Ittan Madhavan vs Ouseph Joseph

Krishnamoorthy Iyer, J.—The judgment debtor whose application filed before the execution court under Sections 4 and 5 of Act 31 of 1958, as amended by Act 2 of 1961, was dismissed by the appellate court, is the revision petitioner. The decree in execution was passed on 17.3.1960 subsequent to Act 31 of 1958 but before it was amended by Act 2 of 1961. The decree awarded interest at the contract rate, which is more than 5 per cent per annum, from the date of the transaction till 14-7-1958 the date on which Act 31 of 1958 came into force. After the passing of the Amendment Act 2 of 1961, the judgment debtor filed an application in the execution court under Sections 4 and 5 of Act 31 of 1958 as amended and prayed that interest should be calculated at the rate of 5 per cent only on the principal amount from the date of the transaction. Though this prayer was granted by the learned Munsiff the order was set aside by the learned Additional District Judge of Kottayam in appeal.

The prayer of the revision petitioner was refused by the learned Additional District Judge relying on the decision in Canara Industrial and Banking Syndicate Ltd., v. Sarvothama Kamath1 on the ground that the decree having been passed applying the provisions of Act 31 of 1958, it is not open to the judgment debtor to pray for an amendment of the decree u/s 7 (2) of the Act.

The case before as, has to be decided on an interpretation of Ss 4 and 5 of Act 31 of 1958. The facts in the decision in Canara Industrial and Banking Syndicate Ltd., v. Sarvothama Kamath1 are a decree was passed u/s 10(2) of Act 31 of 1958 before its amendment by Act 2 of 1961, for payment of the decree debt in 17 installments, and the decree-holder a Banking Company filed an application u/s 7(2) of Act 31 of 1958 for amending the decree in accordance with the provisions of the amending Act. Raghavan, J., took the view that when once a decree was passed applying the provisions of Act 31 of 1958, though before it was amended by Act 2 of 1961, in view of the retrospective operation given to the amending Act a party to such a decree has no right to pray for amendment of the decree u/s 7 of the Act. The said decision has no bearing to the facts of the case before us, as in the case before us here is no prayer for amendment of the decree u/s 7 of the Act. The point raised before us has to be resolved in the light of the wording of Sections 4 and 5 of Act 31 of 1958.

Section 4 (1) and (2) and Section 5 (1) (a) of Act 31 of 1958, which are alone relevant for the purpose of the revision petition before us, are extracted below:

Payment of debt in installments. -(1) Subject to the provisions of sub-section (5), notwithstanding anything contained in any law or contract or in any decree or order of court, any debt may be discharged in the manner specified in sub-section (2) and (3)

(2) I f any debt is repaid in seventeen equal half yearly installments together with interest at the rate specified in sub-section (1) of section 5 on the principal debt out-standing 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 installments 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.

5 Interest payable on debts and rents.-

(1) (a) For determining the amount of a debt other than a debt due to a banking company as defined in the Banking Companies Act, 1949, for the purpose of payment under the Act, notwithstanding anything contained in any law, contract or decree or order of court,-

(1) interest shall be calculated at the rate applicable to the debt under the law, custom, contract or decree or order of court under which it arises or at five per cent per annum simple interest, whichever is less, and credit shall be given for all sums paid or credited towards interest and only such amount as is found outstanding, if any, as interest thus calculated shall be deemed payable together with the principal amount or such portion of it as is due; and

(ii) notwithstanding anything in clause (1) not more than one-half of the principal shall be deemed payable or to have been payable towards interest which accrued due till the commencement of this Act.

If the amount paid or credited towards interest exceeds the amount payable under clause (i) or clause (ii) such excess shall be credited towards the principal and the balance, if any, and future interest alone shall be recoverable.

In Narayana Shonoi v. Raya Prabhu 1965 K.L.T 1012 Raman Nayar, J., held.

Section 4 of Act 31 of 1958 (and, as a consequence of sub-section (2) thereof, Section 5) applies notwithstanding any decree or order of court, which expression would include an order made u/s 7 of the Act amending decree by applying the provisions of the Act. Therefore an executing court is bound to apply the provisions of Sections 4 and 5 notwithstanding an order made under Section. 7.

This decision, was followed by a Division Bench of this Court in C.R. P. 894 of 1964. On the same principle the expression ''decree'' in the non-obstinate clause in Section A (1) of Act 31 of 1958 will necessarily take in ''a decree'' even passed after the commencement of Act 31 of 1958 and Sections 4 and 5 have therefore to be applied to a decree though passed after Act 31 of 1958. If the judgment debtor prays before the execution court for the reliefs under Sections 4 and 5 of Act 31 of 1958, that court is bound to apply those provisions and give relief to him notwithstanding that the decree is passed either before or after Act 31 of 1958. It follows that the learned Appellate Judge was not justified in dismissing the application filed by the judgment debtor on the ground that Section 7 of Act 31 of 1958 is a bar to such application. In this view, the order of the learned appellate Judge cannot be sustained. In the result, we set aside the order of the learned Additional District Judge and restore that of the trial court. The Civil Revision Petition is thus allowed in the circumstances of this case, we make no order as to costs in this Court.