1951 Supreme(SC) 3

SUPREME COURT OF INDIA
 12th January 1951
H.J. KANIA C.J.I., PATANJALI SASTRI AND CHANDRASEKHARA AIYAR, JJ.
Ram Nandan Prasad Narayan Singh and another - Appellants
Versus
Kapildeo Ramjee and others-Respondents.
Civil Appeals Nos. 98, 99, 100 & 101 of 1949.
Advocates appeared
Shri Shambhu Barmeshwar Prasad and Shri Ramanugrah Prasad, Advocates, instructed by Shri Tara Chand Brijmohanlal, Agent for Appellants; Shri R.J Umrigar, Advocate. instructed by Shri R. C. Prasad, Agent for Respondents.

Headnote:Bihar Money Lenders (Regulation of Transactions) (Act (VII of 1939), S. 7-Loan based on document-Mortgage and interest due under an earlier loan-Document refers to final document.

       The father of the petitioner borrowed Rs. 40,000 from ancestor of the decree-holder under a mortgage-bond, dated 11-1-1893. Out of Rs. 40,370-7-6 interest and compound interest up to 4-1-]910, Rs. 32,370-7-6 was paid in cash and for the balance Rs. 8,000 interest llnd Rs. 40,000 principal, a mortgage suit was filed. In lieu of the claim and cost of the said suit two fresh mortgage bonds were executed on 11-7-1910, vi;:;. one for Rs. 40,000 and the other for Rs. 9,488, and the latter bond was satisfied.

       With respect to the above bond of Rs.40,000 dated 11-7-1910 the petitioners paid Rs. 38,530-13-6. In 1927, a mortgage suit was brought and a decree for Rs. 58,0]2-2.0 was passed on 9-7-]929. Out of this Rs. 5,000 was paid in cash and for the balance of Rs. 53,0]2-10•0 one mortgage bond dated 6-10-1931 was executed for Rs. 42,000 and on the same date, two hand-notes were executed, vi;:;., one for Rs. 5,000 and one for Rs. 6,012-2-0. In 1933, a suit for both the hand-notes was brought and a decree for Rs. 15,008•2-0 was passed on 28-2-]935. The decreeholder sought the execution of the decree by attachment and sale of the judgment-debtors properties stating that they were subject to a mortgage lien ofRs. 62,272-13-0 under the mortgage bond dated 6-10-1931. The judgment-debtors filed objections under sections 11 and 16 of the Bihar Money Lenders Act, 1938, and section 47 of the Civil Procedure Code. They urged that on a proper calculation under section 11 no lien was

       1.Vide Jankinath v. State of Bihar, A.I.R. 1953 Pat. 105.

       2. Pharmaceutical Society v. The London and Provincial Supply Association Ltd., (1880) 5 App. Cas. 857 distinguished. subsisting on the properties owing to payments made towards the mortgage debt amounting to Rs. 92,394-2-0. This plea was not entertained by the Subordinate Judge and appeals taken to the High Court were also dismissed. The judgment-debtors thereupon preferred an appeal to the Federal Court contending that sections 7 and 13 of the new Act [Bihar Money Lenders (Regulation of Transactions) Act, 1939] (corresponding to sections 7 and II of the old Act) were applicable and that it was the duty of the court to estimate the value of the property after making the necessary calculations under section 7 with reference to the lien. The case was remitted back to the High Court by the Federal Court,! giving liberty to the appellants to file an application under section 13.

       In answer to a fresh application for execution, the two judgmentdebtors filed the same objections as before. The Subordinate Judge held that the amount of the loan should be taken a~ the amount mentioned in the mortgage deed of 19\H 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. On appeal to the High Court the order of the Subordinate Judge was modified to a certain extent. There was a further appeal to the Supreme Court.

       Held: For the purposes of S. 7 of the Bihar Money Lenders (Regulation of Transactions) Act, 1939, "the amount of loan mentioned in, or evidenced by, such document" is the amount mentioned or evidenced by, the later document and not that mentioned in the original document which was renewed; and the court can pass a decree for an amount of interest for the period preceding the institution of the suit, which together with any amount realised as interest after the date of the later document, is not greater than the amount of loan mentioned in the later document. The maximum amount that can be so decreed is not the amount which together with the interest realised from the date of the original loan does not exceed the originalloan.2 Section II-Res Judicata-Constructive.

       The decree-holder contended that S. II, Bihar Money-Lenders Act, 1938, was declared void and ultra vires and that therefore S. 7 of the new Act which corresponded to S. II was also inapplicable. The judgment debtors pleaded that they were entitled to the benefit of S. 7 of the new Act. The Federal Court held that the judgment-debtors (present appellants) were entitled to claim the benefit of the provisions of the new Act when the executing court 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.

       Held: To say that the appellants 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 Federal Court was not dealing with any question of interpretation at all. It is impossible to see where the doctrine of constructive res judicata comes in, so as to be of help to the appellants.