SEVUGAM CHETTIAR ALIAS MANICKAVASAGAM CHETTIAR Vs. RANGANATHA MUDALIAR

JUDGEMENT

(1.) The only question for determination in this Civil Revision Petition is from what date a debt scaled down under Section 8(3) of Madras Act IV of 1938 is to carry interest under Section 12 of the Act. The debt in this case was contracted on 14th September, 1932, and the decree thereon was passed on 21 December, 1936. It was scaled down to Rs. 298-14-11 being the amount by which the sums paid by way of principal, and interest fell short of twice the amount of the principal and there is no dispute before us regarding the amount.

(2.) In applying Section 12 of the Act, the Court below was of opinion that when a debt is scaled down under Sub-section 3 of Section 8 it has to be scaled down up to the commencement of the Act and the reference to 1 October, 1937, in Sub- section (1) has no application to cases falling under Sub-section (3). We consider that this view is erroneous. It is true that Sub-section (3) does not mention the date up to which debts have to be scaled down thereunder, but the latter part of that sub-section which makes repayable the principal amount or such portion of the principal amount as is outstanding, if it happens to be smaller than the amount arrived at by the process indicated in the first part, clearly refers back to the result of applying Sub-section (1) under which all interest payable on the 1 October, 1937, is wiped out. As Sub-section (3) thus involves a comparison between the amount arrived at by applying Sub-section (1) and that arrived at by applying the first part of Sub-section (3), in order to ascertain which is smaller, it is clear that the amount payable under the first part of Sub-section (3) must be ascertained with reference to the same date, as otherwise there will be no proper basis for comparison. Sub- Secs.(2), (3) and (4) are, in our view, in the nature of provisos to Sub-section (1) whose operation is limited and qualified by those provisions. We are, therefore, of opinion, reading Section 8 as a whole, that the date mentioned in Sub-section (1) is the date up to which all debts falling under that section, have to be scaled down. It follows that sums which remain payable, in respect of debts scaled down under that section carry interest from 1 October, 1937, at the rate mentioned in Section 12. The petitioner will thus be entitled to interest on Rs. 298-14-11 from 1 October, 1937, at the decretal rate of 6 per cent, per annum.

(3.) The revision petition is allowed and the order of the lower Court will be modified accordingly. The parties will bear their own costs throughout.