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Arunagiri Chettiar Vs. Kuppuswami Chettiar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1942Mad655; (1942)2MLJ275
AppellantArunagiri Chettiar
RespondentKuppuswami Chettiar
Excerpt:
- .....to 6% per cent, per annum.2. it is argued in appeal that, granted that there can be no refund of excess payments after re-appropriation in the manner laid down in section 9, there is no provision in section 12 prohibiting the ordering of a refund by the creditor, such as we find in sections 8 and 9; and that under section 7, the general rule is laid down that no sum in excess of the amount as scaled down shall be recoverable from the debtor. it seems to me that it is not sufficient to show that the creditor cannot recover more than the amount as scaled down. the fact is that he has recovered more than the amount of interest as scaled down and the only question is whether the appellant can compel him to pay back the excess or to submit to a re-appropriation towards principal. the two.....
Judgment:

Wadsworth, J.

1. The appellant was the defendant in a suit on a promissory note executed for Rs. 1,400 on 4th June, 1936. The question in appeal arises under sections 9 and 12 of Madras Act IV of 1938. The appellant made payments totalling Rs. 210 before the Act came into force. These payments were more than the amount due for interest as scaled down under Section 9. They were definitely appropriated to interest and there can be no question of any refund. After the Act came into force, the appellant made a payment of Rs. 100 towards interest on 24th September, 1938, and another payment on 12th April, 1939, of which Rs. 320 was appropriated to interest and Rs. 30 to principal. These two payments for interest are very considerably in excess of the amount of interest as scaled down under Section 12 to 6% per cent, per annum.

2. It is argued in appeal that, granted that there can be no refund of excess payments after re-appropriation in the manner laid down in Section 9, there is no provision in Section 12 prohibiting the ordering of a refund by the creditor, such as we find in Sections 8 and 9; and that under Section 7, the general rule is laid down that no sum in excess of the amount as scaled down shall be recoverable from the debtor. It seems to me that it is not sufficient to show that the creditor cannot recover more than the amount as scaled down. The fact is that he has recovered more than the amount of interest as scaled down and the only question is whether the appellant can compel him to pay back the excess or to submit to a re-appropriation towards principal. The two payments in 1938 and 1939 were definitely appropriated towards interest at the time when they were made. Neither the debtor nor the creditor has the right to tear up these appropriations by an unilateral act. The Court has no power to re-appropriate the payments to principal unless the Act contains a provision for such re-appropriation. I am not aware of any such provision in Act IV of 1938. To my mind the only way in which a debtor might get back money which he has paid after the Act came into force in excess of the amount properly due under the provisions of the Act, would be by establishing a right to a refund under the ordinary law on the ground that the payment was made under a mistake. For this purpose there must be a definite plea of set off supported by evidence showing that a mistake was in fact made. No such plea has been taken in this case nor is there any such evidence of the circumstances of the payments.

3. I therefore hold that the excess amount paid towards interest as scaled down cannot be recovered by the powers of Sections 7 and 12 of Act IV. This position is not so unreasonable as it might seem, for there are many cases in which the question whether the debtor or is not an agriculturist is extremely doubtful and if in such cases the defendant voluntarily makes a payment at the contract rate of interest without thinking of availing himself of a possible remedy under Act IV of 1938, there is no apparent reason why he should necessarily be allowed to claim a refund of the excess over the interest as scaled down. The appeal is therefore dismissed with costs.


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