The central legal point established in the judgment is that the provisions of Section 30 of the Bengal Moneylenders' Act, 1940 prevailed in the case, and the petitioner bank was not entitled to recover further sums from the opposite parties.

ORDER

1. Civil Revision No. 818 of 1941. The opposite parties jointly borrowed a sum of Rs. 150 from the K. L. Bank Ltd. (formerly known as the Khulna Loan Co. Ltd.) on 3rd January 1920, on a promissory note with a promise to pay on demand to the said Bank the sum borrowed with interest at the rate of Re. 1-6-0 per cent, per annum. The opposite parties paid Rs. 415-11-0 as interest on the said loan. The last payment of interest was made on 11th March 1938. In the year 1940 the Bank instituted a suit against the opposite parties for recovery of Rs. 150 as principal sum of the loan together with RS. 99-13-0 as balance of interest due in the small Cause Suit No. 495 of 1940 of the second Court of the Miinsif at Khulna. The defence of the opposite parties in the suit was that they had already paid a sum of Rs. 415-11-0 and so the bank was not entitled to get any decree against them in view of the provisions of Section 30, Bengal Money-lenders' Act, 1940. On 5th April 1941, the Small Cause Court Judge held that as more than double the principal sum had already been realised the plaintiff bank could not realise any other sum from the opposite parties. He accordingly dismissed the suit. By an Order of this Court u/s 153 (a), Companies Act, dated 12th May 1941, the entire undertakings, assets and liabilities of the bank were transferred to the petitioner bank. On 23rd June 1941, the petitioner bank obtained a Rule from this Court u/s 25, Provincial Small Cause Courts Act, upon the opposite parties to show cause why the Order of the Small Cause Court Judge dated 5th April 1941 dismissing the Small Cause suit should not be set aside.

2. The material provisions relating to interest on loans advanced on the basis of promissory notes are contained in Sections 32 and 79, Negotiable Instruments Act, 1881, Section 3, Usurious Loans Act, and Sections 3 to 6, Bengal Moneylenders Act, 1933. All these Acts were passed before the commencement of part 3, Government of India Act, 1935. These provisions, therefore, constitute the existing Indian law relating to promissory notes as defined by Section 311 (2), Constitution Act. The Bengal Money-lenders Act, 1940 (hereinafter referred to as the Bengal Act) was passed by the Bengal Legislature after the commencement of part 3, Government of India Act, 1935. This Act by excluding promissory notes from Exception (e) to the definition of loan has shown a deliberate intention to deal with interest on promissory notes. 'Promissory note' comes within the exclusive field of the Federal Legislature (Entry No. 28 of List l), while 'money-lending and money-lenders' is within the exclusive competence of the Provincial Legislature (Entry No. 27 of List 2). In (1943) 6 F.L.J.F.C. 221,1 it was held by the Federal Court that the Bengal Act must, taken as a whole, be held to fall within the description legislation in respect of money-lending and money-lenders' and is not wholly void as ultra vires of the provincial Legislature.

3. Section 30, Bengal Act, is repugnant to Sections 79 and 80, Negotiable Instruments Act, 1881,Section 29 (2), Bengal Act, is repugnant to Section 82 read with Section 79, Negotiable Instruments Act. Now the question is how this conflict is to be resolved. The contention of the Advocate-General is that this conflict should be resolved by applying Clause 2 of Section 107, Govern, ment of India Act, 1935 and that it should be held that provincial law (Sections 29 (2) and 30, Bengal Act) should prevail. The contention of Dr. Sen Gupta is that this conflict should be resolved not by the application of Section 107 (2), Government of India Act, 1935, but by an extension of the principle of Section 107 by analogy or by the application of the Canadian doctrine of the occupied field as suggested by Sulai-man J. in Subrahmanyan Chettiar's case? In (1943) 6 P.L.J.F.C. 2211 referred to above the Federal Court has observed:

Where the problem can only be one of conflict between the provisions of the local law and