Lalit Mohan Sharma, J.:— This appeal by the appellants arises out of a suit filed by the plaintiff for a mortgage decree for a sum of Rs. 11,478/- with pendente lite and future interest. The plaintiff Raghunath Prasad and the defendant no. 1 Ram Chandra Prasad are brothers. By a registered partition deed dated 2-4-1950 there was a final partition between them. There were certain transactions between the parties, the details whereof are not necessary to state here in view of the scope of the present appeal at this stage and the arguments. Ultimately, the defendant no. I as the karta of his family executed a mortgage document (Ext. 2) in respect of a house in Sitamarhi town for a sum of Rs. 6500/- on 5.12.1951 A sum of Rs. 4250/- was received by him in cash and there was an adjustment of the balance amount. The plaintiff claimed to be a registered money lender and filed the suit for realisation of dues under Ext. 2. The account mentioned at the bottom of the plaint indicates that besides the principal amount of Rs. 6500/-, interest at the rate of 6 per cent per annum was claimed from the date of execution till the date of the filing of the suit. The other defendants impleaded in the suit were sons and a grand-son of defendant no. 1.

2. The defendants admitted the transaction but pleaded payment of a sum of Rs. 4700/-. It has further been said that if the accounting is done, nothing would be found due from the defendants. The payments, however, were denied by the plaintiff.

3. The trial court disbelieved the defence story of part payment and decreed the suit for the full amount along with pendente lite interest at the rate of 6 per cent per annum with a direction that the total interest would not exceed the principal amount of Rs. 6500/- in any case.

4. The defendants appealed praying for dismissal of the suit and the plaintiff-respondent filed a cross-objection under order 41 rule 22 of the Code of Civil Procedure claiming future interest at the rate of 9 per cent per annum. During the pendency of the appeal, the appellant no. 1 died and those of his heirs who were not already on record were substituted.

5. The appeal was placed for hearing before a Division Bench constituted by Mr. Justice B.D Singh and Mr. Justice B.P Jha. By separate judgments, they have held that defendant no. 1 had paid a total sum of Rs. 4000/- towards the dues, but their plea of payment of addition amount of Rs. 700/- was not correct. Rejecting the argument addressed on behalf of the appellants that a sum of Rs. 4000/- should have been treated as payment towards the principal amount and nor towards the interest. Mr. Justice B.D Singh held that the plaintiff was entitled to apply the said amount towards interest at the rate of 6 per cent per annum. He also directed pendente lite interest to be calculated till the date of the decree of this court. Mr. Justice B.P Jha, on the other hand, held that the amount must be adjusted towards the principal. On the question of future interest, both the Hon'ble Judges held that the plaintiff was entitled to the same at the rate of 6 per cent per annum. They also agreed with the direction of the trial court that the past and pendente lite interest should not exceed the principal amount, but differed on this question with respect to the future interest. Mr. Justice B.P Jha held that the aggregate of the entire interest including the future interest would not exceed the principal amount, but Mr. Justice B.D Singh did not subject the future interest to such a condition. Since the Hon'ble Judges differed on some of the questions, they directed that the case should be placed before. The Hon'ble The Chief Justice for placing it before a third Judge. Accordingly, the appeal was placed before me for further hearing.

6. The proviso to section 98(2) of the Code of Civil procedure states that if the Judges composing a Division Bench differ in opinion on a point of law, they may state the point of law upon which they differ and the appeal shall then be heard upon that point by one or more of the other Judges of the Court. The Sub-section (3) declares that the section shall not be deemed to alter or otherwise affect any provision of the Letters Patent. The relevant portion of clause 28 of the Letters Patent is in the following terms:

“………and if such Division Court is composed of two or more Judges and the Judges are divided in opinion as to the decision to be given on any point, such point shall be decided according to the opinion of the majority of the Judges, if there be a majority, but, if the Judges be equally divided, they shall state the point upon which they differ and the case shall then be heard upon that point by one or more of the other Judges and the point shall be decided according to the opinion of the majority of the Judges who have heard the case including those who first heard it.”

7. It will be observed that the Letters Patent does not confine the point of difference to a question of law and since it is not subject to any limitation mentioned in section 98 of the Code of Civil procedure, it must be held that a difference between the Judges constituting a Division Bench, for the purpose of reference to a third Judge, can be on a question of fact also. However, in the present case, the learned Judges did not jointly formulate the points of difference, after delivering their separate judgments. They have in the order-sheet merely stated that as they differed the case should be placed before the Hon'ble The Chief Justice for placing it before a third Judge.

8. Mr. Yogendra Mishra, appearing for the plaintiff-respondent raised a preliminary objection that since the points were not stated by the Bench, the reference to the third Judge was illegal. I do not see any merit in this argument inasmuch as the points, although not expressly enumerated by a joint order, are apparent from the judgments. It is no where peremptorily prescribed that the difference of opinion has to be formulated by a joint order. Besides, the irregularity in not doing so, if at all, is of formal nature and does not vitiate proceeding including the reference. On examining the observations contained in paragraph 23 of the judgment of the Madras High Court in A.K Gopalan v. District Magistrate, Malabar,(1) Mr. Mishra stated that he withdraw his objection and the reference may be treated as good and be decided on merits.

9. The learned Judges have differed on the following points:—

(i) Whether the payment of Rs. 4000/- made by the defendant to the plaintiff should be treated towards the principal amount or towards the interest; and

(ii) Whether the future interest for the period from the date of the decree till realisation would be along with the past and pendente lite interest, subject to the maximum limit of Rs. 6500/-, that is the principal amount.

10. Both the learned Judges have subjected the past and pendente lite interest to the aforementioned limitation; Mr. Justice B.P Jha on an interpretation of section 11 of the Bihar Money Lenders Act, 1974 and Mr. Justice B.D Singh on the ground that the trial court had given such a direction which has not been challenged before this Court, either by filing a cross objection or an independant appeal. Any way, as there is no difference on this question, the pendente lite interest must be subject to the limitation mentioned in the judgment of the trial court, as affirmed by the Division Bench.

11. On the question whether the part payment should be treated towards principal or interest, the general principle subject to any contract to the contrary, must be held that the payment should first be applied to the interest and after the interest is fully paid off and there be any remainder, the same would go to satisfy the principal specially where simple interest is payable (and not compound). This is consistent with common justice. To apply the part payment to the principal, in the first instance, would be to deprive the creditor of the benefit to which he is entitled under the contract. This rule was recognized in England in the last century in the case of, Parr's Banking Co. v. Yates(2) whch was followed by the Privy Council in M.V Appa Rao v. R.P Appa Rao(3). The point arose before the Supreme Court in Maghraj v. Most. Bayabai(4) where deposits were made by the judgment-debtor under Order 21, Rule 1 of the Code of Civil Procedure towards a mortgage decree and while so doing they had stated that payments were made towards the principal due. There was, however, no evidence on the record that the decree holders were informed that the amounts were deposited towards the principal due nor was there evidence that the mortgagee accepted the amount towards the principal. The Court held that the amount so paid could be appropriated first towards interest and then towards the principal. It was observed that “the normal rule that the amounts deposited in Court should first be applied towards satisfaction of the interest and costs and thereafter towards the principal would apply, “It was further said that is was for the mortgagor to prove an agreement contrary to the normal rule. I am, therefore of the view that in absence of an agreement to the contrary, the sum of Rs. 4000/- paid by the defendant must be first applied towards the interest and the burden to prove such an agreement is on the defendant.

12. The defendants relied upon paragraph 7 of the written statement of the defendant no. 1 before the Division Bench in support of their argument that an agreement regarding application of part payment towards the principal first has been pleaded. It is well settled that pleading does not amount to proof and it was the duty of the defence to have proved the plea. The only evidence on which reliance was placed before the Division Bench appears to be the deposition of the defendant no. 1 (D.W 8). Mr. Bishwanath Agrawal who appears for the appellants did not make any further argument when the case was listed before me. The defendant no. 1 stated that he had paid Rs. 4000/- towards Makfula dues. The question is as to whether the expression ‘Makfula dues’ includes only the principal amount or interest also. The amount which is payable by way of interest is clearly payable under the mortgage document and I do not agree with the defence case that the term should be confined to the principal amount only. If it were not so, the decree for interest would not be recoverable as a mortgage decree. The Allahabad High Court in Faqir Pasi v. Behari Kundigar(5), also took a similar view. I do not find any other evidence in this case which could be held to establish the defence plea. It must, therefore, be held that the sum of Rs. 4000/- must be deemed to have been paid in the first instance towards the interest and if on an accounting it is found that the amounts exceeded the interest due on the date of payment, the balance would be applied against the principal due.

13. The other question, that is, whether future interest along with other interest should be subject to the limitation that they should not in any case exceed the principal amount is dependant on an interpretation of section 7 of the Bihar Money Lenders (Regulation of Transaction) Act, 1939 and section 11 of the Bihar Money Lenders Act, 1974. Section 7 of the 1939 Act said that notwithstanding any law or agreement to the contrary, no Court should in any suit brought by a money lender pass a decree for an amount of interest “for the period preceding the institution of the suit” which together with any amount already realised as interest is greater than the principal. The restriction applies only to the past interest which is apparent from the words mentioned in the preceding sentence. The difficulty, however, arises on account of section 11 of the 1974 Act which is quoted below;

“11. Maximum amount which a money lender may realise from the debtor on account of principal and interest;

(1) Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any agreement, it shall not be lawful for a money lender to realise from a debtor on account of principal and interest, in case of a loan in cash more than double of the amount of the loan advanced by him, or in case of a loan in kind, one and half times the amount of the loan advanced by him.

(2) No Court shall in any suit brought by a money lender before or after the commencement of this Act or in any appeal or proceedings in revision arising out of such suit pass a decree for an amount which together with interest for the period preceding the institution of the suit, including any amount already paid towards principal or interest, either through the court or otherwise, is in case of loan in cash more than double the amount of the loan advanced, or in case of loan in kind, more than one and a half times the amount of the loan advanced or if the loan is based on a document, in case of a loan in money, more than double the amount of the loan mentioned in or evidenced by such document or, in case of a loan in kind more than one and a half times the amount of the loan mentioned in or evidenced by such document (emphasis is mine)”.

14. The sub-section (2) has made it clear that it applies to a suit brought by a money lender either before or after the commencement of the new Act, whether pending in the trial court or in appeal, and it cannot, therefore, be suggested that this sub-section which came into existence during the pendency of the present appeal is inapplicable. But this sub-section refers to the period preceding the institution of the suit only and cannot, therefore, be held to put any restriction on the Court to pass a decree for interest for a period after the institution of the suit. It must, therefore, be held that future interest for the period after the preliminary decree cannot be subject to the limitation mentioned in the sub-section.

15. The only point which remains to be considered is the effect of sub-section (1). It is suggested that since a money lender is not permitted by this sub-section to realise from a debtor on account of principal as well as interest more than double of the cash amount of the loan, a decree cannot be passed in excess of this amount. The term ‘interest’ is not limited to past interest only and it is therefore argued that the future interest also must be subject to the restriction. The difficulty in accepting this contention is that on such an interpretation of sub-section (1), the sub-section (2) shall be rendered entirely unnecessary and mere surplusage. It is fairly established that a statute should be so construed as not to render any provision thereof totally ineffective. It is a sound principle of interpretation that, in the language of the Privy Council in, Ditcher v. Denison(6) one “should not, without necessity or some sound reason impute to the language of a statute tentology or Superfluity and should be rather inclined to suppose every word intended to have some effect or be of some use.” There is a presumption that the legislature has intended to give effect to every part of a section without militating against each other and to reach the desired effect, a harmonious construction has to be adopted. Maxwell has said that it is an elementary rule that construction is to be made of all the parts together, and not of one part only by itself. A survey of the entire section is essential, “even when the words are the plainest; for the true meaning of any passage is that which best harmonious with the subject and with every other passage of the statute. “The sub-section (1) does not with the duty of the Court at all and speaks only of what the money lender himself ought to do. Since the question as to the amount of decree which can be passed in a suit has been dealt with separately in the sub-section (2), the intention of the legislature appears not to the sub-section (1) to the powers of a Court in a suit. The callous treatment the money lenders of this State were giving to the debtors in the past is notorious and this they even without going to Court. The object of the sub-section (1) appears to forbid them from so doing. Naturally, the ‘interest’ referred to in this sub-section could not be put in further divisions as past, pendente lite and future interest, which terms can be understood only with reference to a suit. If a money lender contravenes the provisions of the first sub-section, he may be penalised under section 34 of the Act. He cannot extort interest beyond the limit prescribed by sub-section (1) and escape the consequence by merely avoiding to go to Court. I am, therefore, of the view that the sub-section (1) does not apply to a suit and does not limit the power of a court to pass a decree with respect to interest which is dealt with in section 34 and Order 34 of the Code of Civil Procedure. The Money Lenders Act is dealing with such interest only which may be accruing on the loan under the agreement between the debtor and the creditor or under mercantile usage. Future interest is awarded by Court under section 34, Code of Civil Procedure, and is really in the nature of damages granted on account of the plaintiff being kept out of the money due to him under the decree, and is not, strictly speaking, interest on loan. The award of future interest is purely a matter of statutory power under the Code of Civil Procedure and so is the case of pendente lite interest, and they are not controlled by Section 11(1) of the Money Lenders Act, does not render the sub-section (2) ineffective or meaningless. It follows that the second question also must be decided in favour of the plaintiff. I accordingly agree with the judgment of Mr. Justice B.D Singh on both the questions and I regret to have taken a view different from Mr. Justice B.P Jha for whom I have great respect.

16. In the result, the appeal is allowed in part and the cross-objection is also allowed as indicated in the judgment of Mr. Justice B.D Singh, Mr. Justice B.P Jha did not differ with the direction given by Mr. Justice B.D Singh in paragraph 26 of his judgment that the appellants would not have to pay future interest if they pay the decretal amount within six months. This period of six months will have, in the circumstances, to be computed from today, parties will bear their own costs throughout.