Devraj Ray Pandey v. Lalji Moearji Ranchord — 1943 DIGILAW 191 (CAL)

JUDGMENT 1. On the 6th October, 1936, the Petitioners before us and others borrowed a sum of Rs. 10,000 from Opposite Party decree-holder Lalji Moraji Ranchord. The said Petitioners and others executed a mortgage on the same day stipulating to pay interest at the rate of 7 per cent, with annual rest. In 1940, the said Opposite Party instituted a suit on the said mortgage, the suit being No. 14 of the Court of the Subordinate Judge at Darjeeling. On the 29th May, 1941, a preliminary decree was passed ex parte. The interest up to the date of grace as provided for in that decree was calculated at Rs. 3,735-7-9. The total amount for which a preliminary decree was passed was Rs. 15,079. That sum was made up of principal advanced, namely, Rs. 10,000, Rs. 3,735-7-9 being the interest calculated up to the date of grace as fixed in the preliminary decree and the balance represented cost. The final decree was made on the 18th November, 1941, for an amount of Rs. 15,507-0-6 which included the cost of the final decree. The final decree provided for the payment of interest on the decretal amount at the rate of 6 per cent, from the date of the final decree till realization. On the 20th December, 1941, the decree-holder applied for execution of the decree. The terms of the sale proclamation were settled and the sale proclamation was issued on the 23rd May, 1942, fixing the 16th July, 1942, for the date of the sale. The amount recoverable was stated in the sale proclamation to be Rs. 16,242 odd. That amount was made up of the amount mentioned in the final decree together with interest on the decretal amount at 6 per cent. calculated from the date of the final decree till the date of the sale which as we have already stated, was fixed for the 16th July, 1942. In the course of the execution proceedings three of the judgment-debtors who are Petitioners before us, filed an application before the executing Court. That was a composite application. Some of the grounds taken in that application related to objections that can be filed under sec. 47 of the Code of Civil Procedure. The other grounds mentioned in the said application would properly pertain to an application under sec. 36 of the Bengal Money-Lenders Act. That was a composite application. Some of the grounds taken in that application related to objections that can be filed under sec. 47 of the Code of Civil Procedure. The other grounds mentioned in the said application would properly pertain to an application under sec. 36 of the Bengal Money-Lenders Act. The matter was disposed of by the learned Subordinate Judge in one order, namely, Order No. 18 dated the 8th August, 1942. He overruled all the objections raised in the aforesaid application of the said judgment-debtors, that is to say, he overruled those objections which would properly come under sec. 47 of the CPC as also the other objections which would, if allowed, support the prayer made by the judgment-debtor under sec. 36 of the Bengal Money-Lenders Act for re-opening the mortgage decree. Against the said order, an appeal was filed to this Court. That appeal concerned the objections which would properly come under sec. 47 of the Code of Civil Procedure. It was numbered First Miscellaneous Appeal No. 176 of 1942. The appeal was not ultimately pressed and was dismissed for default by a Division Bench of this Court on the 22nd June, 1943. An application under sec. 115 of the CPC was also filed by the Petitioners against that portion of the order by which the learned Subordinate Judge refused to re-open the decree under the provisions of sec. 36 of the Bengal Money-Lenders Act. That application has now come up before us as a contested application. The scope of this application is whether the learned Subordinate Judge was right in saying that he had no power to reopen the mortgage decree inasmuch as the facts established in the case had not empowered him to follow that course. The learned Subordinate Judge pointed out that the amount of interest that has been awarded by the decree up to the period of grace, which amount has been included in the final decree, is not in excess of the amount that may be allowed if the interest is calculated up to the said date at the rate of 8 per cent. per annum, simple. This finding of the learned Subordinate Judge has not been challenged before us, nor can it be challenged. The final decree passed, however, is in contravention of sec. per annum, simple. This finding of the learned Subordinate Judge has not been challenged before us, nor can it be challenged. The final decree passed, however, is in contravention of sec. 31 of the Bengal Money-Lenders Act, for the loan having been incurred before the commencement of the Bengal Money-Lenders Act and the decree being passed after the said Act had come into force, post-decretal interest could not be allowed in view of the clear provisions of sec. 31 of the Bengal Money-Lenders Act. That is the only defect in the final decree. The question, therefore, resolves itself into a very simple proposition, namely, if the decree is otherwise in order, can it be re-opened under the provisions of sec. 36 of the Bengal Money-Lenders Act because the decree is in contravention of sec. 31 of the Bengal Money-Lenders Act? There cannot be any question that the learned Subordinate Judge was wrong in awarding post-decretal interest. But the question is the manner in which that portion of the decree is to be set right. The normal method would be for the judgment-debtors to prefer an appeal against the decree itself or to make an application for review before the learned Subordinate Judge under Or. 47, r. 1 of the Code of Civil Procedure. But the time for pursuing either of those two remedies has elapsed, as the period of 90 days which is the period fixed under the Limitation Act for filing an appeal to this Court or making an application for review under the first part of Or. 47, r. 1 of the Code of Civil Procedure, has long passed by. The judgment-debtors can only get relief now in respect of that portion of the decree which has allowed post-decretal interest if they can invoke the powers of the Court given under sec. 36 of the Bengal Money-Lenders Act. The relevant provision of that section is sub-sec. (1) (c), that is to say, they can get relief against that provision in the decree only if they can ask the Court to re-open the decree under the provisions of the said clause. The relevant portion of sec. 36 of the Bengal Money-Lenders Act. The relevant provision of that section is sub-sec. (1) (c), that is to say, they can get relief against that provision in the decree only if they can ask the Court to re-open the decree under the provisions of the said clause. The relevant portion of sec. 36 is in these terms: If in any Bait to which this Act applies, the Court; has reason to believe that the exercise of one or more of the powers under this section will give relief to the borrower, it shall exercise all or any of the following powers as it may consider appropriate, namely, sub. clause (c), release the borrower of all liability in excess of the limits specified in clauses (1) and (2) of sec. 30. 2. Sec. 36 does not give the power to the Court to re-open a transaction or a decree simply because the provision of sec. 31 of the Bengal Money-Lenders Act had been contravened. In the case of Accowrie Mukherjee v. Sailendra Mohan Dey 45 C. W. N. 548 (1941), Mr. Justice Nasim Ali, in delivering the judgment of the Court made the following observations: The argument on behalf of the Appellant is that the word ' transaction' in sub-sec. (1) (a) of sec. 36 includes a decree. The word transaction', however, has not been defined in the Act. Sub-sec. (1) empowers the Court to exercise certain powers. Where no decree has been passed, the question of reopening a decree in the exercise of the powers under sub-sec. (1) would not arise. Where, however, decrees have been passed already and the Court while exercising all or any of its powers under sub-sec. (1) finds that all or any of its powers cannot be exercised without reopening the decree, the Court can reopen it. The power of reopening the decree flows from and is dependent on powers which the Court has been authorised to exercise under clauses (a) to (e) of sub-sec. (1) of sec. 36. It is, therefore, restricted to cases where the question of the exercise of all or any of these powers arises. 3. On the facts of this case, the judgment-debtors cannot get the relief that they have asked for under sec. 36, unless they can establish that by re-opening the decree they would be released of liability in excess of the limits specified in cls. 3. On the facts of this case, the judgment-debtors cannot get the relief that they have asked for under sec. 36, unless they can establish that by re-opening the decree they would be released of liability in excess of the limits specified in cls. (1) and (2) of sec. 30. 4. As we have already pointed out, the total amount of interest up to the date of the suit together with the pendente lite interest up to the date of grace as provided for in the preliminary decree does not exceed the amount of interest on Rs. 10,000 if the calculation be on the basis of 8 per cent. per annum simple. The learned Advocate for the Petitioners, however, contends that we will have to take into account the interest that has been added to the claim from the date of the final decree up to the date of the sale by reason of the provision in the decree allowing post-decretal interest at the rate of 6 per cent. per annum and the total amount of interest up to the date of sale would exceed the amount if interest is calculated at the rate of 8 per cent. simple from the date of the mortgage up to the date of the final decree, that is to say, for the purpose of comparing figures he wants the calculation at the rate of 8 per cent. calculated up to the date of final decree. He says that if we compare that figure with the amount stated in the sale proclamation the last-mentioned amount would exceed the former, that is the amount of interest up to the date of the final decree calculated at the rate of 8 per cent. simple. We cannot accept this contention. As we have already stated, his remedy against the provision in the final decree providing for interest after the date of the decree was by filing either an appeal against the final decree itself or by making an application for review. Both these remedies which were open to him have been lost to him by reason of his own default in allowing time to pass by. So far as the provision for post-decretal interest is concerned, it does not rest on the will of the parties. It is there by reason of the order of the Court. Both these remedies which were open to him have been lost to him by reason of his own default in allowing time to pass by. So far as the provision for post-decretal interest is concerned, it does not rest on the will of the parties. It is there by reason of the order of the Court. In our judgment, the scheme of the Bengal Money-Lenders Act is to cut down the contract rate of interest. We are accordingly of opinion that in considering whether the interest that has been actually allowed by the decree of the Court is in contravention of the provisions of sec. 30 (1) (c), the relevant period would be up to the date of the decree in the case of a suit on a simple money bond and up to the period of grace as provided for in the preliminary decree in a suit on a mortgage. Post-decretal interest that is awarded by the Court either legally or illegally cannot be taken into account in making the calculation. This view of ours in a way gets support from the decision of a Division Bench of this Court in the case of Ramesh Chandra Bhaduri v. Jnanada Prosanna Bhaduri 46 C. W. N. 772 (1941). There the final mortgage decree was passed in October, 1938, in accordance with the form given in the Civil Procedure Code. That decree, therefore, provided for the usual interest on decretal amount, namely, 6 per cent. per annum on the total amount as mentioned in the final decree. The principal was Rs. 8,000 and the interest that had been included in the decree was interest ante litem motam and interest pendente lite, that is to say, up to the date of grace as mentioned in the preliminary decree. The total was Rs. 1,044. The interest ante litem motam worked out at a rate which was much less than 8 per cent. but interest pendente lite was granted at the rate of 12 per cent. per annum. The total interest of Rs. 1,044 which was mentioned in the decree worked out at less than 8 per cent. per annum simple. In coming to the conclusion that the decree could not be re-opened, the amount of interest that had been awarded up to the period of grace as provided for in the preliminary decree and not post-decretal interest was taken into account. 1,044 which was mentioned in the decree worked out at less than 8 per cent. per annum simple. In coming to the conclusion that the decree could not be re-opened, the amount of interest that had been awarded up to the period of grace as provided for in the preliminary decree and not post-decretal interest was taken into account. On the finding that that interest did not contravene the provisions of sec. 30 (1) (c), the Court refused to re-open the decree. 5. We accordingly hold that the learned Subordinate Judge was right in not entertaining the application under sec. 36 of the Bengal Money-Lenders Act on the ground that the Petitioners did not establish any facts which would entitle the Court to exercise any of the powers contained in cls. (a) to (e) of sub-sec. (1) of sec. 36 of the Bengal Money-Lenders Act, 1940, in order to give relief to the judgment-debtors. The result is that this application is dismissed with costs to the decree-holder Opposite Party, hearing-fee being assessed at three gold mohurs.