CHHANGANI, J. - (1.) -
(2.) THIS first appeal by the defendant-mortgagor is directed against both a preliminary decree dated 23-7-1962 and a final decree dated 23. 11. 1962 passed in a suit for the realisation of mortgage-money by sale of the mortgaged property. The plaintiff Gulabchand, now dead, and represented by respondents Kanhaiyalal and Ramdas, as also by Smt Kanta Kumari,instituted a suit in the Court of Senior Civil Judge, Jaipur City, on 9-5-1957, praying for a decree for an amount of Rs. 25,799/11/- and its realisation by sale of the mortgaged property. The plaintiff's case was that the defendant appellant mortgaged his property detailed in para 1 of the plaint on 6-5-1952 for an amount of Rs. 24,999/- and executed a mortgage deed and got it registered on 12-6 52. The defendant agreed to pay interest at Rs. 0/12/-per cent per month with six monthly rest. There was also an agreement to pay interest on the amount of interest in case the amount of interest was not paid in time. The mortgage debt was to be repaid in five years and in case of default, the mortgagor was to pay interest at the rate of 1% per month from the date of default. According to the plaintiff, the defendant paid Rs. 3,200/- on account of interest. The plaintiff consequently filed a suit for the realisation of Rs, 24,999/- as principal and Rs. 80,956/11/- as interest, total Rs. 35,955/11/ -. The defendant admitted the execution of the mortgage deed. He however, pleaded that besides Rs. 3,200/- he paid further amount of Rs. 4,850/- upto Chet Suid 9 Samvat year 2914. The defendant also pleaded that the plaintiffs were not entitled to compound interest as the condition relating to compound interest in the mortgage deed was got inserted on account of undue influence. The defendant also denied the liability to pay interest at the increased rate of Rs. 1% per month. The defendant also prayed for payment of decree by instalments. The trial court, on 17. 9. 57, framed the following four issues: (1) If the defendant paid Rs. 4850/- to the plaintiff upto Chaitra Sudi 9th, Smt, 2014 besides Rs. 3200/-? (D ). (2) Whether the instalment decree can be passed in mortgage suit. If so, whether the defendant is entitled to any instalments and what instalments should be fixed? (D) (3) Whether the condition of adding compound interest was written by the defendant in the mortgage under undue influence of the plaintiff, and so the plaintiff is not entitled to get compound interest? (D) (4) To what relief the plaintiff is entitled? The plaintiff Gulabchand died on 12-1-58 and the respondents Nos. 1 & 2 Kanhaiyalal and Ramdas claiming under a will executed by Gulabchand in their favour on 6. 1. 58, applied for being substituted as the legal representatives of the deceased Gulabchand. The defendant contested the valid execution of the will by Gulabchand and also its admissibility in evidence without a probate. The defendant's objection was over ruled and the respondent Nos. 1 & 2 Kanhaiyalal and Ramdas were brought on record in place of Gulabchand deceased. Thereafter, an amended plaint was filed on behalf of the present plaintiff. In the written statement filed after the amended plaint, the defendant raised the following further pleas: - (1) That Gulabchand's daughter Smt. Dhapan Bai and son Gopi Chand were necessary parties and (2) that no decree can be passed in the suit without obtaining a probate. On 19. 7. 61, on the pleadings of the parties, the following two additional issues were framed: - (1) Whether without a probate the decree cannot be passed in the suit? (2) Whether Smt. Dhapan Bai and Gopi Chand are necessary parties? The trial court decided the additional issues against the defendant on 13. 12. 61 and 5. 2. 1962 respectively. Taking up the remaining issues, the trial court rejected the defendant's plea relating to repayment of an amount of Rs. 4,850/- and decided issue No. 1 against the defendant. Issue No. 2 was also decided against the defendant that no instalments could be fixed in a mortgage suit. The defendant's counsel having conceded that there was no evidence to condition of compound interest was written in the mortgage deed under undue influence of the plaintiff, the first part of issue No. 3 was decided against the defendant. The second part of issue No. 3 was decided against the plaintiff and it was held that the plaintiff were not entitled to interest at Re 1% per month after the expiry of five years' period. On these findings, the trial court passed a preliminary decree holding: - That the plaintiffs were entitled to Rs. 24,999/- as principal and Rs. 31,640/2/- as interest at Re 0/12/-% per month after giving due credit for the amount of Rs. 3,200/- and costs. The trial court fixed 23rd of October, 1962 as the date upto which the decretal amount ought to be paid, of course, subject to extension of time, if any, by the court. After the preliminary decree, on 26-10-62 the plaintiff respondent Ramdas submitted an application stating: - (1) that he had half share in the mortgagee right in the suit and was entitled to receive fifty percent of the whole amount payaple to the plaintiffs under the preliminary decree, and (2) that he sold his above fifty percent share, that is half share, to Smt. Kanta Kumari respondent No. 3; and praying for the substitution of Smt Kanta Kumari respondent No. 3 in place of respondent No. 2 and for necessary amendments in the title of the suit and the preliminary decree. The defendant and the plaintiff - respondent Kanhaiyalal expressed no objection on 23. 11. 62 as to the substitution of Smt Kanta Kumari in place of Ramdas. The trial court accordingly passed a final decree on 23. 11. 62 in favour of Kanhaiyalal and Smt. Kanta Kumari. Alleging that the claim of Smt. Kanta Kumari under the decree had been satisfied under some compromise, the defendant presented the present appeal only relating to the share of Kanhaiyalal plaintiff in the decree. At the time of hearing of the appeal, the respondent's counsel raised a preliminary objection as to the competence of the appeal. It was contended, in the first instance, that the defendant could not appeal against apart of the decree but should have appealed against the whole of the decree. Reliance was placed upon Raja Brajasunder Deo (1) and Saiyid Jowad Hussain vs. Gendan Singh (2 ). There can be no quarrel with the principle that an appeal must be preferred against the whole of the decree and not against any item or items in the decree, though for the purposes of valuation the subject matter in dispute in appeal only is valued. This principle has been enunciated in the above cases in different context and the respondent cannot derive any support in support of his preliminary objection from these cases. In the present case, the appeal has been directed against the decree of the trial court as a whole, although the appellant has taken objection only to a specific item. It was next contended that the decree initially passed in favour of Kanhaiyalal and Ramdas was joint and indivisible and the appellant could not treat such a decree as several decrees in favour of Kanhaiyalal and Ramdas. He having failed to challenge the decree against Kanhaiyalal, the present appeal is not maintainable. We are unable to accept this contention. Without pronouncing any opinion as to the nature of the decree initially passed, we must observe that the development of events in the present case have clearly resulted in separate and several decrees in favour of the respondents. After the preliminary decree, the respondent Ramdas claiming half share in the decree transferred his share in the decree in favour of Smt. Kanta Kumari. The defendant-appellant as also the co-plaintiff Kanhaiyalal raised no objection and eventually, the final decree was passed in favour of Kanhaiyalal and Smt. Kanta Kumari on the basis of allegations It is clear that the parties and the Court treated the interests of Kanhaiyalal and Ramdass separate and divisible and permitted the transfer of the decree by Ram-dass. In favour of Smt. Kanta Kumari and eventually the Court passed a final decree in favour of Kanhaiyalal and Smt. Kanta Kumari, Clearly the plaintiff-respondent is now estopped from taking a stand that the decree was indivisible and to take a preliminary objection as to the competence of the appeal relating to him. The preliminary objection is over ruled. Although in the memorandum of appeal, the defendant-appellant raised a number of grounds in connection with his pleas of repayment and interest but at the time of hearing, he raised only one contention relating to the amount of interest to which plaintiff Kanhaiyalal should be held entitled. The controversy as to the amount of interest was not raised with reference to the pleas taken in the written statement but with reference to events which happened subsequent to the decree of the trial court. It may be mentioned at this stage that after the final decree the Rajasthan Money Lenders Act, 1963 (Act No. I of 1964) hereinafter referred to as the Act) came into force with effect from 1/10/1965. Sec 27 of the Act provides - "notwithstanding anything contained in any agreement or any law for the time being in force, no court shall, in respect of any loan, whether advanced before or after the date on which this Act comes into force, decree on account of interest a sum greater than the principal of the loan due on the date of the decree. " The appellant's contention is that sec. 27 of the Act is retrospective in effect and can be invoked by him in an appeal against the creditor even though the Act was applicable when the suit was decided by the trial court. It was also contended that the date with reference to which the principle enshrined in sec. 27 of the Act should apply, should be the date of the decree of this Court. The counsel for the respondent repudiating the contention submitted (1) that sec. 27 of the Act cannot have retrospective effect, (2) that even if it could be given retrospective effect, it cannot be applied to a case where the suit was decided before the promulgation of the Act, and (3) that the relevant date with reference to which the principle of sec. 27 of the Act should be applied, should be the date of the trial court. We shall first address to the question whether S. 27 of the Act should be applied with retrospective effect. Now, the general principle recognised in resolving controversies relating to the prospective and retrospective effect of a statutory provision is that in the absence of express words providing for retrospective operation or compelling considerations necessarily implying a retrospective effect a statue impairing contracts and affecting vested rights should be presumed to be prospective in effect. There are no express words either in the Act or in sec. 27 of the Act providing for retrospective effect. There are, however, some important features which deserve to be emphasised. The provision seeks to give legislative recognition to the rule of Damdupat Law which always views with great disfavour the creditors right to recover interest exceeding the principal amount. It also reflects the trend of the various legislatures in India to prevent usury and exorbitant demands of interest.
(3.) PROCEEDING to examine the language of sec. 27 of the Act in this back ground, we must note and emphasise: - (1) That the Act seeks to control the amount of interest not only on loans advanced after the date of the commencement of the Act but also on loans advanced before the commencement of the Act. (2) The provision of the Act further issues a mandate to the courts and that too by using a negative language and prohibits the courts from passing a decree on account of interest for a sum greater than the principal of the loan. (3) Under the provision the date of the decree assumes a good deal of significance as compared with the date of the loan or the date of the institution of the suit. Having regard to all these factors, we are persuaded to take the view that the provision should be applied retrospectively. In this view, we are supported by a Bench decisions of the Bombay High Court reported in Bensilol Ramgopal Bhattad vs. Harischandra Tatya Shambhure (3 ). In that case, the Bench of the Bombay High Court had an occasion to consider a similar controversy with reference to sec. 23 of the Bombay Money Lenders Act which was worded in a similar language. Gajendragadker J. as he was then, referred to the decision in Quiller vs. Mepleson (4) and an earlier decision of that court reported in Shantiniketan Co-operative Housing Society vs. Madhavlal 5) and reached a conclusion that the provision should be given retrospective effect. We may extract the following observations from that judgment: - "in our opinion, these words are so clear and emphatic that it would be difficult to accept the contention that Legislature intended the rule laid down in this section to be prospective. The rule has been deliberately put in a negative form with a view to make it clear that its application is intended to be enforced in all cases falling under this section. The plain effect of this section is that the rule of dam-duppat shall apply in respect of any loan whenever it may have been advanced. Legislature knew that the Act would come into force on a particular date and so it has deliberately stated that the provisions of this section should apply in respect of all loans, whether they were advanced before or after the date on which the Act comes into force. Looking at this section by itself, apart from the other provisions of the Act to which we will presently refer, the conclusion seems to be inescapable that the rule laid down in this Act is intended to be retrospective. " It may be pointed out that sec. 2 (15) of the Act defines the expression "suit to which this Act applies" as meaning any suit or proceeding: - (a) for the recovery of loan made after the date on which this Act comes into force; or (b) for the enforcement of any security taken, or any agreement made after the date on which this Act comes into force in respect of any loan made either before or after the said date; or (c) for the redemption of any security given after the date on which this Act comes into force in respect of any loan made either before or after the said date;" Similarly, the Bombay Act defines the expression in Sec. 2 (17 ). Before the Bombay High Court it was argued, "if S. 23 is construed as being retrospective, the said view would be repugnant to the obvious inference which arises from the definition of the expression "suit to which this Act applies. " "a Similar argument was also adopted in the present case. After a thorough examination on the respective contentions, the learned Judges reached a conclusion - "having given our careful consideration to the question we have come to the conclusion that there is really no repugnancy between S. 23 and S. 2 (17) of the Act". It was further observed that acceptance of a contrary argument would introduce a very material limitation which is not warranted by the words used in the section itself. It was further observed, "incidentally, it may be pointed out that sec. 23 provides that the rule enunciated by it has to come into force 'notwithstanding any law for the time being in force. ' Usually the expression used in such context is 'notwithstanding any "other" law for the time being in force'. Technically speaking it may be possible to urge that the expression 'notwithstanding any law for the time being in force' may cover even the definition contained in sec. 2 (17) of this Act and in that case the argument of repugnancy would not be valid. The reasoning adopted in the case Bansilal vs. Harishchandra (3) is available for rejecting the contention of the respondent based on the basis of sec. 2 (15) of the Act. In Siba Prasad Misra vs. Mt. Nurabati Zamindari any (6) a Full Bench of the Orissa High Court interpreting sec. 10, Orrissa Money-lenders Act, as (Amendment) Act VIII (18) of 1947, also expressed a similar view and held that "sec. 10 is retrospective so as to control decrees to be passed in suits and appeals brought before, but pending at the time of the commencement of the Amending Act" The learned counsel for the respondent referred to Brojendra Kumar Dutta Roy vs. Sushil Chandra Chakravarty (7), Bhagwantrao Anandrao Kottakon-dawar vs. Daraodar Govindrao Chendke (8) and Nanuram vs. Vishwamitra (9) an unreported judgment of this Court in Man Mohan vs. Ramgopal ( S. B. Civil Revision No. 270. of 1969 decided on 99/10/69 in support of his case. In Brojendra Kumar's case (7) the Calcutta High Court was interpreting sec. 4 of the Bengal Money Lenders Act, which though somewhat similar, to sec. 27 of the Act, differs in one important particular. The section provided that the rule mentioned in the section should apply unless the Court is satisfied that the money lender has reasonable grounds for not enforcing his claim earlier. This feature of the section was emphasised by the learned Judges in refusing to give retrospective effect to the section. They observed, "one difficulty of answering this question in the affirmative is that according to the section the Court shall limit the amount unless it is satisfied that the money-lender had reasonable grounds for not enforcing his claim earlier. ' To deal with this proviso therefore, an issue of fact will have to be decided necessitating an investigation into facts. To hold in favour of the appellant would mean that in all cases as regards interest pending in first or second appeal or an appeal to the Judicial Committee, a remand or at least a further investigation would have to be made. It is hardly conceivable that such was ever the intention of the Legislature" Bhagwantrao Anandrao's case (8) is also distinguishable as the relevant provision was similar to the provision of the Bengal Money Lenders Act interpreted in Brojendra Kumar's case (7 ). Both these cases were referred to in the Bombay case Bansilal Ramgopal Bhattad vs. Harischandra Tatya Bhambhure (3) and it was held that no assistance could be derived by the appellant from those cases. We are also of the view that the appellant cannot derive assistance from these two cases and we agree with the view taken by the Bombay High Court. In Nanuram's case (9), a learned single Judge of this Court was interpreting sec. 29 (2) and (3) of the Act. In sub-sec. (2) the expression "suit to which this Act applies' finds specific mention. On account of this feature and the difference in the language of the two provisions, the opinion of the learned single Judge in connection with sec. 29 of the Act cannot be of much use in influencing a decision as to the proper interpretation of section 27 of the Act. In Man Mohan's case (10) the learned single Judge on a combined reading of secs. 33 and 34 of the Act reached a conclusion that "sec. 34 can only be made in respect of a loan advanced after the Act came into force. " We do not see how the observations in this case can be of any assistance to the respondent in interpreting sec. 27 of the Act. In the light of our above discussions, on first principles and the case-law, we must hold that sec. 27 of the Act should be given retrospective effect. ;