1. This appeal is from an order of the District Judge of Alleppey allowing the first defendant in O. S. No. 202 of 1953 to discharge the debt covered by the decree in accordance with the provisions of the Kerala-Agriculturists' Debt Relief Act (31 of 1958). The decree which was for recovery of money due under a simple mortgage was passed on 12-8-1954 on the basis of a compromise petition. The right of the first defendant to obtain relief under Act 31 of 1958 was not disputed and the controversy was about the manner in which the debt was to be scaled down. The learned District Judge accepted the method of computation adopted by the first defendant, and the decree-holder has therefore preferred this appeal. The Division Bench which heard the appeat referred the case to a Full Bench for an authoritative decision.
2. The only point now in dispute is whether the amount adjudged by the decree is to be treated as 'principal' for the purpose of ascertaining the balance of the debt payable under the provisions of the Act or whether the principal should be taken as the original sum lent, notwithstanding the decree. It is necessary to refer to some of the provisions of the Act for determining this question.
'Principal' has been defined in Section 2(h) as follows: '(h) 'Principal' means the amount originally ad-vanced, together with such sum, if any, as has been subsequently advanced, notwithstanding any stipulation to treat any interest as principal and notwithstanding that the debt has been renewed or Included in a fresh document whether by the same debtor or by his heirs, legal representatives or assigns or by any other person acting on his behalf or in his interest and whether in favour ot the same creditor, or his heirs legal representatives or assigns or of any other person acting on his behalf or in his interest.'
Section 4 provides that any debt may be discharged in instalments notwithstanding anything contained in any law, contract or decree or order of court. There is a similar provision in Section 5 regarding Interest and how it should be computed. Section 5 reads:
'5(1)(a) For determining the amount of a debt other than a debt due to a banking company as defined in the Banking Companies Act, 1949, for the purpose of payment under this Act, notwithstanding anything contained in any law, contract or decree or order of court--
(i) Interest shall be calculated at the rate applicable to the debt under the law, custom, contract or decree or order of court under which it arises or at five per cent per annum simple interest, whichever is less, and credit shall be given for all sums paid or credited towards interest and only such amount as is found outstanding, if any, as Interest thus calculated, shall be deemed payable together with the principal amount or such portion of it as is due; and
(ii) notwithstanding anything in Clause (i) not more than one-half of the principal shall be deemed payable or to have been payable towards interest which accrued due till the commencement of this Act,
If the amount paid or credited towards interest exceeds the amount payable under Clause (i) or Clause (ii) such excess shall be credited towards the principal and the balance, if any, and future interest alone shall be recoverable.'
Amendment of decrees is provided for in Section 7, which reads:
'7(1) where, before the commencement of this Act, a court has passed a decree for repayment of a debt, it shall, on the application of any judgment-debtor who is an agriculturist or on the application of the decree-holder apply the provisions of this Act to such decree and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amend the decree accordingly or enter satisfaction as the case may be.
(2) The provisions of Sub-section (i) shall also apply to cases where, after the commencement of this Act, a court has passed a decree for the repayment of any debt.'
3. The point pressed by counsel for the appellant is that the amount adjudged by the decree should be treated as principal for calculating interest under Section 5 and that payments made by the judgment-debtor before decree and appropriated by the decree-holder should not be taken into account. In other words the argument is that the decree should not be reopened for determining the amount payable under the Act. This is sought to be supported by the definition of 'principal.'
It is urged that while renewals of a debt are to be ignored in ascertaining the principal, there is no express provision to ignore a decree into which the debt might have merged before the commencement of the Act. It is true that there is no express provision in respect of decrees similar to renewals but this is unnecessary in view of the first part of the definition that 'principal' means the amount originally advanced, together with such sum, if any, as has been subsequently advanced. The original sum advanced remains the same whether a decree has been passed or not, for its recovery. Section 5(1)(a)(ii) provides that not more than one-half of the principal shall be deemed payable or to have been payable towards interest which accrued due till the commencement of the Act. Here again, the definition of 'Principal' comes into effect, and only one-half of the original sum lent will be deemed payable or to have been payable towards interest. Section 7 enables the court to amend the decree in contormity with the earlier provision. It further provides that in case the principal and interest amounting to one-half of the same has been paid before the commencement of the Act the court should enter satisfaction of the decree. This has to be done notwithstanding anything in the Code of Civil Procedure.
If the argument advanced on behalf of the appellant, that the decree cannot be reopened, is correct, it is impossible to record satisfaction of the decree when the original sum lent and interest not exceeding one-half of the same is paid. It is therefore clear that the principal remains the original sum lent notwithstanding the fact that a decree has been passed for recovery of the same, it follows that the decree can be reopened to ascertain the principal for the purpose of payment under the Act or for recording satisfaction of the decree.
4. Counsel for the appellant relied on the decision in Kochunny Mathu v. Travancore Forward Bank Ltd., 1960 Ker LT 373 in support of his argument. It was not disputed in that case that the principal debt outstanding on the date of commencement of the Act, i.e., 14-7-1958, was the amount decreed, i.e. Rs. 11,585-5-0. In view of this admission, this decision cannot be treated as an authority for the proposition contended for by the appellant. The decision in Chacho v. Subramonia Iyer, 1962 Ker LT 226 is not applicable to this case as the point decided in that case was quite different.
5. In view of the above conclusion the order of the court below does not require any modification. We therefore confirm the same and dismiss the appeal. In the circumstances we make no order as to costs.