Skip to content


Life Insurance Corporation of India Vs. B.R. Honnappa and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberEx. First Appeal Nos. 19 and 33 of 1969
Judge
Reported inAIR1973Kant86; AIR1973Mys86; (1972)2MysLJ169
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rule 1
AppellantLife Insurance Corporation of India
RespondentB.R. Honnappa and ors.
Appellant AdvocateM. Chinnaswamy, Adv.
Respondent AdvocateB.S. Puttasiddiah and ;P.R. Srinivasan, Advs.
DispositionAppeal allowed
Excerpt:
.....two different sets of judgment-debtors, and in both the cases the lower court held that the decrees had been satisfied. the contention of the judgment-debtors is that if adjustment is made after allowing counter-interest at the rate prescribed by the decree on all the sums paid by them from time to time, the decrees in both the cases must be held to have been fully satisfied. agreeing with the above contention of the judgment-debtors, the court below has held that the decrees in question are fully satisfied......adjustment is made after allowing counter-interest at the rate prescribed by the decree on all the sums paid by them from time to time, the decrees in both the cases must be held to have been fully satisfied. agreeing with the above contention of the judgment-debtors, the court below has held that the decrees in question are fully satisfied.3. sri m. chinnaswamy, the learned counsel for the appellant, contends that the orders of the court below are erroneous and that if calculation is made by first appropriating the sums paid by the judgment-debtors towards interest and costs payable under the decrees and the balance towards the principal amounts due under the decrees and interest is calculated only on the outstanding principal after each adjustment the judgment-debtors would still be.....
Judgment:

Venkataramiah, J.

1. The Life Insurance Corporation of India is the appellant in both these appeals which are filed against the orders of the Civil Judge, Bangalore. The appellant filed two execution petitions before the lower Court for realising the decretal amounts due under two separate mortgage decrees against two different sets of judgment-debtors, and in both the cases the lower Court held that the decrees had been satisfied. Aggrieved by the orders of the lower Court, the appellant has filed these appeals. Since the question of law raised in both these cases is common, we find it convenient to dispose of these appeals by this common judgment.

2. The question of law involved in these two appeals relates to the mode of appropriation of payments made by the judgment-debtors. The contention of the judgment-debtors is that if adjustment is made after allowing counter-interest at the rate prescribed by the decree on all the sums paid by them from time to time, the decrees in both the cases must be held to have been fully satisfied. Agreeing with the above contention of the judgment-debtors, the Court below has held that the decrees in question are fully satisfied.

3. Sri M. Chinnaswamy, the learned counsel for the appellant, contends that the orders of the Court below are erroneous and that if calculation is made by first appropriating the sums paid by the judgment-debtors towards interest and costs payable under the decrees and the balance towards the principal amounts due under the decrees and interest is calculated only on the outstanding principal after each adjustment the judgment-debtors would still be liable to pay a certain amount in each case. In support of his case, Sri Chinnaswamy relied upon the decision in Meghraj v. Mst. Bayabai, : [1970]1SCR523 and the decision of this Court in Life Insurance Corporation of India v. Manager Patel Nanjunda Setty, E. S. A. No. 81 of 1967 decided on 17-9-1970 (Mys). In Maghrai's case. : [1970]1SCR523 the Supreme Court held that the normal rule in the case of a debt due with interest was that any payment made by the debtor was in the first instance to be applied towards the satisfaction of interest and thereafter towards the principal unless there was an agreement or decretal order to the contrary. While doing so, the Supreme Court approved the view expressed by the Privy Council in Venkatadri Appa Rao v. Parthasarathy Appa Rao. AIR 1922 PC 233. In Life Insurance Corpn. of India's case, E. S. A. No. 81 of 1967. D/- 17-9-1970 (Mys). relied upon by the appellant, Narayana Pai, Chief Justice following the decision of the Supreme Court in Meghraj's case, : [1970]1SCR523 , directed the appropriation of sums paid by the judgment-debtor towards the outstanding interest at the first instance. The same rule has to be followed in these appeals also.

4. We are wear of the longstanding practice in some of the subordinate Civil Courts in this State wherecalculation of the balance of decretalamount is made by following the methodrelied upon by the judgment-debtors.While the said method may not adversely effect the decree-holder when the entire sum claimed by the decree-holdercarried interest, the result would be different when the decretal amount due includes costs and interest which do notcarry interest In the latter case, ifcalculation is made by deducting the entire decretal amount by the sums paidby the judgment-debtor from time totime with counter-interest thereon fromthe date of each payment, it would adversely affect the decree-holder. It is tobe seen that in that case when all thesums paid by the debtor would be carrying counter-interest a certain portionof the decretal amount relating to costsand current interest would not be carrying any interest at all. Hence, in orderto avoid an incorrect result which islikely to ensue the proper method thatshould be adopted is to appropriate thepayments made by the judgment-debtorfirst towards costs and interest payableunder the decree and if any balance remains after such appropriation towardsdischarge of the principal amount. Sincethe lower Court has not followed theabove method of calculation, we are ofthe opinion that the orders passed by theCourt below in both the oases are to beset aside.

5. We, therefore, set aside the orders of the Court below in both these appeals and remand the oases to the Court below for fresh determination of the liability of the judgment-debtors in accordance with the above direction. If on fresh calculation the lower Court finds that the judgment-debtors are still due under the respective decrees it shall proceed to execute the decrees in accordance with law.

6. The appeals are accordingly allowed. No costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //