Judgement

Consolidated Appeals (No. 19 of 1946) from a judgment and three orders of the Federal Court of India (December 12, 1944) which reversed a judgment of the High Court at Calcutta in its revisional jurisdiction (February 24, 1944), which had affirmed judgments and decrees of the Subordinate Judge of Khulna (November 8, 1941) and of the Munsif of Khulna (January 31 and June 12, 1942).

[Two appeals. No. 19 of 1946, and No. 9 of 1946 (post p. 45), were heard together by the Board.]

The following facts and citation of the statutory provisions are taken from the judgment of the Judicial Committee. The question in dispute in this appeal was as to the validity of the Bengal Money Lenders Act, 1940. That Act limited the amount recoverable by a moneylender on his loans for principal and interest and prohibited the payment of sums larger than those permitted by the Act.

The respondent was an incorporated body to which, by an order of May 12, 1941, passed by the High Court of Calcutta under s. 153A of the Indian Companies Act, the assets of the Khulna Loan Bank, Ld. (earlier known as the Khulna Loan Co., Ld.) were transferred. Some of the cases now under appeal to their Lordships Board were brought by the respondent who claimed to recover loans and interest alleged to be due on promissory notes executed by appellant borrowers, and in other instances by appellant debtors claiming a declaration that their indebtedness was at least diminished by the provisions of the Act, and even in some instances that they were entitled to repayment of sums overpaid. The proceedings began in 1941, 1942 and 1943, but were concerned with loans made at a much earlier date not by the respondent, but by the Khulna Loan Co. or the Khulna Loan Bank. In every case the loans were secured by promissory notes executed contemporaneously with the transaction.

The Act, the validity of which their Lordships had to determine, by s. 30 provided that "Notwithstanding anything contained in any law for the time being in force, or in any agreement (1.) No borrower shall be liable to pay after the " commencement of this Act— " more than a limited sum in respect of principal and interest, or more than a certain percentage of the sum advanced by way of interest. Moreover, it was retrospective in its effect, and its limitations could be relied on by a borrower by way of defence to an action by the moneylender, or the borrower could himself institute a suit in respect of a loan to which the provisions of the Act applied. Section 100 of the Government of India Act, 1935, was in the following terms—

"100. (1) Notwithstanding anything in the two next succeeding sub-sections, the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the Federal Legislative List).

"(2.) Notwithstanding anything in the next succeeding sub-section, the Federal Legislature, and, subject to the preceding sub-section, a Provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said schedule (hereinafter called the Concurrent Legislative List).

2 Law Rep. 74 Ind. App. 23 ( 1946- 1947) Prafulla Kumar Mukherjee v. Bank of C ommerce

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"(3.) Subject to the two preceding sub-sections, the Provincial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect to any of the matters enumerated in List II in the said schedule (hereinafter called the Provincial Legislative List).

"(4.) The Federal Legislature has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof.” The Federal Legislative List referred to in that section assigned to the Federal legislature jurisdiction to make laws with respect to

"(28.) Cheques, bills of exchange, promissory notes and other like instruments.