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

1. The decision of these four appeals, which are connected with each other and which have arisen out of orders made by the H. C. of Patna in four misacllanous appeals, depends on the interpretation of S. 7, Bihar Money lenders (Regulation of Transpotions Act, 1939, The facts which have led to the appeals are found briefly states in the petn. filed by the present applts. in the 3rd Ct. of Sub Judge, Patna, and may be restated here for convenient referencefather of the petnrs. borrowed Rs. 40,000 from the guru (ancestor) of the decree- holder under mtge. bond, datedof Rs. 40870-7-6 interest and compound interest Upto 4-1-1910, Rs. 32,370-7-6 was paid in cash and for the balance Rs. 8000 interest and Rs. 40,000 principal, i. e., for Rs. 48,000, a Mtge. Suit No. 14 of 1910 was filed in lst Ct. of the Sub-Judge, Patna, and in lieu of "the claim and cost of the said suit two fresh mtge. bonds were executed on 11-7-1910, viz., one for Rs. 40,000 and the other for Rs. 9488, and the latter bond was satisfied by payment of Rs. 15,835 inrespect to the above bond of Rs. 40,000 dated 11-7-1910 the petnrs. paid Rs. 38,530-13-6 Mtge. Suit No. 110 of 1917 was brought in the 3rd Ct. of the Sub Judge, Patna, and a decree for Rs. 58,00-2.0 was passed on 9-7-1929, out of this Rs. 5000 was paid in cash and for the balance of Rs. 53,012-12-0 one mtge. bond dated 6-10-1931 was executed for Rs. 42,000 and on the same date two hand notes were executed. viz., one for Rs. 5000 and one for Rs.Suit No. 14 of 1983 for both the hand notes was brought in 3rd Ct. of the Sub-Judge and a decree for Rs. 15008-2-0 was passed on 28-2-1985. This decree is under execution.When the decree-holder sought to execute the money decree by attachment and sale of the judgment debtors properties stating that they were subject to a mtge. lien of Rs. 62-27-13-0 under the mtge. Bond dated 6-10-1981, the two judgment-debtors, who are brothers, filed objections under Ss. 11 and 16 of the earlier Bihar Money-lenders Act, III [3] of 1938, and S. 47, C. P. 0. The petns. (two by each of them) were filed separately by the brothers. They urged that on a proper calculation under S. 11 no lien was subsisting on the properties owing to payments made towards the mtge. debt amounting to Rs 92,3942-0. The Subordinate Judge held that this plea of the judgment-debtors could not be entertained in the miscellaneous case before him relating to the execution and all that could be done was to notify the mtge. encumbrance without deciding anything as to the correctness of the amount claimed to be due under it: and this conclusion was partly based on the fact that S. 16 of the Act had been declared by the H. C. void. Appeals taken to the H. C. were dismissed. That judgment-debtors thereupon preferred an appeal to the P. C., contending that Ss. 7 and 13 of the new Act (corresponding to Ss. 7 and 11 of the old Act) were applicable and that it was the duty of the Ct. to estimate the value of the property after making the necessary calculations under. S. 7 with reference to the lien. The decision of the P. C: is reported inRamnandan Prasad v. Goshwami Madhwanand,1940 F. O. R. I : (A. I. R. (27) 1940 F. O. 1). The case was remitted back to the H. C., giving liberty to the applts. to file an appln. under S. 13.In answer to a fresh appln. for execution dated 2-7-1942, the two brothers filed the same objections as before. Miscellaneous Cases Nos. 45 and 46 of 1942 related to Ss. 7 and 13, Bihar Money-lenders Act and Misc. Cases. Nos. 50 and 52 of 1942 related to the objections under S. 47, C. P. C. The Subordinate Judge held that the amount of loan should be taken as the amount mentioned in the mtge deed of 1931 and not the amount advanced in 1893 and that a sum of Rs. 70,840 was still due on the bond. He determined the market-value of the several properties given as security, adopting 16 times the net income as the basis.Appeals to the H. C. were numbered as M. A. 108 to 111 of 1943 and they were heard by Manohar Lal and Imam JJ. They modified the order of the lower Ct. in certain respects. Even according to them the amount of the loan was what was mentioned in the mtge bond of 6-10-1931 but as a sum of Rs. 11,855-3-0 had been repaid expressly towards the principal amount after the date of the bond that amount became reduced to Rs. 28,150. Adding an equal sum by way of interest which according to them was the maximum amount, permitted to be allowed under S. 7 of the Act, the total liability was stated to be Rs. 56300 and a charge was declared on the property for this amount. They also directed that the valuation of the property should be fixed at twenty times the net income and not sixteen times. It is from this order that the present appeals have been preferred.

Reasoning:
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.