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Brijraj Marwari and ors. Vs. Anant Prosad - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1942Cal509
AppellantBrijraj Marwari and ors.
RespondentAnant Prosad
Cases ReferredMount Albert Borough Council v. Australasian Temperance and General Mutual Life Assurance Society
Excerpt:
- orderedgley, j.1. the petitioner in this case is applying for certain reliefs under the bengal money-lenders act, 1940, in respect of a promissory note which was executed by him on 10th july 1932. it appears that a suit was instituted in this court on this promissory note on 9th july 1935 and a consent decree was passed against the petitioner on 21st june 1937. the decree-holder now seeks to put the consent decree into execution but the petitioner maintains that it should be re-opened as it falls within the scope of the provisions of the bengal money-lenders act. mr. das on behalf of the respondent in this case contends that the bengal money-lenders act cannot be applicable as the loan was made in bihar and the law applicable to the loan must be that of bihar. he maintains that, having.....
Judgment:
ORDER

Edgley, J.

1. The petitioner in this case is applying for certain reliefs under the Bengal Money-Lenders Act, 1940, in respect of a promissory note which was executed by him on 10th July 1932. It appears that a suit was instituted in this Court on this promissory note on 9th July 1935 and a consent decree was passed against the petitioner on 21st June 1937. The decree-holder now seeks to put the consent decree into execution but the petitioner maintains that it should be re-opened as it falls within the scope of the provisions of the Bengal Money-Lenders Act. Mr. Das on behalf of the respondent in this case contends that the Bengal Money-Lenders Act cannot be applicable as the loan was made in Bihar and the law applicable to the loan must be that of Bihar. He maintains that, having regard to the terms of Preamble to the Bengal Money-Lenders Act, all that the Legislature purported to do in passing this Act was to regulate money-lending business in Bengal and the terms of the Act can have no possible application to the loans made in Bihar.

2. Learned Counsel for the petitioner, on the other hand, maintains that the terms of the Bengal Money-Lenders Act are sufficiently wide to cover a transaction of this sort, especially in view of the fact that the promissory note dated 10th July 1932 contained an express clause to the effect that the principal amount together with interest and compound interest should be paid on demand either at Bhagalpur or Calcutta. The main point for consideration in this case is whether the provisions of the Bengal Money-Lenders Act can govern a loan, such as that with which we are now dealing, which was made outside Bengal. Mr. Sinha on the authority of Beniam & Co. v. L.S. Debono (1924) 1924 A.C. 514 contends that the law of the contract should be lex loci solutions. It was, however, pointed out by the Judicial Committee in Mount Albert Borough Council v. Australasian Temperance and General Mutual Life Assurance Society, Ltd. (1938) 1938 A.C. 224 that the law of the contract depends upon the intention of the parties. In that case their Lordships said that 'the proper law of the contract means that law which the English or other Court is to apply in determining the obligations under the contract. English law in deciding these matters has refused to treat as conclusive, rigid or arbitrary, criteria such as lex loci contractus or lex loci solutionis, and has treated the matter as depending on the intention of the parties to be ascertained in each case on a consideration of the terms of the contract, the situation of the parties, and generally on all the surrounding facts. It may be that the parties have in terms in their agreement expressed what law they intend to govern, and in that case prima facie their intention will be effectuated by the Court. But in most cases they do not do so. The parties may not have thought of the matter at all. Then the Court has to impute an intention, or to determine for the parties what is the proper law which, as just and reasonable persons, they ought or would have intended if they had thought about the question when they made the contract.'

3. In the case with which we are now dealing the intention of the parties on 10th July 1932 clearly was that interest should be paid at a rate which was then legal both in Bihar and Bengal, where the law with reference to money lending transactions was the same. It cannot therefore be said that, by stating that the principal amount might be repaid either at Bhagalpur or Calcutta, they intended to express any preference in favour of the law of either province but from the circumstances which existed at the time when the loan was made I think that the most reasonable way to interpret the contract dated 10th July 1932 is, to hold that the intention of the parties was that the contract should be governed by the law of the place at which the loan was effected, namely, the law of Bihar. The question then arises whether the Bengal Legislature in enacting the Bengal Money-Lenders Act, 1940, intended to make its terms applicable to money-lending transactions which may have taken place outside the province. Mr. Sinha relies on the terms of Section 36 of the Act which direct the Courts in Bengal to give relief to borrowers 'in any suit to which this Act applies.' This expression is defined in Section 2(22) of the Act. But in neither of these sections do we find any clear terms to indicate that the Bengal Legislature intended to affect loans other than those which had been made in Bengal. On the other hand, the Preamble to the Act describes this measure of legislation as 'an Act further to regulate transactions of money lending in Bengal.' Mr. Sinha argues that this Preamble should be interpreted to mean that the Legislature intended to enact a statute which would regulate in Bengal all transactions relating to money-lending. In my view however this is not what the Preamble states. I think the expression 'transactions of money-lending in Bengal' can only mean transactions of money-lending which take place in Bengal. If it had been the intention of the Legislature to affect such transactions which take place elsewhere they should have used more precise language. My conclusion is that the Bengal Money-Lenders Act cannot apply in the case with which we are now dealing and, in these circumstances, this application must be dismissed with costs.


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