act assignee also comes within its protective provision. This identioal point came up for consideration in several recent cases before this Court but unfortunately the decisions have not been at all uniform. The first pronouncement on the subject was made by Edgley J. in Manmatha v. Renula : AIR1941Cal681 and it was held by the learned Judge that the Bengal Money-Lenders Act imposed the same disabilities upon an assignee of the debt, to whom the assignment was made prior to the Act, as upon the lender himself and such assignment was not protected by Section 36 (5) of the Act. The decision of Edgley J. was set aside on appeal by his Lordship the Chief Justice sitting with Nasim Ali J., vide Manmatha v. Renula ('41) 45 C.W.N. 1091, but though they concurred in setting aside the judgment of Edgley J., they expressed divergent views so far as the present question is concerned. The learned Chief Justice was of opinion--though he expressly said that it was not necessary to decide the point for purposes of that case--that Section 36(5), Bengal Money-Lenders Act covers a pre-Act assignee whereas Nasim Ali, J. I agreed with Edgley J. in holding that the sub-section was confined to a post-Act assignee. The same divergence of opinion is noticeable in two recent cases which have since been reported. In Bhupendra Nath Dutt v. Debendra Nath : AIR1942Cal370 , Sen J. took the view that Section 36(5) was applicable to assignments made before the Act whereas a contrary decision was given by Roxburgh J. in Krishnadhan v. Nalini Chandra ('41) 46 C.W.N. 38.
3. It is not disputed that if the words of Section 36(5), Bengal Money-Lenders Act are given their plain and literal meaning, there is nothing in them which would exclude from their scope a pre-Act assignee.
4. To attract the operation of this sub-section, two conditions have to be fulfilled. The Court is to be satisfied first that the assignment was bona fide and (2) that the assignee had not received the notice referred to in Clause (a) of Sub-section (1) of Section 28 of the Act. Both these conditions can certainly be satisfied in a case of a pre-Act transfer. Whether the transaction is bona fide or not is a question of fact which has got to be decided on the circumstances of each individual case and in the case of a pre-Act transferee the second condition must necessarily be fulfilled as the question of notice under Section 28(1)(a) would not arise, the section itself being not in existence at that time. But it may be argued that the intention of the Legislature was that Section 36(5) would be applicable only in those cases where the notice contemplated in Section 28(1)(a) could be given and consequently a pre-Act transfer is wholly outside the scope of the sub-section. A literal construction can indeed be departed from if a strict and rigid adherence to it would frustrate the intention of the Legislature and lead to inconsistency or manifest injustice. It is necessary, therefore, to consider whether the scheme of the enactment or the eon-text in which these words are used, or the consequences to which the literal interpretation would lead, point to the conclusion that that interpretation does not express the real intention of the Legislature.
5. The main scheme of the Act is undoubtedly to make better provision for the control of moneylenders and for the regulation and control of money-lending. To find out how far the rights of an assignee of a loan are regulated by the provisions of the Act we will have to advert to Ch. 5 of the Act which purports to deal with assignments. That (chapter comprises two sections, namely, Sections 28 and 29. Section 28 deals with post-Act assignments and is almost a reproduction of Section 16, English Money-Lenders Act of 1927. Sub-section (1) of this section provides that when a debt in respect of a loan advanced by the lender whether before or after the commencement of the Act is assigned to any person, the assignor shall before the assignment is made, give to the assignee a notice in writing, that the debt, interest thereon, agreement or security is affected by the provisions of the Act. He has also to give certain informations which are prescribed in Clause (b) of the sub-section, Failure to comply with these provisions constitutes a punishable misdemeanour under Sub-section (2) which further provides that any person who acts in contravention of these provisions shall be liable to idemnify any person who is prejudiced by such contravention. The position, therefore, is that a post-Act assignee if he is given a notice under Section 28(1) acts with his eyes open and cannot claim any protection and if, on the other hand, he does not receive any notice the borrower who is damnified can claim indemnity from the assignor who omitted to give such notice. We now come to Section 29 which consists of three parts. The third part is immaterial for our present purposes. The first part deals with assignment of debt due to a lender in respect of loans after the commencement of the Act, and ex hypothesi the assignment must also be after the Act. In such cases, the provisions of the Act are made applicable to the assignee of a debt subject to the exception in case of a bona fide assignee or holder for value without any notice of any defect due to the operation of the Act. Here again, there is reiteration of the indemnity clause and the borrower can claim indemnity from the lender for any loss that he suffers because of the omission on the part of the assignor to make the assignee acquainted with the true position of the debt. Part (2) of the section lays down that:
the provisions of this Act shall apply and be deemed always to have applied and shall continue to apply as respects any debt due to a lender or moneylender in respect of loans advanced by him before the commencement of this Act, notwithstanding that the debt may have been assigned to any assignee; and except where the context otherwise requires, references in this Act to a lender or moneylender shall accordingly be construed as including any such assignee as aforesaid.
6. It may be mentioned here that whereas Section 29(1) corresponds to Section 17, English Money-Lenders Act of 1927, there is no provision in the English Act corresponding to Section 29(2). The object of the Legislature was apparently to make the provisions of the Act retrospective with regard to pre-Act loans and it might have been further intended that no lender should be allowed to defeat these provisions by making an assignment. There is no doubt that this sub-section contemplates a pre-Act loan, but whether it contemplates a pre-Act assignment also is not very clear, though the words used are very general. The utmost that can be said is that Section 29(2) contains the general provision relating to assignment of debts and ordinarily an assignee of a debt contracted prior to the Act will be saddled with the same disabilities as the lender himself. But though this is the general provision, the Act certainly contemplates exceptions to it. Thus in the ease of a post-Act assignment of a pre-Act debt, the provisions of Section 28 would undoubtedly be attracted.
7. As was pointed out by the learned Chief Justice in Manmatha v. Renula ('41) 45 C.W.N. 1091, the Bengal Money-Lenders Act though conceived on a plan was altered a good deal in its passage through the Legislature. It may be that in course of its passage certain defects were noticed which were originally left unprovided for and they were sought to be removed by making additional provisions in other parts of the Act which look like so many patch works. But it is not our business to find fault with the Legislature. We are only to see whether the whole Act could be interpreted in a consistent way. We think that the provision of Section 36(5) of the Act is in no way inconsistent with that of Section 29(2). The former may be an exception engrafted upon the latter but it is by no means repugnant to the same. When a pre-Act debt is assigned after the Act, it is not disputed that Section 36 (5) would be applicable, even though such cases come under Sub-section (2) of Section 29. There is nothing unreasonable if we hold that a pre-Act assignment is also included in Section 36(5). The post-Act assignee enjoys certain privileges under the Act. He is entitled to a notice regarding the character of the debt and if he receives no notice, the Act does not touch him at all. There is no justification to hold that the Legislature intended that the position of the pre-Act assignee should be worse, and in these circumstances it would be quite consistent with reason to interpret Section 36(5) in its plain grammatical sense which would bring a pre-Act assignee within the fold of its protection.
8. Some doubt is sought to be thrown on this point by reason of the proviso to Section 36(1)(d), Money-Lenders Act. Under Section 36(1)(d), if anything has been paid or allowed in account on or after 1st January 1939, in excess of the limits laid down in Section 30, Sub-sections (1) and (2), the lender may be directed to refund that amount. The proviso attached to it lays down that in case of assignment of such loan the assignee or assignees may be directed only to make pro rata payment together with the lender in such manner as the Court considers proper. The proviso may certainly include the case of an assignment made between 1st January 1939, and the date of the commencement of the Act, and it is said that the adjustment between the assignor and the assignee which the proviso contemplates would be meaningless if a pre-Act assignee is protected by Section 36(5). We are not much impressed by this argument. It was pointed out by Nasim Ali J. in his judgment referred to above: vide Manmatha v. Renula ('41) 45 C.W.N. 1091 that the object of Section 36 (5), Bengal Money-Lenders Act was to protect a post-Act assignee who but for this sub-section would be bound to make a refund under Section (36)(1)(d) even if he did not receive any notice under Section 28(1). It would not be unreasonable, in our opinion, to hold that an assignee to whom the debt was transferred after 1st January 1939, and before the passing of the Apt would also be protected by Section 36(5) and would be exempted from making proportionate refund, which he otherwise would be bound to make, under the proviso to Section 36(1)(d). It is common knowledge that legislation on these lines was long expected before the Money-Lenders Act was actually passed and a question of bona fides would certainly arise in case of transactions after 1st January 1939, even though they were prior to the Act. We do not agree with the Chief Justice that Section 36(5) would not be applicable to cases where the proviso to Section 36(1)(d) applies. The opening words of Section 36 (5) are 'Nothing in this section;' and Section 36 certainly includes its different clauses together with the provisos attached to them.
9. Our conclusion, therefore, is that there are no sufficient reasons to depart from a literal construction of the words used in Section 36(5), Money-Lenders Act and we are not justified in putting a narrow interpretation upon the sub-section upon a speculative view of the possible intentions of the Legislature. As there is no pronouncement of a Division Bench on this point as yet, it is not necessary for us to refer the matter for decision by a Full Bench. The result, therefore, is that this rule is made absolute, and the order of the Court below is set aside. As it is not disputed that the petitioner is a bona fide assignee, we hold that he is protected under Section 36(5), Bengal Money-Lenders Act and that the decree cannot be reopened. The petitioner is entitled to his costs of this rule. We assess the hearing-fee at two gold mohurs.