Thiruvengadatha Aiyangar vs Sannappan Servai

This Judgment has been overruled by : Gamini Krishnayya and Others Vs. Curza Seshachalam and Others, AIR 1965 SC 639 :

(1965) 1 SCR 195

Wadsworth, J.—This civil revision petition raises the question whether Section 9 of Madras Act IV of 1938 applies to a debt incurred by an

agriculturist after the commencement of the Act in discharge of an anterior debt incurred before the commencement of the Act. The debt in

question is due on a promissory note dated the 2nd October, 1938 which discharged a prior promissory note dated the 1st October, 1935. The

learned District Munsif has applied the proviso to Section 9 Clause (1) and has treated the debt as a renewal of an earlier debt upon which interest

up to the 22nd March, 1938 is to be reduced to five per cent.

Section 9 in terms applies to debts incurred on or after the 1st October, 1932, and it does not say that the section shall not apply to debts

incurred after the commencement of the Act, namely, 22nd March, 1938. But the scaling down machinery under this section has the effect only of

reducing interest up to the date of the commencement of the Act, and from this it may reasonably be inferred that the Legislature did not intend the

section to apply to those debts which had no existence before the last point of time up to which the scaling down under this section could be

effected. A debt scaled down u/s 9 suffers reductions of interest under that section only up to the commencement of the Act, and for future interest

rates the Court has to look to the provisions of Section 12. Section 9 therefore could have no application to a debt incurred for the first time after

the 22nd March, 1938; for Section 9 would not provide for any scaling down at all of such a debt, and Section 12 would have no application, for

it only relates to interest on debts., after the date up to which they have been scaled down under some other provision. On the other hand Section

13 seems to provide a complete machinery for dealing with debts incurred after the commencement of the Act, and it appears to have been

designed as part of a regular scheme whereby debts of agriculturists are divided into three categories; firstly, those incurred before 1st October,

1932, which fall u/s 8; secondly, those incurred from 1st October, 1932 to 22nd March, 1938 which fall u/s 9; and thirdly, those incurred after

22nd March, 1938. The only point in seeking to apply Section 9 to the last class of debts is to get the advantage of the proviso to Section 9(1). It

seems to us that having regard to the scheme of the Act, if it had been the intention of the Legislature to introduce the theory of renewals into the

scaling down operations in respect of debts incurred after the commencement of the Act, some specific provisions would have been made in this

behalf. We are of opinion that all debts incurred after the commencement of the Act, whether they be in discharge of prior debts or not, will fall

only u/s 13.

In the result therefore we allow the revision petition with costs and grant the plaintiff a decree for the principal amount of the suit promissory note

with interest at 61/4 per cent. less the amount of the three payments which will be credited in the first instance to interest at 61/4 per cent. as on the

dates on which they were made. The plaintiff will be entitled to costs in the trial Court.