JUDGMENT 1. The facts which are not in dispute in this appeal are these: The Appellant borrowed Rs. 8,00,000 from the Respondent by executing in his favour a mortgage bond on the 12th day of December, 1923, with interest at 8 1/4 per cent. per annum with six-monthly rests. The date fixed for repayment of the loan was 12th December. 1928. One of the stipulations in the bond was that "after the 12th day of December, one thousand nine hundred and twenty-five, and until all monies secured by the mortgage bond are called in by the mortgagee, the mortgagor will be entitled to make part-pavements towards the principal sum of Rs. 8,00.000 by instalments of Rs. 10,000 or any multiple of Rs. 5,000." From 1st September. 1931, the rate of interest was raised to 9 1/4 per cent, per annum with six-monthly rests-the time for repayment was extended to 30th of September, 1936. From 1st October, 1936, the rate of interest was reduced to 7 per cent. per annum with six-monthly rests and the date of repayment was extended to 1st October, 1946. The Appellant paid that interest regularly at the contract rate. A portion of the principal amounting to 5,60,000 was paid up to 21st of May, 1932. The interest on the balance was also paid regularly up to 8th June, 1940, at the contract rate. The total amount of interest paid from 19th May, 1924, to 8th June, 1940, is Rs. 5,09,495-2-9. On 11th December, 1940, the Appellant filed an application under sec. 38 of the Bengal Money-Lenders Act, 1940, for taking accounts and for declaring the amount due to the Respondent and payable by the Appellant, whether as principal or interest or both. The trial Judge has held: (1) that the Appellant is not liable to pay any amount exceeding twice the principal of the original loan, i.e., Rs. 16,00,000. (2) that the Appellant has already paid Rs. 5,60,000 on account of principal and Rs. 5,09,495-2-9 as interest till June, 1940, making a total of Rs. 10,69,495-2-9. (3) that the liability of the Appellant cannot, therefore, exceed Rs. 5 30,504-13-3. 2. He has, accordingly, declared that the Appellant is liable to pay Rs. 16,00,000. (2) that the Appellant has already paid Rs. 5,60,000 on account of principal and Rs. 5,09,495-2-9 as interest till June, 1940, making a total of Rs. 10,69,495-2-9. (3) that the liability of the Appellant cannot, therefore, exceed Rs. 5 30,504-13-3. 2. He has, accordingly, declared that the Appellant is liable to pay Rs. 2,40,000 as the outstanding principal and interest on that date at the rate of 7 per cent, from the 9th June, 1940, till he has paid the claim or a decree for the same has been obtained against him, subject to the limit of Rs. 5,30,504-13-3. 3. Hence this appeal by the borrower. Sec. 38 (2) of the Bengal Money-Lenders Act. 1940, provides that " in taking accounts under that section the Court shall follow the same procedure as it does in regard to civil suits and so far as may be the provisions of Chapters IV, VI and VII. Chapter IV contains sees. 24 to 27, Chapter VI contains sees. 30 to 33 and Chapter VII contains sees. 34 to 45. 4. The material portion of sec. 30 is in these terms: Notwithstanding anything contained in any law for the time being in force or in any agreement, (1) no borrower shall be liable to pay after the commencement of this Act- (a) any sum in respect of principal and interest which together with any amount already paid or included in any decree in respect of a loan exceeds twice the principal of the original loan. (b) on account of interest, outstanding on the date up to which such liability is computed, a sum greater than the principal outstanding on such date. (c) interest at a rate per annum exceeding in the case of- (i) unsecured loans, then per centum simple, (ii) secured Joans eight per centum simple, whether such loan was advanced or such amount was paid or such decree was passed or such interest secured before or after the commencement of this Act; (2) no borrower, shall after the commencement of this Act, be deemed to have been liable to pay before the date of such commencement in respect of interest paid before such date or included in a decree passed before such date, interest at rates per annum exceeding those specified in sub-clause (c) of clause (1): Sub-cls. (a) and (6) of cl. (1) of sec. (a) and (6) of cl. (1) of sec. 30 do not apply to the facts of this case. The provisions of sub-cl. (c) of cl. (i) of sec. 30 are attracted to the facts of this case as the borrower contracted to pay interest at a rate per annum exceeding 8 per cent. simple up to 30th September, 1936. He has paid interest at the contractual rate regularly up to that date. Under sec. 30 (2) he was not liable to pay interest at rates per annum exceeding 8 per cent, simple. The question therefore is whether in taking accounts the amount of interest paid in excess of the statutory rate, i.e., 8 per cent. up to 30th September, 1936, ought to be credited towards the outstanding principal on that date or towards interest accruing after that date. 5. The contention of Mr. Gupta on behalf of the Respondent lender is this: The meaning of sec. 30 (2) is that no borrower is liable after the commencement of the Act to pay before the date of such commencement a sum which exceeds the amount found on calculation at rates mentioned in cl. (c) for the entire period before the commencement of the Act. In order to determine whether there was an excess payment before the commencement of the Act the Court has to find out the sum which has been paid as interest for the whole period from the date of the bond up to the commencement of the Act and to see whether this amount exceeds the amount calculated at 8 per cent. simple for the same period. The amount of interest paid in excess of 8 per cent. up to 30th September, 1936, should, therefore, be credited towards interest accruing from after that date up to the commencement of the Act calculated at the rate of 8 per cent. simple. 6. Sec. 30 (2) releases the borrower from liability to pay interest at rates in excess of the statutory rate. The borrower paid interest at rates exceeding 8 per cent. up to 30th September, 1936. After that date the contractual rate of interest is not in excess of the statutory rate. The interest paid up to 30th September, 1936, is therefore, hit by sec. 30 (2) and not the interest paid after that date. Mr. The borrower paid interest at rates exceeding 8 per cent. up to 30th September, 1936. After that date the contractual rate of interest is not in excess of the statutory rate. The interest paid up to 30th September, 1936, is therefore, hit by sec. 30 (2) and not the interest paid after that date. Mr. Gupta in support of his contention relied upon the decision of this Court in Ramesh Chandra Bhaduri v. Jnanada Prosanna Bhaduri 46 C. W. N. 772 (1941). The facts of that case, however, were not similar to the facts of the present case. Further the question raised in this case was not directly raised or decided in that case. 7. In Re: Carroll's Estate [1901] Ir. R. 78, it was held that where interest on the mortgage was paid in excess of what is due the over-payments will be treated as payments on to count of principal (see also Fisher on Mortgage, 7th Edn. p. 719). It is true that that case interest was paid in excess of the contractual rate but there is no reason why the same principle should not apply when interest is paid in excess of the statutory rate. The attention of McNair, J., was not drawn to the principle laid down in Re: Carroll's Estate [1901] Ir. R. 78 while he decided the case of Kumar Pramatha Nath Roy v. Kanakendra Nath Tagore 46 C. W. N. 873 (1942). We are, therefore, of opinion that the interest paid in excess of the statutory rate up to 30th September, 1936, should be credited towards the outstanding principal. There is, however, a stipulation in the mortgage bond that the mortgagor will be entitled to make part-payments towards the principal by instalments of Rs. 10,000 or any multiple of Rs. 5,000. We, therefore, hold that in taking accounts the excess amount of interest which was paid by the borrower up to 30th September, 1936, should be credited towards the principal outstanding on that date subject to the above stipulation in the bond. Taking account on this basis we declare- (a) that Rs. 2,10,000 is payable to-day as principal but not yet due; and (b) that Rs. 55,462-14-6 is payable as interest up to 10th June, 1944, and is due. 8. The result, therefore, is that the appeal is allowed and the decree of the trial Judge is varied in the manner indicated above. 2,10,000 is payable to-day as principal but not yet due; and (b) that Rs. 55,462-14-6 is payable as interest up to 10th June, 1944, and is due. 8. The result, therefore, is that the appeal is allowed and the decree of the trial Judge is varied in the manner indicated above. There will be no order for costs in this appeal. 17th May, 1944. The declaration made in this case will not in any way prejudice the right of the Appellant to plead sec. 27 of the Bengal Money-Lenders Act of 1940 in any future litigation.