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Judgment
S. Acharya, J.—M.A. 49/75 has been filed by the decree holder in the execution Proceeding No. 22 of 1970. M.A. 69/75 has been filed by the judgment debtor in the said execution proceeding. The two appeals were taken up together for hearing and this following judgment will govern both the appeals.
In respect of four different pronates, Money Suit No. 3/75 was filed for realisation of the principal sum of Rs. 29,164.62 P. with interest of Rs. 17,916.04 P. thereon, and for pendente lite and future interest. The said suit was decreed for Rs. 47,080.56 P. with pendente lite and future interest thereon at 6 per cent per annum from the date of institution of the suit title the realisation of the said amount. It was also decreed that the judgment debtor would pay the cost of the suit amounting to Rs. 5,325.62 P.. The Court directed the judgment debtor to pay the decretal dues by instalments of Rs. 1000/ -. The decree holder started execution proceedings for the realisation of the decreetal amount. In that execution proceeding the judgment debtor on 12.11-1974 filed a petition stating that by 16-9-1974 he had already paid Rs. 60,300/ - and therefore no further amount could be realised from him. That petition was registered as M.J.C. 167/74 and the Sub-Judge in that M.J.C. directed that the execution shall proceed for the realisation of the amounts as decreed in the suit with pendente lite and future interest at 6 per cent per annum only on the principal sum of Rs. 29,164.52 P.. The decree holder and the judgment debtor not being satisfied, have preferred these two appeals against the said order. The decree holder in his appeal (M.A. 49/75) contends that future and pendente lite interest should be calculated not on the principal amount but on the decreetal amount of Rs. 47,080.56 P.. The judgment debtor in his appeal (M.A. 69/75) contends that the decree holder is not entitled to realise any amount whatsoever from him by way of principal and/or interest thereon as he has already paid more than double the principal sum of Rs. 29,164. 52 P. to the decree holder. It is submitted that apart from paying the principal amount the judgment debtor has also paid to the decree holder an amount in excess of the principal sum by way of interest on the said loan, and so the judgment debtor is not to pay any further amount on the said loan.
It is urged by Mr. Mohanty, the learned Counsel for the Appellant in M.A. 69/75, that as more than double the principal amount has admittedly been paid by the judgment debtor to the decree holder on the said loan the Court is precluded from passing any order for the realisation of and the decree holder is prohibited from realising any further amount on the said loan in view of the new Sections 7-C and 7-D in Chapter II-A of the Money Lenders Act. Section 7-C and 7-D are quoted below:
7-C No money-lender shall recover towards the interest in respect of any loan advanced by him, an amount in excess of the amount of the principal.
7-D. Any loan in respect of which the moneylender has realised from the debtor an amount equal to, or more than, twice the amount of the principal, shall stand discharged and the amount, if any, so reused in excess of twice the amount of the loan shall be refunded by the money-lender to the debtor.
The said two sections came into force on and from the 22nd September, 1975. It is contended, and in my opinion rightly that since the time Sections 7-C and 7-D came into force there is a total prohibition for realisation of an amount by way of interest in respect of a loan if that amount is in excess of the principal amount. The learned Counsel appearing for the decree holder contends that the recovery contemplated u/s 7-C and 7-D does not and cannot affect the recovery made through Court, as (1) the prohibition contemplated u/s 7-C is applicable only against the money lander; and (ii) the judgment debtor after the passing of the decree has to pay the decreetal dues in full. I do not agree with the above stand taken on behalf of the decree-holder. Recovery of a loan by a money lender through the agency of a Court is also a mode of recovery of loan contemplated under Sections 7-C and 7-D, and the money lender cannot recover towards interest in respect of a loan an amount in excess of the amount of the principal. If that is not so the beneficial provisions of Sections 7-C and 7-D will become absolutely ineffective and the object with which the said sections have been en grafted in the Money Lenders Act shall be completely frustrated. If the provisions of Sections 7-C and 7-D are made applicable only to recovery or realisation of loan out of Court and not to recovery of the same through Courts, then all creditors will rush to the Court and will ask the Court to give them decrees enabling them to realise money more than double the principal amount on their loan, and thus frustrate the very object and the purpose with which the said two sections have been legislated.
It is urged on behalf of the decree holder that u/s 10, the civil Courts can pass decrees for realisation of pendente lite and future interest which together may ultimately exceed the principal amount, and that power of the Courts to pass such decree is not and cannot in any way be affected by Sections 7-C and 7-D of the Act as Section 10 is still in force. Section 10 of the Act merely prohibits the Courts to pass a decree in respect of a loan, for an amount of interest for the period preceding the institution of the suit which together with any amount already realised an interest through court 0''1'' otherwise, is greater than the amount already advanced. This Court in answering the question raised 10 the case reported in P.S.N. Murty v. Suryanarayan and Anr. 32 (1966) C.L.T. 264, (cited on behalf of the decree holder); observed that the expression ''for an amount of interest for the period preceding the institution of the suit'' in Section 10 makes it absolutely clear that the realisation of interest beyond an amount equal to that of the principal is prohibited only up to the date of the institution of the suit, and that section does not put an embargo on realisation of pendente lite and future interest on the principal. So it is not correct to say that Section 10 provides for realisation of further amount by way of pendente lite and future interest which may exceed the principal. Of course on an examination of the scope of Section 10 this Court in the aforesaid case answered the question raised in that case in the manner aforesaid. The decision in that case on the above question was made on the law as existing at that time, and the said pronouncement cannot hold good in view of the new provisions of Section 7-C and 7-D now coming that field. In my view the legislature in order to relieve the hardship and burden caused to the judgment debtors in paying lot of money by way of pendente lite and future interest far in excess of the principal loan, enforced the embargo as per Sections 7-C and 7-D of the Act, and so now the money lenders cannot in any manner realise by way of interest any amount in excess of the principal amount, whatever mode of recovery is adopted by him - including recovery of the same through Court.
It is contended on behalf of the decree holder that the amount decreed by a Court in a suit of this nature cannot be regarded as the principal or interest amount on a loan, but is the decretal amount directed by the Court to be paid by the judgment debtor, and so the judgment debtor is bound to pay the said decretal dues strictly in accordance with the decree. In support of the above submissions the Respondent''s counsel cited the decision reported in Rai Manmatha Nath Bose and Others Vs. Sm. Renula Bose and Others, , wherein it has been observed that interest due on the decreetal amount has no connection with the original contract and that the interest payable on the decretal amount must be regarded as a liability included in the decree. No doubt the above view has been taken on the observations of the Privy Council in 63 I.A. 114, which is as follows:.
When once a decree has been passed the loan or debt as the subject of enforcement no longer exists; it is in effect merged in the decree, and the allowance of interest on the decree is not the allowance of additional interest on the loan or debt.
The above observations of the Privy Council lay down the general principle. Their Lordships while saying so were not any way concerned with the definition of or meaning attributed to the word "interest" in any Act. The money Lenders Act in Section 2(h) defines the word ''.interest" as follows:
interest" means rate of interest and includes the return to be made over and above what was actually lent whether the same is charged or sought to be recovered specifically by way of interest or otherwise:
Therefore any amount which is recovered or sought to be recovered either by way of interest or otherwise, in the realisation off a loan, becomes interest as per the definition of that word in this particular Act. So all amounts sought to be recovered on the loan over and above the principal amount have to be termed as ''interest'' as per the law in this point in this State. My above view gets support from the case reported in Raimanmatha Nath Bose and Ors. v. Srimati Renuka Bose and Ors. 1966 I.L.R Cutt 246, wherein it has been held that by its very definition ''interest'' covers cases of excess payment to the money-lender over and above what was advanced as principal irrespective of the description, whether it is termed as interest or not. It has been further held that "interest connotes both past and future interest".
Considering the view taken in the above case and the definition of the word "interest" in Section 2(h) of the Act, including within its meaning certain payments which generally are not called interest in the ordinary parlance, I am firmly of the opinion that all amounts which are decreed to be paid on the principal must be construed as interest on the loan for the recovery of which the suit was filed. The const decreed in such a suit cannot of-course be related to the loan and any amount decreed to be paid on that account cannot come within the word "interest" as defined in Section 2(h) of the Act.
It is submitted by the counsel appearing for the decree holder that though the word "interest" in the Bengal Money Lenders Act is given almost the same meaning u/s 2(8) of the said Act, in the case reported in Rai Manmatha Nath Bose and Others Vs. Sm. Renula Bose and Others, , the above observations were made which are not in conformity with my above view of the definition. There is nothing in the said decision to show that the attention of the learned Judge who decided the case was drawn to the definition of the word "interest" in the Bengal Money Lenders Act. I am doubtful if the same observation could have been made if the attention of the Judge deciding that case had been drawn to Section 2(8).
I am of the view that because of the wide meaning of the word "interest" given in Section 2(h) of our Act, all amounts decreed by the Court to be paid by a debtor in respect of the loan in question will be interest on the loan, and recovery or realisation of such sums must be limited restricted and governed by the provisions of Section 7-C and 7-D of the Act.
It is further contended on behalf of the decree holder that the right to realise the decreetal amount as per the decree of the Court is a vested right and the same cannot be said to have been effected in any manner by the provisions of Section 7-C and 7-D of the Act. Sections 7-C and 7-D are beneficial provisions en grafted in the Act by the Orissa Money Lenders (Amendment) Act, 1975 and they came into force with effect from 22-9-1975. These two sections cover a very wide field and by provisions made in Sections 7-C and 7-D the legislature intended to establish thereby a rule of universal application. The plain object of these sections is to protect the debtors from the claws of the creditors from a particular stage. That being so the provisions of Sections 7-C and 7-D will hold good and will affect the vested rights of the decree holders to the extent provided in the said section. In the case reported in Shah Bhojraj Kuverji Oil Mills and Ginning Factory Vs. Subbash Chandra Yograj Sinha, their Lordships of the Supreme Court in para 12 of the said decision have observed that while it is the ordinary rule that substantive rights should not be held to be taken away except by express provision or clear implications, many Acts, though prospective in form, have been given retrospective operation, if the intention of the legislature is apparent. This is more so, when acts are passed to protect the public against some evil or abuse. In Dayawati and Anr. v. Inderjit and Ors. AIR 1966 SC 1428, their Lordships of Supreme Court have held that if a new law speaks in language, which, expressly or by clear intendment takes in even pending matters the Court of trial as well as the Court of appeal must have regard to an intention so expressed, and the Court of appeal may give effect to such a law even after the judgment of the Court of first instance. The distinction between laws affecting procedure and those affective vested rights does not matter when the Court is invited by law to take away from a successful Plaintiff, what be has obtained under judgment.
On the above considerations I am firmly of the opinion that the provisions of Sections 7-C and 7-D hold good even in respect of matters in which Courts have already passed decrees in a different manner.
The submission on behalf of the decree bolder that the provisions of Section 7-C and 7-D are not retrospective so as to effect vested rights, does not arise for consideration. In my view even since the time Sections 7-C and 7-D came on the statute book an embargo of a particular nature on recovery and realisation of interest or loans came to be enforced on and from that date. So for the enforcement of the provisions of these two sections one need not probe into the question as to whether they have any retrospective operation or not.
On the above discussions and considerations. I am firmly of the view that because of the provisions of Sections 7-C and 7-D the decree holder now cannot execute the decree for the realisation of any further amount on the loan as admittedly he has already been paid more than double the principal amount of the loan. The decree holder of course can still realise any amount outstanding against the judgment debtor on account of the cost decreed in this suit. On the above view of the matter the appeal filed by the judgment debtor i.e. M.A. 69/75 has to be allowed and is hereby allowed but in the circumstances of the case there shall be no order as to costs of this appeal.
In view of the above decision on the matter the appeal filed by the decree holder i.e. M.A. 49/75. claiming further recovery of pendente lite and future interest on Rs. 47,080.56 can have no merit and is accordingly dismissed. Parties shall bear their own costs of this appeal.
In the result, therefore, M.A. 49/75 is dismissed
and M.A. 69/75 is allowed, both without costs.