Excessive interest and repeal of interest law: court power, money-lender status, and revived contractual rights

The Court may reopen a loan transaction under the Usurious Loans Act on its own motion where the interest charged appears excessive, even if the defence does not raise the plea. The Money-lenders Act does not apply unless the lender is shown to be carrying on money-lending as a regular business; an isolated lending transaction is insufficient. A reduction-of-interest statute cannot be enforced after its repeal, because the earlier prohibition on recovery no longer continues once the restriction is withdrawn. The decree was adjusted by applying the Court's interest basis, crediting admitted repayment, and apportioning costs accordingly.

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Issues: (i) Whether the Court could reopen the loan transaction under the Usurious Loans Act on its own motion and treat the interest charged as excessive. (ii) Whether the plaintiff was a money-lender so as to attract the Money-lenders Act. (iii) Whether the Reduction of Interest Act could be applied when it had been repealed before judgment.

Issue (i): Whether the Court could reopen the loan transaction under the Usurious Loans Act on its own motion and treat the interest charged as excessive.

Analysis: The transaction was founded on a promissory note and an earlier bond carrying compound interest at 2 per cent. The statutory language empowered the Court to act where it had reason to believe that the interest was excessive, even if the plea had not been raised by defence. The rate charged was treated as excessive within the meaning of the Act, justifying re-examination of the transaction.

Conclusion: The reopening of the transaction was upheld under the Usurious Loans Act.

Issue (ii): Whether the plaintiff was a money-lender so as to attract the Money-lenders Act.

Analysis: The Act applied only where the plaintiff was shown to be a money-lender in the regular course of business. The material did not show that lending was part of a regular business; an isolated lending transaction was insufficient. The burden lay on the party seeking to invoke the Act to establish that the lender answered that description.

Conclusion: The Money-lenders Act was held inapplicable.

Issue (iii): Whether the Reduction of Interest Act could be applied when it had been repealed before judgment.

Analysis: The Act was in force during the suit but had been repealed before the lower court delivered judgment. Since the statute created only a prohibition on recovery within specified limits, once the prohibition was withdrawn the original rights of the parties revived and the courts could not continue to enforce the repealed restriction.

Conclusion: The Reduction of Interest Act could not be applied after repeal.

Final Conclusion: The decree was modified by allowing interest on the basis stated by the Court, giving credit for the admitted repayment, and adjusting costs proportionately.

Ratio Decidendi: Where the statute permits intervention on the Court's own motion, excessive interest may justify reopening the transaction; a lending transaction is not governed by the money-lending law unless the lender is shown to be in the regular course of business; and a repealed interest-reduction statute cannot be enforced after repeal.

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