S. Velu Pillai, J.
1. The appellant sued the respondents as representing their tavazhy for redemption of Ext. A.2 puramkadom and Ext. A-4 mortgage; on payment of the amounts due under them in pursuance of Sections 8 and 9-A of the Madras Agriculturists 'Relief Act, 1958, Act 4 of 1938. The two items of (properties belonged to one Kuttialikutty Marakkar under whom the appellant claims. Item I was demisedon kanom which is evidenced by Ext, A-l the kyehit, and on puramkadom Ext. A-2, both on the 21st 'February, 1916, to the tavazhy 'of the respondents. Item 2 was given' on panayam with possession to the tavazhy under Ext. A-3 on the 16th April, 1918. 'Subsequently on the 26th March, 1923, there was a mortgage in respeet of both items 1 and 2, also infavour of the lavazhi. The appellant sought redemption of Exts. A-2 and A-4 only, having conceded in the plaint, that under the Malabar Tenancy ActExts. A-l and A-3 cannot be redeemed. The Munsiff allowed redemption of Ext. A-4, but not of Ext. A-2, 'On payment under Section 9-A, and on appeal the Sub-ordinale Judge disallowed redemption of Ext. A 4 also.
2. In second appeal no point was raised about Ext. a.2, and the correctness of the finding of the Judge with respect to Ext. A 4 alone was convassed. The relevant part of Section 9-A reads as follows :
'This section applies to all mortgages executed at any time before the 30th September, 1947, and byvirtue of which the mortgagee is in possession of the property mortgaged to him or any portion thereof- (a) where no rate of interest is stipulated for as due to the mortgagee.'
This contemplates a case, where the mortgagee is in possession of the property by virtue of, or in pursuance of, the very mortgage to which it if sought to he applied. The respondents cannot be considered to be in possession of the properties by virtue of Ext. A-4, their possession of item 1 being under Ext. A-l and of item 2 being under Ext. A-3. In Ext. A-4 such prior possession was recited, the balance or remainder of the right, ('melavakasom'), of the mortgagor, alone being the subject-matter of the mortgage and there was no stipulation in it for the surrender of possession of the properties on redemption. Thus no possession was even intended to pass under Ext. A-4. it was also provided in Ext. A-4, that interest in paddy was to be reckoned on the mortgage amount of Rs. 300 as due to the respondents' tavazhy, at the rate of 8 parahs of paddy per 100 parahs, the annual interest being 24 parahs of paddy and that this was to be adjusted or set off out of 28 parahs of paddy which was then re-fixed as the purapad payable by them under Ext. A-l and A-2. This was clearly a provision for the payment of the interest due to the mortgagee at a specified rate, and for that reason, the case is distinguishable from Pathukutty Umma v. Muhammad, 1961 Ker LJ 618, where the mortgage document which had provided for appropriation by the mortgagee of the profits of the property subject to certain deductions, one of them being the interest on the mortgage amount, was held not to fall within the scope of Section 9 A. For both these reasons, the Subordinate Judge was right in holding that Section 9-A is not attracted. For the reason that the respondents' possession was not attributable to Ext, A-4, the claim for relief under Section 11 of the Kerala Agriculturists Debt Relief Act, 1938, Act 31 of 1958, is also unsupportable.
3. Learned counsel then pressed, that Section 8 of Act 4 of 1938 may be applied. The relevant part of Section 8 is as follows:--
'Debts incurred before the 1st October, 1932, shall he scaled down in the manner mentioned here-under namely: --
(2) Where an agriculturist has paid to any creditor twice the amount of the principal, whether by way of principal or interest or both, such debt, including the principal, shall be deemed to be wholly discharged.
(3) Where the sums repaid by way of principal or interest or both fall short of twice the amount of the principal, such amount only as would make up this shortage, or the principal amount or such portion of the principal amount as is outstanding, whichever is smaller, shall be repayable.'
The Munsiff did not consider the point, as being unnecessary is the view he took that the appellant was entitled to relief under Section 9.A. The Judge held against the appellant on the ground that the had been no payment of interest within the meaning of Section 8, relying on two cases decided by the Madras High Court, C.S. Jagannatha lyengar v. Sennivessa Chettiar, AIR 1911 Mad 487 and Dr. Manavala Ayyar v. Muhamnad Yoosaf Maracair, AIR 1943 Mad 100, These decisions are bath distinguishable, for they related to usufructuary mortgages in which the realisation of interest on the mortgage money was by appropriation of profits, which was held to be a process different from payment of interest. The provision in Ext. A-4 is different; the liability of the respondents to pay purapad of 28 parahs of paddy annually to the appellant was recognised, and the stipulation was to set off interest at 24 parahs of paddy annually against such purapad. This stipulation implied a notional payment by the respondents of 28 parahs of paddy by way of purapad to the appellant and a notional payment by the appellant of 24 parahs of paddy by way of interest on the mortgage amount to the respondents, every year. The latter would constitute a payment under Section 8. In AIR 1943 Mad 100, Patanjali Sastri, J. distinguished the case before him from a case of adjustment of mutual claims, in these terms:--
'It may be that a payment need not always involve the actual passing of money or money's worth from one hand to another, and may be made by settlement of account or adjustment of mutual claims between the parties. A constructive payment of that kind, however, involves an agreement between the parties which results in the satisfaction of some subsisting claim or demand.' I am therefore of the opinion, that the adjust-meat of annual interest at 24 parahs against annual purapad of 23 parahs of paddy, amounts to payment under Section 8. Learned counsel submitted, that under Sub-section (2) of Section 28 of Act 31 of 1958, the appellant elects to be governed by the provisions of Act 4 of 1933, instead of the corresponding provisions of the later enactment; the appellant has a right to do so.
4. There is a further controversy, whether the respondents having been in default in the past in the payment of even the purapad of 4 parahs of paddy as stipulated in Ext. A-4, it can be held that there was payment of interest to the respondents during the period of the default. The respondents cannot by their default, deprive the appellant of a right to which she is otherwise entitled. The default consisted in the non-payment of the balance of the purapad, viz., 4 parahs of paddy per annum. On the terms of Ext. A-4, this was the only enforceable claim for the appellant against the respondents and she had no right to sue to recover the remainder, viz., 24 parahs. The default of the respondents, so long as it continued, has to be circumscribed to the amount of 4 parahs of paddy payable annually. With respect to the remainder, there was no default on the part of the respondents. I therefore think, that the fact that the respondents had committed default in the regular payment of 4 parahs of paddy by way of purapad, is irrelevant to the application of Section 8.
5. Even on these considerations, other questions might arise under Section 8 which have not been considered by the Courts below in the view theyhave taken. It will be for the Munsiff now to apply Section 8 to the facts of the case and to pass a fresh decree for redemption of Ext. A-4, in the light of the observations made above; the case will go back to him. Both parties have succeeded and failed in their contentions in this Court, and shall bear their costs here and in the lower appellate Court. The appeal is disposed of as above.