Thankappan Nair vs Mathew

T.K. Joseph, J.—The legal respresentative of the judgment debtor has preferred this civil miscellaneous appeal from the order dismissing his application u/s 22 (3) of the Kerala Agriculturists Debt Relief Act (XXXI of 1958) for cancellation of the court sale of property in execution of the decree. The ground on which the application was dismissed was that the applicant had failed to deposit the first instalment of the debt due on 14-1-1959. In reaching this conclusion the court below relied on the decision of this Court in Kurien v. Mary Lopez (1959 KLT 917 = 1959 K.L.J. 994). Counsel for the appellant urged that in view of the amendment of section 4 of Act XXXI of 1958 by Act II of 1961, the deposit of the first instalment has become unnecessary. The relevant section may be extracted :

Section 22 (3) before it was amended reads :

Where in respect of any sale of immovable property which has not been confirmed, a petition for setting aside the sale is pending in any Court at the commencement of this Act, the agriculturist judgment-debtor shall be entitled to pay the decree debt in accordance with the provisions of sections 4 and 5, and on the deposit of the first instalment thereof, the sale shall be set aside. Where the judgment-debtor fails to deposit any of the subsequent instalments, the decree-holder shall be entitled to execute the decree and recover the defaulted instalment or instalments in accordance with the provisions of this Act.

As amended it reads as follows:

In respect of any sale of immovable property which has not been confirmed, the agriculturist judgment-debtor shall be entitled to pay the decree debt in accordance with the provisions of sections 4 and 5, and on the deposit of the first instalment thereof, the sale shall be set aside. Where the judgment-debtor fails to deposit any of the subsequent instalments, the decree-holder shall be entitled to execute the decree and recover the defaulted instalment or instalments in accordance with the provisions of this Act.

The amendment made is immaterial for the purposes of this case. It is the effect of the amendment of section 4 which really arises for consideration. Section 4 as it originally stood was as follows:

(1) Subject to the provisions of sub-section (3), 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).

(2) If any debt is repaid in seventeen equal half-yearly instalments together with interest, accrued due on the principal debt outstanding at the commencement of this Act till the date of payment of each instalment at the rate of 5 per cent per annum or the contract rate, whichever is less, the first instalment being payable before the expiry of a period of six months from the date of commencement of this Act and the remaining instalments being payable on or before the date of expiry of a period of six months from the last day on which the previous instalment was due, the whole debt shall be deemed to be discharged.

(3) The provisions of this section shall not apply to mortgages to which section 11 applies except as provided in sub-section (6) of that section.

and as amended it reads :

(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-sections (2) and (3).

(2) If any debt is repaid in seventeen equal half yearly instalments together with interest at the rate specified in sub-section (1) of section 5 on the principal debt outstanding 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 instalments 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.

(3) The first instalment of any debt payable under sub-section (2) shall be paid before the expiry of a period of six months from the date of the commencement of this Act and each of the remaining instalments shall be paid on or before the date of expiry of a period of six months from the last day on which the previous instalment was due.

(4) Notwithstanding anything contained in sub-section (2), except in the case of the last instalment, the amount paid at each instalment shall not be less than five rupees.

(5) Where any instalment of any debt is not paid on the due date the creditor shall be entitled to recover the same as provided in section 10 but the debtor shall not forfeit the benefits conferred by this section :

Provided that if default is made in payment of six consecutive instalments the debtor shall not be entitled to the benefits of the provisions of sub-section (2) and sub-section (3) and the whole debt together with such interest as may have accrued thereon less any amount that have already been paid shall be forthwith payable.

(6) The provisions of this section shall not apply to mortgages to which section 11 applies except as provided in sub-section (6) of that section.

It is argued that notwithstanding the imperative provision in sub-section (3) that the first instalment of any debt payable under sub-section (2) shall be paid before the expiry of a period of six months, the effect of sub-section (5) is that this need not be done and that the decree-holder''s remedy is only to execute and recover the first instalment just like any other instalment. It is unnecessary to consider the correctness of this proposition as this is a case falling u/s 22 (3) which provides for setting aside the sale only on deposit of the first instalment. Although the debtor is enabled to pay the debt as provided in sections 4 and 5, in a case covered by section 22 (3), the latter section contemplates an order setting aside the sale; and this order is to be passed only on deposit of the first instalment which according to section 4 (3) must be paid within six months of commencement of the Act, i.e., 14-1-1959. The argument, if accepted, would mean that all court sales within the scope of section 22 (3) which have not been confirmed will automatically stand set aside by reason of the amendment of section 4. If such were the intention of the Legislature, section 22 (3) also should have been suitably amended. The retention of sections 4(3) and 12 even after amendment is also significant. In my opinion section 22 (3) read with section 4 (3) leads to the conclusion that an order setting aside the sale can be passed only on deposit of the first instalment. That not having been done, the order of the court below does not call for interference.

I may observe that the decision reported in 1960 K.L.J. 1242 = 1960 KLT 1073 cited before me has, in my opinion, no application to a case covered by section 22 (3). Had it been necessary to consider this decision in this case I would have been inclined to refer this case to a Bench as I find it difficult to agree with the same. However, the question does not arise in this case. In the result, the order of the court below is confirmed and the civil miscellaneous appeal is dismissed but, in the circumstances, without costs.