R.P. Mookerjee, J.
1. This appeal is directed against an order passed by the Subordinate Judge of Nadia in certain proceedings which had been Initiated under. Section 36, Bengal Money-lenders Act.
2. The respondent-debtor had originally borrowed from the appellant certain sums of money on-executing a number of promissory notes. A portion of the interest due was paid, and the balance was secured by executing a mortgage on 9-4-1927, the interest stipulated being 12 per cent, per annum with six monthly rests. In February, 1931 the appellant, Kumarkhali Banking Corporation Ltd. obtained a decree for Rs. 6300 and odd being, the balance due under the mortgage. After various attempts the mortgaged property was sold for Rs. 5000 on 7-12-1939, in execution of the said-decree, the decree-holder being the auction purchaser. On 11-6-1940, the 'decree-holder-auction' purchaser sold that property to a third party for a consideration of Rs. 5800. On the passing of the Bengal Money-Lenders Act (x  of 1940) the debtor made an application under Section 36 of the said Act in August 1941 for the reopening of the decree, and previous transactions and for other reliefs. The decree was reopened by the Subordinate Judge. An appeal was taken to this Court, being. Appeal from Original Decree No. 148 of 1942. It was decided that on the reopening of the previous transactions the principal should be fixed at Rs. 3000. There was an order for remand for calculating and ascertaining the amount which was to be refunded by the creditor after taking; into account the amount which the debtor was entitled to get credit.
2a. Before the learned Subordinate Judge statements of account were placed showing the amounts paid by the debtor from time to time. In view of the fact that the mortgaged property, though originally purchased by the decree-holder, had been transferred to a third party, the debtor was not entitled to get back possession of the same. The learned Subordinate Judge, however, held that although the mortgaged property had been sold at the court sale to the decree-holder for Rs. 5000 but as the mortgagee-auction-purchaser had sold the property thereafter for Rs. 5800, the latter must be deemed to have received Rs. 5800 for the property; that higher amount has been taken into account for determining the amount of refund due to the judgment-debtor.
3. Before the mortgage suit had been filed and also before the property was sold at the court sale payments had been made towards the interest due the amount due being there calculated at the bond-rate which was higher than the maximum fixed under the Bengal Money-lenders Act. The learned Subordinate Judge in calculating the total liability of the debtor as on the date of sale did not give credit to the debtor towards the principal such amounts as were paid as interest but were in excess of the maximum amount as under the Bengal Money-lenders Act. An order for refund of Rs. 2299-7-7 with interest has accordingly been: made.
4. The present appeal has been preferred by the Banking Corporation and is limited to the direction given by the lower Court for proceeding on the basis that the judgment-debtor is to be given credit of Rs. 5800 as the value of the mortgaged property and not Rs. 5000-the amount for which the property was sold in the court-sale.
5. A memorandum of cross-objection has been filed by the debtor complaining against the method of accounting adopted by the lower Court under which the amounts paid towards interest, but now found to be in excess of the amount then legally due has not been credited for the reduction of the principal amount.
6. In our view both the appeal and the cross-objection must succeed. Under Section 36(1)(d), Bengal Money-lenders Act, the Court has power to direct a refund :
'If anything has been paid or allowed in account on or after 1-1-1939, in respect of the liability referred to in Clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid.'
The amount which is to be taken into consideration is that which has been paid or allowed in account. All sums paid by the debtor to the creditor and the value of any property sold are to be taken into account. It is true that there is no direct reference in the provision above referred to as to what is the value of the mortgaged property as is to be taken into account. But if reference is made to Clause (e) of sub-section (2) of Section 36 of the same Act, it will be apparent that what the Legislature had in view was the amount for which the decree-holder has purchased the said property in execution of the reopened decree.
7. This is the interpretation which ought to be placed on Section 36(l)(d) of the Act as being the only reasonable and equitable interpretation possible. If extraneous circumstances other than the price fetched at the court-sale are to be allowed to be taken into consideration for determining the value of the property sold under the reopened decree, in certain cases there would be anomalous and inequitable position created. There may be an occasion when a property purchased at the higher price by the mortgagee decree-holder is sold for a lesser amount to a third party. It will be most unreasonable to compel the debtor to get credit only for the lesser amount; so far he is concerned, the property is valued at the figure at which it was sold at the court sale in execution of the mortgage decree now reopened. Moreover, if subsequent transactions are taken into consideration that would be against the spirit of the provisions contained in this part of the Bengal Money-lenders Act. Even when after the decree is reopened and the debtor gets back from the mortgagee auction purchaser possession of the property previously sold in execution of the decree, there is no question of taking accounts between the mortgagor and the mortgagee in respect of the period during which the mortgagee auction purchaser is in possession from after the sale to the date when possession is redelivered to the debtor.
8. In taking accounts the debtor can, therefore, in the present case, get credit for the amount for which the property was sold at the court-sale. Rs. 5000 is to be given credit to the judgment-debtor in the accounts to be taken. The appeal on, behalf of the decree-holder, therefore, succeeds.
9. The objection raised in the memorandum of cross-objection is also unassailable. The principle enunciated in Pramatha Nath v. Sant Kumar, 53 Cal. W. N. (F.R.) 12, is clearly attracted. When payments were made in the past though purporting to be towards the interest due, but is now found that such payments were in excess of the amount of interest then due-the balance in excess must be deemed to have been paid towards the outstanding principal. Interest accruing thereafter will be on such reduced amount of principal.
10. Both thee appeal and the cross-objection are accordingly allowed. The decree passed by the learned Subordinate Judge cannot be maintained, and he is directed to take the accounts and pass the decree in terms of the directions given in this judgment-(i) The Court will take the property sold under the mortgage decree as at Rs. 5000 and not Rs. 5800, and (ii) allowing credit in favour of the debtor towards the outstanding principal for the balance of the amounts paid towards interest but not the interest legally due was less-as in Prama-thanath v. Sant Kumar, (53 Cal. W. N. (F.R.) 12), (supra).
11. In the circumstances of this, there will be no order as to costs in this Court.
12. I agree.