Case: Ramnandan Prasad Narayan Singh &amp; Another Vs. Mahanth Kapildeo Ram Jee &amp; Others

7 was the right one. The F. C. was not dealing with any question of interpretation at all. It is impossible to see where the doctrine of constructiveres judicata comes in, so as to be of help to the applts.7. The second question raised on their behalf relates to the true meaning of S. 7, Bihar Money-lenders (Regulation of Transactions) Act, VII [7] of 1939, which is in these terms :"7. Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any agreement, no Court shall, in any suit brought by a money-lender before or after the commencement of this Act in respect of a loan advanced before or after the commencement of this Act or in any appeal or proceedings in revision arising out of such suit, pass a decree for an amount of interest for the period preceding the institution of the suit, which together with any amount already realised as interest through the Court or otherwise, is greater than the amount of loan advanced, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by such document."8. In the present case, the original loan of Rs. 40,000 was advanced as early as 11-1-1893. The applts. contend that for the purposes of calculating the interest to be decreed prior to the date of the suit the loan advanced must be taken to be the original sum and that if an account is taken of all the sums received by the creditor as interest from that date up to the date of the suit, there would be nothing due for interest. On the other hand, the decree-holder urges that having regard to the latter part of the section, the loan must be taken to be the amount mentioned in the mtge. bond dated 6-10-1931, namely Rs. 42,000. Whichever method of calculation is adopted, it must be remembered that it has to be made not for the purposes of passing any decree on the mtge. loan, but for estimating under S. 13 of the Act, the value of the properties to be brought to sale in execution of the money decree against the applts.9. As pointed out by Sir Maurice Gwyer C. J. in Surendra Prasad v. Gajadhar Prasad,1940 F. C. R. 39 : (A I. R. (27) 1940 F. C.10), "Section 7 of the Act of 1937 is no doubt extremely obscure and ill-drawn." The true intention of the framers of the Act is somewhat difficult to gather. But the Patna H. C. has been consistently placing upon the section an interpretation which is opposed to the contention of the applts. in these proceedings.10. The point came up expressly for decision in Singeshwar Singh v. Medni Prasad, A.I.R. (27) 1940 Pat. 65 : (1871. C. 339), where a mtge. bond was executed on 31-8-1922 for a sum of Rs. 2,000 which was the balance of the principal and interest due under a mtge. bond of the 11-10-1912, for Rs. 1391. The judgment-debtors raised the plea that the Ct. should go back to the earlier bond of 1912 and that as a sum of Rs. 1512 had been paid as and by way of interest towards that bond, no decree could be passed against them for more than the principal sum of Rs.1391. The learned Judges rejected this contention and took the amount stated in the document of 1922, namely Rs. 2,000 as the loan and they held that the plts. were entitled to get a decree for interest for a sum not larger than Rs. 2,000 as no payment had been proved to have been made after the execution of the bond. The same view was taken in Lal Singh v. Ramnarain Ram, A. I. R. (29) 1942 Pat. 138 at p. 139 : (197 I. C. 659) and the pltfs. were awarded a decree on the basis that the loan was to be taken as Rs. 2,909-8-0 which was the amount for which the hand-note sued upon was executed and not Rs. 1,000 which was the original amount advanced upon an earlier hand-note of the year 1924. The case reported in Madho Prasad v. Mukutdhari Singh,193 I. C. 661 ; (A. I. R. (28) 1941 Pat. 378) lays down the same position. The F. B. decision in Deo Nandan Prasad v. Ram Prasad, 23 Pat. 618 : (A. I. R. (31) 1944 Pat. 303 F. B.) reiterates the same view, pointing out the distinction between Ss. 7 and 8 of the Act and stating that while under S. 8 we can go to the original loan in spite of a later document, under S. 7 the loan must relate to the document on which the suit is based, that is, the final document and not the original one. In each one of these cases, the question of the true meaning of S. 7 was pointedly considered. This construction no doubt enables a creditor to circumvent the beneficent provisions of the Act by taking a document for the interest due and adding it to the principal amount. Gwyer C. J., points out this difficulty at p. 59 in case Surendra Prasad v. Gajadhar Prasad Sahu Trust Estate,1940 F. C. R. 39: (A. I. R. (27) 1940 F. C. 10). If the interpretation does not carry out the intentions of the framers of the Act by reason of unhappy or ambiguous phrasing, it is for the Legislature to intervene. But so far from doing so, it has acquiesced, during all these years, in the construction, which the Patna H. C. has been placing upon the section from the very next year after the enactment of the statute. Having regard to the great obscurity in the language employed in the relevant provisions and the inaction of the Legislature, it is, in our opinion, legitimate to infer that the view expressed by the Patna H. C. is in accord with the intention of the Legislature.1

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]6. The first point is entirely without substance. When the decree-holder contended that S. 11, Bihar Money-lenders Act, 1938 was declared void and ultra vires and that there fore S. 7 of the new Act which corresponded to S. 11 was also inapplicable, the judgment-debtors pleaded that they were entitled to the benefit of S. 7 of the new Act. The F. C. held in Ramnandan Prasad v. Goshwami Madhwanand, 1940 F. C. R. 1 : (A. I. R. (27)1940 F. C.1 )that the judgment-debtors (present applts.) were entitled to claim the benefit of the provisions of the new Act when the executing Ct. proceeded under S. 13 to determine the value of the properties to be sold. The correct interpretation of S. 7 was not in question between the parties. To say that the applts. were entitled to take advantage of the provisions of S. 7 is entirely different from the contention that the interpretation sought to be put by them on S. 7 was the right one. The F. C. was not dealing with any question of interpretation at all. It is impossible to see where the doctrine of constructiveres judicata comes in, so as to be of help to theF. B. decision in Deo Nandan Prasad v. Ram Prasad, 23 Pat. 618 : (A. I. R. (31) 1944 Pat. 303   F. B.) reiterates the same view, pointing out the distinction between Ss. 7 and 8 of the Act and stating that while under S. 8 we can go to the original loan in spite of a later document, under S. 7 the loan must relate to the document on which the suit is based, that is, the final document and not the original one. In each one of these cases, the question of the true meaning of S. 7 was pointedly considered. This construction no doubt enables a creditor to circumvent the beneficent provisions of the Act by taking a document for the interest due and adding it to the principal amount. Gwyer C. J., points out this difficulty at p. 59 in case Surendra Prasad v. Gajadhar Prasad Sahu Trust Estate,1940 F. C. R. 39: (A. I. R. (27) 1940 F. C. 10). If the interpretation does not carry out the intentions of the framers of the Act by reason of unhappy or ambiguous phrasing, it is for the Legislature to intervene. But so far from doing so, it has acquiesced, during all these years, in the construction, which the Patna H. C. has been placing upon the section from the very next year after the enactment of the statute. Having regard to the great obscurity in the language employed in the relevant provisions and the inaction of the Legislature, it is, in our opinion, legitimate to infer that the view expressed by the Patna H. C. is in accord with the intention of the Legislature.