Gopal Prasad vs Ramprasad Gupta and Others

Agarwala, J.—The opposite party obtained a decree against the petitioner on the basis of a promissory note. In the execution proceedings which followed the decree the petitioner applied u/s 11, Money-lenders Act of 1989 to pay the decretal amount by instalments. The Court below rejected that application on the ground that the provisions of the Act regarding instalments do not apply to a suit on a promissory note

The learned Subordinate Judge purported to follow the decision of this Court in Sagarmal Marwari v. Bhuthu Ram AIR 1941 Pat. 99. That, however, was a case u/s 8 of the Act, but the section of the Act applicable to instalments is Section 11. It is to be observed that the decree in this case had been passed before the enactment of the Money-lenders Act, 1939, with the result that the liability under the promissory note had merged into the decretal debt.

In considering the Madras Agriculturists'' Relief Act (4 of 1938) in AIR 1941 47 (Federal Court) the learned Chief Justice of India observed in similar circumstances as follows:

But these questions do not in my opinion arise in the present case, because the liability on which the Act operated was a liability under a decree of the Court passed before the commencement of the Act. It had ceased to be a debt evidenced by or based on the promissory note, for that had merged in the decree and had become a judgment-debt; nor could the appellant any longer have sued upon the note... and it was upon that liability and upon no other that the Act operated, even though it might be necessary to go into its earlier history for a particular and special purpose. In the present case the judgment-debt was already in existence when the Act was passed, and it is not necessary to consider whether any different principle would be applicable in the case of decrees made after its enactment. It is sufficient to say that here the Act has neither affected nor purported to affect any liability on a promissory note.

These observations are applicable to the facts of the present case, which must, therefore, go back to the learned Subordinate Judge to consider whether this is a case in which ho should exercise his powers u/s 11 of the Act. There will be no order as to costs.