Ulahannan Mathai vs Variathu Agusthy

Govinda Pillai, J.—The facts of this case and the questions for decision are given in the order of reference quoted below:

The defendant is the appellant. The suit is for money due under a promissory note. Ex. A, executed by the defendant in favour of the plaintiff for Rs. 748 chukrams 3 cash 8 on 26-2-1118. Exhibit A was admittedly executed for the amount due under a prior promissory note. Ex. B executed by the defendant in favour of the plaintiff on 19-3-1112 for Rs. 525 chukrams 18. In both the promissory notes the provision was for payment of interest at the rate of 12 per cent, per annum. The defendant contended that he was entitled to the benefits of the Travancore Agriculturists'' Relief Act (Act 3 of 1112) and the Travancore Debt Relief Act (Act 2 of 1116) and that he was therefore liable to pay interest only at the rate of 6 per cent, per annum from 23-5-1112 to 31-1-1116 and at 4 per cent, per annum from 1-2-1116 and that the amount covered by Ex. A should not be treated as the principal for the purpose of calculation of interest.

The Court below held that since Ex. A was executed after the date of the commencement of the Debt Relief Act it would not come within the purview of that Act and that the plaintiff was, therefore, entitled to get the whole amount covered by Ex. A with 12 per cent, interest thereon.

The questions for consideration in this appeal are whether the Travancore Debt Relief Act will apply to the debt in question and, if so, what is the principal amount on which interest should be calculated. Explanation III to S. 3 of the Debt Relief Act provides thus:

Where a debt incurred before the 23rd Dhanu 1113 has been renewed, included or merged in a fresh document or degree in favour of the creditor on or after the 23rd Dhanu 1112, such debt shall, notwithstanding anything contained in any law contract, decree or order of Court to the contrary, be deemed to be debt to which this Act applies.

In - ''Subramonia Pillai v. Chaithumahammed Pillay'', 32 T. L. J. 599 (A) a Division Bench of the erstwhile Travancore High Court held that the Debt Relief Act can have no application to a debt payable under a compromise decree passed after the date of the commencement of the Act. This decision was overruled by a Full Bench of the Travancore High Court in - ''Ouseph v. Arya Antharjanam'', 1943 Trav LR 509 (B). That was a case in which a decree was passed after the date of the commencement of the Act in respect of a debt which was incurred before-23-5-1112. The Full Bench held that the scope of the Explanation to S. 3 of the Act is not restricted to a renewal, inclusion or merger in a fresh document or decree before the date of the commencement of the Act and that it will cover cases in which the renewal, inclusion or merger takes place even after the date of the commencement of the Act. It was, however, observed by two of the learned Judges who took, part in the decision that if the debtor showed by his conduct that he did not want to take advantage of the provisions of the Act he would not be allowed later on to claim the benefits under the Act. Under S. 12 of the Act no future interest exceeding simple interest calculated at 4 per cent, per annum shall be chargeable from the date of the commencement of the Act on a money debt to which the Act applies. Notwithstanding this provision the debtor in this case agreed after the commencement of the Act to pay 12 per cent, interest. The question for decision is whether S. 12 of the Act will apply to such a case.

2a. This question was not decided in - 1943 Trav LR 509 (B)'' although the observations of two of the learned Judges who took part in the decision would go to show that when a debtor by his conduct indicates that he does not wish to take advantage of the provisions of the Act he cannot subsequently be allowed to claim the benefit under the Act. At the same time the Full Bench held that the Act would apply to a case in which a debt incurred before 23-5-1112 is renewed, included or merged in a fresh document or decree even after the date of the commencement of the Act. In - ''Venkiteswara Iyer v. Mathoo George. AIR 1951 TC 239 (FB) (C) a Full Bench of this Court held that the Explanation to S. 3 of the Act allows the Court to ignore renewals of debts after 23-5-1112 in respect of an agreement entered into between the parties. But in that case the renewals were before the date of the commencement of the Act. The question, being of considerable importance, we think it desirable that there should be an authoritative decision on the point of Full Bench of this Court.

2b. The other question to be decided is what is the principal amount on which interest should be calculated, whether it is the principal amount of the debt as it existed before 23-5-1112 or the principal amount covered by the fresh document executed after the commencement of the Act. This question also does not appear to have come up for consideration in any decided case. We think it desirable that this question also is decided by a Full Bench. We therefore refer the following questions for decision by a Full Bench:

(1) Whether, when a debt incurred before 23-5-1112 and coming within the-purview of the Travancore Debt Relief Act (Act 2 of 1116) is included in a fresh document executed by the debtor in favour of the creditor after the date of the commencement of the Act, the Act will apply to it?

(2) If the Act will apply to the debt, what is the principal amount on which interest should be calculated? Is it the principal amount of the debt as it existed on 23-5-1112 or the principal amount under the renewed document?

2c. Except the provisions in Ss. 12 and 23 of the Debt Reliefs Acts 2 and 3 of 1116 (Travancore), the other directions and rules laid down in those Acts apply only when the debtor desires to discharge his liability either under Ss. 8 and 9 or under S. 16. Those directions and rules could not therefore have any application in regard to debts which could have been discharged in the mode prescribed & which were not sought to be availed of by the debtor. Section. 23 is only amendment of S. 44, Civil P. C. (Travancore) and so the effect of that section does not arise for consideration here. The effect of S. 12 with reference to the present case will be dealt with hereafter.

It is the Explanation to S. 8 that requires to be properly interpreted for purposes of this appeal. It stated that where the debt incurred before 23-5-11126 ''has been'' renewed etc., such debt shall be deemed to be a debt to which this Act applies. The words "has been" indicate an accomplished fact. They do not indicate the renewal, inclusion or merger in a fresh document or decree on a future date, that is a date after the passing of the Act. If that were the intention of the Legislature then appropriate words would have been used. We see the Legislature using words conveying that idea in sub-s. (2) of S. 3 which runs as follows:

Notwithstanding anything contained in sub-s. (1) or Ss. 4, 5 and 6, the provisions of Ss. 18, 19, 20, 21 and 23 shall subject to the provisions of S. 7 apply to all cases of debts whether incurred before, on or after the 23rd Dhanu 1112.

The absence of any such elaborate and exhaustive expression of intention in the Explanation to sub-s. (1) we see in sub-s. (2) is the clear indication that no future renewals etc. were intended to cover those mentioned in the Explanation to sub-s. (1). It is a canon of interpretation that all words, if they be general and not express and precise, are to be restricted to the fitness of the matter. Vide - ''Wandsworth Board of Works v. United Telephone Co., (1844) 13 QBD 904 at p. 920 (D). They are to be construed as particular if the intention be particular, that is they must be understood as used with reference to the subject-matter in the mind of the Legislature and limited to it. Vide - ''Bradlaugh v. Clarke'', (1883 8 A C 354 at p. 372 (E), - ''Cox v. Hakes'', (1890) 15 A C 506 (F) and - ''Viscountess Rhondda''s claim'', (1922) 2 A C 339 (G). Sankarasubba Iyer J. was inclined to adopt this view in - 1943 Trav LR 509 (B), mentioned in the order of reference. But he found it difficult to reconcile this interpretation with S. 10 of the Act. Section 10 had allowed the creditor the liberty to institute the suit for the recovery of his debt in spite of the provisions of Ss. 8 and 9. There was a proviso added that the execution of any decree or order of the Courts shall not'' be in contravention of Ss. 8 and 9. Sections 8 and 9 come into operation only if the debtor seeks to discharge the debts as provided for therein, and pays the first installment before the end of Edavam 1116. If the first installment is not paid, no question of any bar to the execution can arise. If the debtor pays the first installment and desires to discharge the debt as laid down in Ss. 8 and 9, the passing of the decree subsequent to the Act does not also affect the situation. The execution of such a decree is controlled by Ss. 8, 9 and 10. If the debt was ''subsisting on 31-1-1116 and if the debtor elected to discharge the same as provided for in Ss. 8 and 9, then in spite of the decree the provision in S. 11 steps in and directs how the amount is to be calculated "notwithstanding anything contained in S. 31, Civil P. C, 1100, or any other law, contract, decree or order of Court to the contrary." If the debtor1 did not make the election to discharge the debt under Ss. 8 and 9 then none of these considerations would arise, and the decree passed subsequent to the Act could be executed without any hindrance. The solution for the difficulty thus apprehended is in S. 11 provided the debtor seeks to avail of the benefits conferred by the Act.

The decisions reported in - '' 1942 Trav LR 509 (B)'', - ''Mathew v. Philip'', 57 Trav LR 1365 (H) and - '' AIR 1951 Trav-C 239 (FB) (C)'' dealt with cases where the debts were subsisting on 31-1-1116 and the debtors had within the prescribed time paid the first installment and exercised the option granted to them for the relief under Ss. 8 and 9. If the debt had its origin before 23-5-1112, if it was subsisting on 31-1-1116. and if the debtor exercised his option under Ss. 8 and 9, he got the benefits under the Debt Relief Acts. None of the decisions mentioned above had occasion to consider the effect of renewals or decrees after the Act when the debtor had not invoked the aid of Ss. 8 and 9. Thus some observation in - '' 1943 Trav LR 509 (B)'', that the renewals etc. mentioned in the Explanation to section 3 would include also renewals etc., after the Act, was mere ''obiter dictum'' and the same was unnecessary for the decision of that case. Thus where a debtor had not invoked the aid of Ss. 8 and 9 or S. 16 to discharge his debt, the Debt Relief Act will not apply to renewals etc, mentioned in the Explanation to S. 3(1), if they are after the Debt Relief Act came into force. In the present case, though the debt had its origin before 23-5-1112, the debtor had not invoked Ss. 8 and 9 for discharging the same. So none of the provisions in the Debt Relief Act will apply to him & he cannot ask for reduction of any amount. It was argued on his behalf that at any rate he was liable to pay only 4 per cent, interest after 31-1-1116 as provided for in S. 12. If the suit had been filed on the original cause of action, this plea would have been open to him. He had come to terms with his creditor and executed a fresh or renewed promissory note on 26-2-1118 agreeing to pay a certain amount as principal & interest thereon at 12 per cent. He had thereby waived all the light to treat the debt as one originated on 19-3-1112. The Debt Relief Acts do not prohibit any debtor from giving up all or any of the benefits conferred under the Acts. As pointed out in - ''Kolappa Pillai v. sayarimuthu Dhasien'', 1943 Trav LR 409 (I) so far as the debtor is concerned the Act is only permissive and not mandatory. The general rule Is that one'' may at his pleasure renounce the benefit of & stipulation or other right, introduced entirely in his own favour. The exceptions to this rule are also those mentioned in the above decision.

One of these is that one cannot renounce that which has been introduced for the benefit of another. Where the renunciation is opposed to public policy or public morality the renunciation is not given effect to for no man can renounce a right of which his duty to the public and the claims of society forbid the renunciation.

Thus the debtor had given up right he was entitled to claim and entered into a fresh transaction with his creditor three years after the Debt Belief Act had come into force. He cannot, therefore now fall back on S. 12 and claim reduction of the rate of interest.

Thus our answer to the first question referred is that when a debt incurred before 23-5-1112 and coming within the purview of the Travancore Debt Relief Act 2 of 1116 is included in a fresh document executed by the debtor in favour of the creditor after the date of the commencement of the Act, the Act will not apply to the same. In view of our answer to the first question, the second question does not arise for consideration. It has however to be observed that the principal amount on which interest is to be calculated is the sum mentioned in the promissory note of 1118.

The appeal is also posted before us for disposal. As we are holding against the contentions of the defendant appellant, we confirm the decree of the lower Court and dismiss the appeal with costs.