RAO SAHEB KOTLAA SANYASAYYA NAIDU Vs. PENUMAATCHA VISWESWARA KUMARA APPALA SUNDERA RAMARAJU

JUDGEMENT

(1.) This appeals directed against the judgment and order of the subordinate Judge, amaklapuram, in I. A. No. 1004 of 1950 in O. S. No. 8 of 1944 on the file of the said court, allowing the application and declaring that the debt in question had been completely discharged. ( The appellant had taken a mortgage from the respondents on 20-2-1927, of the respondents properties for a consideration of Rs. 35,000.00. A number of payments had apparently been made towards the mortgage debt, but not specifically earmarked by the mortgagors as payments either towards principal or towards interest as such. The suit was brought for a sums of Rs. 26,000.00 after giving credit to the payments according to the wish of the plaintiff. The trial court dismissed the suit on the ground that applying the provisions of the Madras Agriculturists Relief Act (IV of 1938), hereinafter referred to as the Act, no amount is due and payable under the mortgage, and that the entire amount had been paid off. Against this decision, an appeal was taken to the High Court of Judicature, Madras in A.S.213/45, wherein it was help that the principal amount of Rs. 5,000.00 was outstanding, and accordingly, decreed the suit for that amount together with interest at 6 1\4 per center annum form 1-10-1937. subsequently in pursuance of the decree of the High Court, the plaintiff- appellant filed I.A. 561/47. in the court below for passing a final decree. At that stage, I.A. 1004/50 was filed by the 1st defendant in the suit, and his sons, defendants 2 and 3, for scaling down the debt, applying the provisions of the Act, contending that as the Act has been amended by Act X XIII of 1948 and that secs. 8 and 19 thereof which have been amended by the said Amending Act conferred additional benefits on the defendants; and prayed that the benefits of these provisions should be given to them. This I.A.1004/50 was dismissed on the ground that the High Courts A. S. 213/45 operated as roes judicata,and the trial court accordingly, passed the final decree in the matter. Against this order, the defendants, preferred to appeals to the madras High Court, A. S. 172/52 against the judgment and final decree and C. M. A. 208/52 against the judgment and order of the Court refusing the prayer in I. A. .1004/50. Both the appeals were heard together by this Court which held that the judgment in A. S. 213/45 did not operate as res judicata and therefore the matter should be enquired into, and accordingly remanded I. A. 1004/50 to the Court below, to consider the sealing down of the decree, applying the amended Secs. 8 and 19 of the Act. Thereupon, the lower Court allowed the Interlocutory Application in question and held that the entire decree debt as been satisfied and entered up satisfaction of the decree. It was therein held that the three payments evidenced by Exs. P-15, D-1 and D-2 in the case must be regarded as payments to be credited to the principal of the mortgage, as the debtor has not started in writing that such payments shall be in reduction of interest, and consequently, the learned Subordinate Judge invited memos of calculation from either side and declared that the three payments in question exceeded the principal amount of the outstanding debt, and therefore, held that nothing was due and outstanding in respect of that debt. Hence the present appeal. (3) Two points have been urged in this appeal by Mr. Ramachandra Reddy, the learned counsel for the appellant : Firstly, that the three payments evidenced by Exs. P-15, D-1 and D-2 have been appropriated by the decree-holder towards interest due on the mortgage bond, and a decree originally obtained on that footing and that the appropriated payments could not be reopened, taking advantage of Explanation I; secondly, Explanation Ionly related to payments made after the Act came into force i.e., after 22/03/1938, and that in any case it did not apply to payment already appropriated by the creditor. (4) As regards the first point, it is clear from the material available on record that the appellant did not appropriate these payments until he filed the suit in 1944. In other words, no appropriation by him had been made prior to 1/10/1937, and as this is a debt contracted prior to 1/10/1932, section 8 of the Act would have to be applied to it for purposes of scaling down . In View of the fact that the payments had not been appropriated by the appellant towards interest prior to 1/10/1937, section 8 would come into operation and wipe out all the interest on the debt outstanding on 1/10/1937, and thereafter, there could be no question of appropriating the payment towards interest, which did not exist. There is therefore no force in this contention of Mr. Ramachandra Reddy. (5) As regards the second point, in the view I have taken, and on the evidence in the case, it may not be strictly necessary to examine the same at any great length. But as the question has been raised and argued at some length, I shall deal with it. section 8 of the Act is in the following terms: "Debts incurred before the 1/10/1932, shall be scaled down in the manner mentioned hereunder namely: (1) All interest outstanding on the 1/10/1937, in favour of any creditor of an agriculturist, whether the same be payable under law, custom or contract or under a decree of court and whether the debt or other obligation has ripened into a decree or not, shall be deemed to be discharged, and only the principal or such portion thereof as may be outstanding shall be deemed to be discharged, and only the principal or such portion thereof as may be outstanding shall be deemed to be the amount repayable by the agriculturist on that date.

(2.) When an agriculturist has paid to any creditor twice the amount of the principal, whether by way of principal or interest or both, such debt, including the principal, shall be deemed to be wholly discharged.

(3.) Where the sums repaid by way of principal or interest or both fall short of twice the amount of the principal, such amount only as would make up this shortage or the principal amount or such portion of the principal amount as is outstanding whichever is smaller, shall be repayable.