Kunjunni Pillai vs Sebastian and Others

Vaidialingam, J.—The short question that arises for consideration in this C.R.P. at the instance of the decree-holder and that has been raised before me by his learned counsel, Mr. P. Subramonian Potti, is as to whether the decree-holder is entitled to collect the entire decree amount when once there has been a default committed by the judgment-debtor in the payment of six consecutive instalments as provided in the proviso to sub-section (5) of section 4 of the Act. Mr. Govindan Nair, learned counsel for the judgment-debtor urged a contention that there is no enquiry or finding by the two subordinate courts as to whether in this case, the decree-holder has as a matter of fact established that his client has committed default in the payment of six consecutive instalments and, therefore, that question will have to be first directed to be investigated by this court. In my view, this contention cannot be accepted because it is seen from the memorandum of grounds that have been filed by the decree-holder before the lower appellate court challenging the order of the learned Munsiff and particularly ground No. 3 that defendants 2 and 3 who are agriculturists have committed default in payment of six consecutive instalments and, therefore, the decree-holder is entitled to collect the whole debt at one and the same time. No doubt, there is a further averment in ground No.4 to the effect that the judgment-debtors have not paid any amount whatsoever.

Why I am adverting to this aspect is that a specific plea has been raised by the decree-holder that the judgment-debtors have committed default in the payment of six consecutive instalments.

That is why the learned appellate Judge, at any rate, has also adverted to this aspect when he refers to the circumstance that the decree-holder-appellant before him is challenging the order of the trial court on the ground that the judgment-debtors have defaulted in the payment of six consecutive instalments and, therefore, the judgment-debtors have forfeited their rights to the benefits under the Act.

Once that position is clear then the other question that arises for consideration is whether petitioner is entitled to realise the entire decree amount that is outstanding in accordance with the provisions of the statute or is he entitled to realise only the instalments the payment of which has been defaulted by the Judgment debtors.

The learned Munsiff who decided the case in the first instance has produced on the basis that the decree-holder cannot be allowed to execute the decree for the full amount. I must frankly say that there is no discussion as such by the learned Munsiff nor is there any indication that he has really considered the specific point that arises for consideration. He has gone only by general probabilities and has ultimately come to the conclusion that the petitioner is not entitled to realise the entire amount.

This order was challenged in appeal by the decree holder before the learned District Judge of Quilon in A.S. No. 3 of 1962. As I mentioned earlier, the learned Judge has adverted to the fact that the case of the decree-holder is that the judgment-debtor has committed default in payment of six consecutive installments and therefore he was claiming a right to realise not only the instalments in respect of which default had been committed but the entire decree amount in accordance with the provisions of Kerala Act XXXI of 1958. 7. The petitioner, no doubt, appears to have placed considerable reliance upon the proviso to sub-section 5 of Section 4 of the Act. But, on the other hand, it is the view of the learned District Judge that the provisions that are applicable are those contained in Section 10 (1) and, therefore, on that basis the learned Judge came to the conclusion that as provided in Section 10 (1) the decree holder is entitled to realise only the amounts covered by the instalments the payment of which has been defaulted and it is the further view of the learned District Judge that Section 10(1) is not controlled by the provision of Sub-section (5) of Section 4 of Act XXXI of 1958. Ultimately, the learned District Judge comes to the conclusion that on the basis of Section 10 (1) of the Act, the decree-holder can execute the decree only in respect of the defaulted instalments and therefore, confirmed the order of the executing court.

Both these orders are under attack at the hands of the decree-holder through his counsel Mr. P. Subramonian Potti. The learned counsel urged that the view of the learned District Judge that the provisions of proviso to sub-section 5 of Section 4 do not control the provisions of Section 10(1) is absolutely erroneous. According to the learned counsel the proviso to sub section 5 of Section 4 and the provisions of Section 10 operate on entirely different fields and there is no question of one controlling the other.

The learned counsel also particularly referred to the fact that sub-section 5 of Section 4 clearly says that when any installment of a debt is not paid on the due date as provided in the earlier part of Section 4 a right is given to the creditor to recover the installment that has been defaulted as provided in Section 10. But subsection (5) does not stop there because it also gives a right to the judgment-debtor by stating when it is evident that the debtor has made default in the payment of any installment of debt, notwithstanding the fact that the creditor can collect the same as provided in Section 10, nevertheless the judgment-debtor shall not forfeit the benefits conferred by this section. It is in this context that the proviso to sub-section (5) of Section 4 and Section 10 (1) will have to be appreciated.

Section 10 deals with various matters, namely, suits against debtors, and the various sub-clauses refer to either the decree for debt having been passed before the commencement of the Act or a suit filed after the commencement of the Act or any suit which was pending at the time of the commencement of the Act and other incidental matters.

But the point to be noted is that section 10 (1) specifically says that in respect of a decree debt passed before the commencement of the Act when the debtor fails to make any one of the payments specified in sub-section (2) and sub-section (3) of Section 4 or in the order on an application made u/s 8, the decree holder shall be entitled to execute the decree in respect of the installment which is in arrear.

Pausing here for a minute, sub-section (2) of Section 4 provides for a debt being repaid in 17 equal instalments together with the interest referred to therein. Again sub-section (3) of Section 4 prescribes the period when the first installment of the debt is to be paid under sub-section (2) and also the period when the successive instalments are to be paid. That is why there is a reference to the manner of payment of instalments as provided in sub-sections 2 and 3 of Section 4.

Therefore, sub-section (5) of Section 4 provides that if any installment as provided in sub-section (2) is not paid on the due date as provided in sub-section (3) a right is given to the creditor to recover the same as provided in Section 10. Section 10 clearly says that if there is a default, as mentioned in that section, a decree-holder can execute the decree in respect of the instalments in arrears. So far a limited right is given to the creditor and as I have already pointed out, a specific right is reserved in the judgment-debtor under sub-section (5) of Section 4 to the effect that notwithstanding a default in the payment of any installment he shall not forfeit the benefits conferred by Section 4. But unfortunately the proviso is a bit stringent and operates against a judgment-debtor in the sense that if the judgment-debtor makes a default in payment to six consecutive instalments he loses the benefit of the provisions of sub-sections (2) and (3) of section 4 of the Act. Not only that, it provides that the entire debt together with interest as may have accrued thereon less any payment already paid shall forthwith be paid.

The discussion made above will clearly show that the proviso to subsections of Section 4 and Section 10(1) operate on entirely different fields. No doubt it has been held by our High Court that notwithstanding the fact that a judgment-debtor may come within the mischief of the proviso to sub-section (5) of Section 4, it is not as if he loses the benefit of any other provisions of the Act but he will retain that benefit to the limited extent, namely, that he would have the benefit of the concession given to him under sub-sections (2) and (3) of Section 4.

Therefore, the approach made by the learned District Judge in considering the question as to whether the provision of the proviso to sub-section (5) of Section 4 is controlled by Section 10 (1) of the Act is in my view completely beside the point and T have already indicated that they operate on different fields. Therefore, if ultimately it is established that there has been default committed by a debtor in payment of six consecutive instalments, however hard the result may be, the result is inescapable, namely, he loses not only the benefit of the provisions of sub-sections (2) and (3) of Section 4, but aright is given to the creditor to realise the entire debt and not the instalments in respect of which default is committed together with interest that may have accrued. No doubt, the entire debt that can be collected will be after giving credit to any amount that may have been paid by the judgment-debtor in this case.

Therefore, it follows that the contentions of the learned counsel for the petitioner that the orders passed by the two courts negativing his right to realise the entire amount outstanding have to be set aside have to be accepted and it follows that the C.R.P. has to be allowed. In the result, the C.R.P. is allowed, but parties will bear their own costs.