Sen, J.

1. This is an application for relief under the BengalMoney-lenders Act in respect of a mortgage loan taken on 25th September 1926.The loan was for Rs. 3,00,000. There was the usual preliminary decree passed on12th December 1930, and a final decree on 8th December 1931. Thereafter,various adjustments were recorded between the parties. The last adjustment wason 1st March 1938, whereby it was provided that the interest would becalculated at the rate of 61/2 per cent per annum if the amount fixed was paidin terms of certain orders previously passed. The plaintiffs agreed not toproceed in execution for six years from 1st April 1938. I may mention that theinterest payable according to the terms of the mortgage was 91/2 per cent perannum with quarterly rests. The defendants have now applied for relief underthe Bengal Money-lenders Act on the grounds, firstly, that they have paid interestbeyond the limits specified in Section 30 of the Act; secondly, that they areentitled to recover Rs. 5750 paid by them by way of capitalist commission; andthirdly, that they are not bound to pay more than twice the principal of theoriginal loan. They claim that the decree should be reopened and a new decreepassed in accordance with the provisions of the aforesaid Act.

2. Mr. Ghose, on behalf of the plaintiffs, agrees that thedefendants are entitled to relief on the first and third grounds, that hecontends that the defendants are not entitled to get back any sum which theymay have paid by way of capitalist commission. He admits that some amount wasso paid, but he does not admit that it would amount to Rs. 5750. Next, he saysthat although the defendants may get relief under the Bengal Money-lenders Act,it will not be necessary for the Court to re-open the decree and pass a newone. I shall take up for consideration, the second point raised by Mr. Ghose.There can be no doubt that the defendants are entitled to get relief withrespect to the interest which they have paid in excess of the limits set out inSection 30, Bengal Moneylenders Act. They are also entitled to claim that theyshall not be liable to pay more than twice the amount of the principal of theoriginal loan. Now, in order to give them these reliefs, I am of opinion thatthe decree passed in the suit must be re-opened. I am unable to appreciate howthese reliefs can be granted without altering or affecting the decree passed;and if the decree passed has to be altered, then it must first be reopened. Ihave expressed my view on this question in two previous decisions : Suit No.1680 of Mritunjoy Roy v. Netai Chand Dutt Reported in :AIR1942Cal123 and Civil Revision case No. 257 of Anath Nath Sarkar v. RajendraNath Bhattacharjee : AIR1942Cal120 . And I do not propose todeal in greater detail with this point. I hold that the decree must bere-opened. The next point for consideration is whether the defendants areentitled to claim the return of Rs. 5750 or any sum which they may have paid byway of capitalist commission. This claim is based on Section 33, BengalMoneylenders Act, which is in the following terms:

Any agreement between a lender and a borrower or intendingborrower for the payment to the lender of any sum on account of costs, chargesor expenses incidental or relating to the negotiations for, or the granting of,the loan or proposed loan, shall be illegal, and if any sum is paid to a lenderby the borrower or intending borrower as, for or on account of any such costs,charges or expenses, that sum shall be recoverable as a debt due to theborrower or intending borrower, or in the event of the loan being completed,shall, if not so recovered, be set off against the amount actually lent andthat amount shall be deemed to be reduced accordingly.

3. Mr. Ghose argues that retrospective effect to the sectionshould not be given inasmuch as there is nothing in the section which indicatesthat such effect was intended. He points out that there are words in thesection which indicate that only such agreements were contemplated in thesection as were entered into between a borrower and a lender after the Act cameinto force. Mr. Banerji, on the other hand, contends, that there are no wordsin the section which would justify the Court in holding that it applied only tothe agreements entered into after the Act came into force and he suggests thatthe section applies to agreements whether entered into before or after the Actcame into force. In support of this contention he refers me to the case in Westv. Gwynne (1911) 2 ch.D. 1 at pp. 11, 12 and 13. I need hardly state that inconstruing an Act the Court should not give it a retrospective effect unlesssuch an intention is clear from the words of the Act. An agreement between alender and a borrower, pursuant to which a sum is to be paid to the lender onaccount of costs, charges, or expenses incidental to the negotiations for theloan was a perfectly valid agreement before the Act came into force. If theLegislature wished to reopen a prior agreement which has already been performedthen it should have clearly said so. I can see no reason why I should hold thatan agreement already performed which was perfectly valid and legal before theAct came into operation should after the Act be considered as having beenillegal.

4. The words used in the section are "shall beillegal." This indicates that the taint of illegality was to be attachedto agreements entered into or subsisting as an agreement after the Act cameinto force. The words do not indicate that the intention was to convertagreements which have been performed before the Act and which were perfectlyvalid at the time of their being entered into into illegal agreements. Again,the words used are "if any sum is paid to a lender." The section doesnot say if any sum has been paid to a lender. This again shows that thesection was not intended to affect agreements which had been performed prior toits enactment. To interpret the section in the way suggested by Mr. Banerjeewould be to give it retrospective effect but I can discern nothing in thesection which would indicate that such an effect was intended. The case reliedupon by Mr. Banerji, in my opinion, supports my interpretation of the section.The case related to the interpretation of Section 3, Conveyancing and Law ofProperty Act, 1892, and it was held that the section affected all leaseswhether they were executed before or after the Act. The reason given for thisinterpretation was that the Act was intended to interfere with the existingrights and that although the Act was not retrospective, it affected rightsunder existing leases. Where a lease is in existence, certain rights are continuing,and these rights would be affected by an Act like the Conveyancing Act, as theAct was intended to affect existing rights although it was not retrospective.But here we are not concerned with any existing agreement or continuing right.The agreement between the lender and the borrower has long been performed anddischarged, no further rights or liabilities are outstanding which could beaffected by an Act which is not retrospective. In distinguishing between whatis meant by the retrospective operation of an Act, and an interference withexisting rights, Buckley L.J., made the following observations:

To my mind the word "retrospective" isinappropriate, and the question is not whether the section is retrospective.Retrospective operation is one matter. Interference with existing rights isanother. If an Act provides that as at a past date the law shall be taken tohave been that which it was not, that Act I understand to be retrospective.That is not this case. The question here is whether a certain provision as tothe contents of leases is addressed to the case of all leases or only of some,namely, leases executed after the passing of the Act. The question is as to theambit and scope of the Act, and not as to the date as from which the new law,as enacted by the Act, is to be taken to have been the law.

Numerous authorities have been cited to us. I shall nottravel through them. To my mind they have but little bearing upon this case.Suppose that by contract between A and B there is in an event to arise a debtfrom B to A, and suppose that an Act is passed which provides that in respectof such a contract no debt shall arise. As an illustration, take the case of acontract to pay money upon the event of a wager, or the case of an insuranceagainst a risk which an Act subsequently declares to be one in respect of whichthe assured shall not have an insurable interest. In such a case, if the eventhas happened before the Act is passed, so that at the moment when the Act comesinto operation, a debt exists, an investigation whether the transaction isstruck at by the Act involves an investigation whether the Act isretrospective. Such was the point which arose in Moon v. Durden 1848 2 Ex. 22and in Knight v. Lee 1893 1 Q.B. 41. But if at the date of the passing of theAct the event has not happened, then the operation of the Act in forbidding thesubsequent coming into existence of a debt is not a retrospective operation butis an interference with existing rights in that it destroys As right in anevent to become a creditor of B. As matter of principle an Act of Parliament isnot without sufficient reason taken to be retrospective. There is, so to speak,a presumption that it speaks only as to the future, but there is no likepresumption that an Act is not intended to interfere with existing rights. MostActs of Parliament, in fact, do interfere with existing rights. To construethis section I have simply to read it, and, looking at the Act, in which it iscontained, to say what is its fair meaning.

5. Applying the principles underlying that decision, I am ofopinion that the rights between the parties so far as they relate to thepayment by way of capitalist commission cannot be altered by Section 33, BengalMoney-lenders Act, unless it were retrospective and I have already held that itis not. In these circumstances, I hold that the defendants will not beentitled to get back any sum paid by way of capitalist commission or to getcredit for any such sum. The defendants alleged that in order to obtain the consentof the plaintiffs to one of the adjustments, they paid the sum of Rs. 8500 tothe plaintiff on or about 1st February 1934 and they contend that they areentitled to get credit for this amount at the time when accounts are taken. Mr.Ghose on behalf of the plaintiffs says that he does not admit that Rs. 8500 waspaid, but he agrees that if any sum was paid, the defendants would be entitledto get credit for that sum and that the amount payable by the defendants shouldbe reduced by that amount. It will be for the Registrar to ascertain whentaking accounts what sum if any was paid by the mortgagors on or about 1stFebruary 1934.

6. The decree passed will have to be reopened and a newdecree will have to be passed in accordance with the provisions of Section 34,Money-lenders Act. I direct that an account be taken by the Registrar in thelight of the observations made above and in accordance with the provisions ofs. Si, Bengal Money-lenders Act. Interest shall be calculated @ 8% per annumsimple up to the date of this decree. The amount found due by the Registrarshall be payable in four equal annual instalments. The first instalment shallbe paid within one month of the confirmation of the Registrars report. Indefault of payment of any such instalment, the plaintiffs after giving thedefendants one months notice in the form prescribed may apply for a finaldecree in accordance with the provisions of Section 84(1)(a)(ii). I haveconsidered the circumstances of the plaintiffs and the defendants, and I am ofopinion that the defendants should be given four instalments. The defendantsshall pay all costs incurred with respect to both the preliminary and finaldecrees which have been set aside and the costs of this application.

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Juggannath Roy and Ors. vs. Madan Mohan Burman and Ors.(29.07.1941 - CALHC)