Decided on October 01,1963


Referred Judgements :-


Cited Judgements :-



- (1.)THE question for decision in this appeal is whether an agriculturist debtor who commits default in payment of six consecutive instalments of the debt forfeits the benefits under S. 5 of Act 31 of 1958. THE learned Additional District Judge held that he does; hence this appeal by the judgment-debtor.
(2.)S. 4 provides for payment of debts is instalments. Sub-section (5) is in these terms: "where any instalment of any debt is not paid on the due date the creditor shall be entitled to recover the same as provided in S. 10 but the debtor shall not forfeit the benefits conferred by this section: Provided that if default is made in payment of six consecutive instalments the debtor shall not be entitled to the benefits of the provisions of sub-section (2) and sub-section (3) and the whole debt together with such interest as may have accrued thereon less any amount that have already been paid shall be forthwith payable. "
The result of default in payment of six consecutive instalments is that the debtor loses the benefits of the provisions in sub-sections (2) and (3) of S. 4. Sub-section (2) provides: "if any debt is repaid in seventeen equal half yearly instalments together with interest at the rate specified in sub-section (1) of S. 5 on the principal debt outstanding at the time of each payment, the whole debt shall be deemed to be discharged: Provided that in the case of debts due to a banking company as defined in the Banking Companies Act, 1949, the number of instalments in which the debt shall be repaid shall be twelve where the debt does not exceed one thousand and five hundred rupees and eight where it exceeds one thousand and five hundred rupees. It

According to the decree-holder-respondent, the reference to S. 5 in sub-section (2) indicates that the debtor is to lose the benefits of reduction of interest under S. 5 of the Act. We are unable to accept this argument. Subsection (5) provides for payment of the amount due in instalments and the amount so payable is the debt together with interest at the rate specified in S. S. Had the intention been to deprive the debtor of the benefits of S. S, the proviso to sub-section (5) of S. 4 would have stated so. On the other hand the proviso makes it clear that in case of six consecutive defaults all that the debtor would lose is the right to obtain a complete discharge of his liability by payment in instalments as provided in sub-sections (2) and (3 ). There are other reasons also for coming to this conclusion.

(3.)A debtor is not bound to avail himself of the benefit of payment of the debt in instalments. To accept the appellant's argument would mean that unless a debtor pays the debt in instalments he will not be entitled to the benefits under S. S. Again, S. 7 of the Act provides for amendment of decrees for money on the application of the debtor or the creditor and the court is bound to amend decrees according to the provisions of the Act which includes S, 5. In the case of a decree so amended, the debtor may pay the whole amount due in a lump or in instalments as provided in S. 4. The proviso to sub-section (5) of S. 4 cannot and does not mean that in the case of such a decree the debtor must pay the debt only in instalments or he would lose the benefits of S. S. The debtor's liability is under the amended decree in such a case and such liability is not enlarged by failure to take advantage of the provisions of S. 4 of the Act. We may add that the conclusion we have reached is supported by the decision in Mannanda v. Mathai (1963 KLT. 390) and the order in C. R. P. No. 976 of 1962 (1963 KLT. 1044 ).
It follows that the order under appeal must be set aside. We accordingly allow the appeal, set aside the order and direct the court below to fix the balance sum payable by the judgment-debtor, taking into account the provisions of S. 5 of the Act. In the circumstances of the case we make no order as to costs.


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