The main legal point established in the judgment is the interpretation and application of the first proviso to sec. 36 (1) of the Bengal Money-Lenders Act, which governs the reopening of transactions represented by promissory notes executed more than 12 years prior to the suit.

JUDGMENT

1. This appeal is by the principal Defendants and it arises out of a suit upon a promissory note. The Plaintiff's case is that Defendant No. 1 and the predecessor-in-interest of the Defendants Nos. 2 and 5 executed a promissory note for the sum of Rs. 4,000 in favour of the pro forma Defendant No. 6, Hemangini Dassi, on the 9th August, 1926. Pro forma Defendant No. 6 by a deed of gift transferred her interest in the note to the Plaintiff. The interest payable on the amount was 9 per cent, per annum. The Defendants made payments towards interest totaling the sum of Rs. 1,735. The Plaintiff accordingly sues for the recovery of the principal with interest less Rs. 1,735.

2. The defence taken is as follows: No sum of money was advanced by Hemangini Dassi to the aforesaid Defendants at the time of the execution of the promissory note. On the 23rd December, 1919, the aforesaid Defendants borrowed the sum of Rs. 2,000 from Triguna Prosad Pal Choudhury, the Plaintiff's husband, and executed a promissory note in his favour for that sum. On the 13th August, 1920, they borrowed the sum of Rs. 1,000 from Srimati Hemangini Dassi, the mother of Triguna Prosad Pal Choudhury and executed a promissory note for Rs. 1,000 in her favour. On the 8th August, 1923, the aforesaid Defendants executed a promissory note this time in favour of Hemangini Dassi for the sum of Rs. 3,370. This was the amount due on the two previous promissory notes. On the 9th August, 1926, the promissory note in suit was executed in favour of Hemangini Dassi for the sum of Rs. 4,000 which represented the amount due for principal and interest on the promissory note for Rs. 3,370 executed on the 8th August, 1923. Hemangini Dassi assigned this promissory note to the present Plaintiff Sm. Mani Bala Dassi. These are the facts stated by the Defendants.

3. On these facts the contention of the Defendants was that in passing a decree on this promissory note the Court was bound to. re-open the transaction which took place on the 9th August, 1926, and ascertain the amounts which were originally advanced in favour of the Defendants or their predecessors. It was contended that in this case the original loan was represented by the sum of Rs. 3,000 which is the total of the sum advanced on promissory notes executed on the 23rd December, 1919, and 23rd August, 1920, respectively. The Defendants argued that they were not liable to pay under the Bengal Money-Lenders Act more than twice the principal advanced, that is, more than Rs. 6,000 less the amount paid by them during this period. They also prayed for installments.

4. The learned Judge relying on the provisions contained in the first proviso to sec. 36 (1) of the Bengal Money-Lenders Act has held that as the promissory note in suit was executed more than 12 years prior to the suit he could not re-open the transaction represented by that note. He has accordingly given the Plaintiff a decree for the amount claimed together with costs and has allowed the Defendant eight installments. Against this decision the Defendants appeal.

5. It was argued before us that the proviso to sec. 36 (1) of the Bengal Money-Lenders Act has no application and that the transaction which took place on the 9th August, 1926, should be re-opened. Secondly, it was contended that the number of installments are too few. We shall first take up the argument regarding the applicability of the above-mentioned first proviso to sec. 36 (1). The proviso runs as follows:

Provided that in the exercise of these powers the Court shall not (i) re-open any adjustment or agreement, purporting to close previous dealings and to create new obligations, which has been entered into at a date more than twelve years prior to the date of the suit by the parties or any person through whom they claim.

6. The learned Advocate appearing for the Appellants contends that the proviso can apply only when the adjustment or agreement creates new obligations and he contends that in the present ca