1. This appeal is by the first defendant in the; suit O. S. No. 97 of 1959, Sub Court, Vellore, objecting to the preliminary decree passed against him on foot of a mortgage admittedly executed by him. The objection relates only to the) interest payable and is based upon the fact that he is an agriculturist entitled to relief under Madras Act IV of 1938.
2. The two defendants in the suit (the appellant and the second defendant) executed two simple mortgages for Rs. 7900 and Rs. 9000 on 19-2-1953 and 7-4-1953, respectively. On the date of the first mortgage a portion of the hypotheca was leased to the plaintiff mortgagee. The mortgage bonds stipulated that interest should be paid at 12 per cent per annum. There are covenants in the two mortgages authorising the mortgagee to deduct the interest payable as per the terms of the mortgage from the lease amount due from the mortgagee to the mortgagors. These covenants have been fully set out in the judgment of the learned Principal Subordinate Judge and they need not be set out over again in this judgment. The plaintiff's case, is that as per the authorisation in the two mortgages, Exs. A. 1 and A. 2, she has been appropriating the interest upto 13-12-1959, the date of the institution of the-suit. She issued a notice on 21-11-1959, on the eve of her instituting the suit, under Ex. A. 3, in which she states that all interest due and payable by the mortgagors has been appropriated in accordance with the agreement between the parties and that the balance of Rs. 16,900 the principal is due. She demands from the defendants payment of that amount with subsequent interest till the date of payment.
3. The main defence put forward by the defendants was that they were not liable to pay interest beyond the statutory rate fixed by Madras Act IV of 1938 they being agriculturists, that the appropriation made by the plaintiff mortgagee at the rate of 12 per cent adjusting the interest towards the lease amount would not be proper and would not bind them and that the plaintiff mortgagee was not entitled to recover anything more by way of interest than 5 1/2 per cent.
4. The court below held that having regard to the decisions of this court the appropriation made by the creditor was not liable to be reopened and should be left intact. It is this decision of the learned Subordinate Judge which is now challenged before us.
5. So far as this court is concerned, the law is settled by reason of three Full Bench decisions: Mansoor v. Sankarapandia, : AIR1959Mad96 (FB); Chellammal v. Gafoor Sahib, : AIR1962Mad1 (FB) and Muthusami v. Savarimuthu, : AIR1963Mad249 (FB). In : AIR1959Mad96 (FB) it: was held that Under Section 13 of the Madras Agriculturists Relief Act, there is no provision for any automatic discharge of interest stipulated at a rate higher than that prescribed therein; that there being neither a prohibition against a stipulation for payment nor an automatic discharge of higher rates of interest agreed to be paid by an agriculturist, it cannot be said that when a creditor, in regard to a debt contracted after the Act, with the. assent of his debtor added to the principal loan the interest accrued in terms of the contract and the debtor entered into a fresh contract treating the consolidated amount as principal for the fresh loan, there would be anything illegal or even a failure of consideration in regard to the new loan. That was a case where interest in excess of the statutory rate payable by an agriculturist was added to the principal amount of the debt and renewed into a fresh debt. Practically that was a case of an appropriation.
6. In : AIR1962Mad1 the position is made clearer still. In that case which was governed by Section 13 of the Act, the question was whether appropriations made by the creditor should be reopened at the instance of the debtor. Referring to my decision as a single judge in Subbaraya Chettiar v. Vaithianathan Mudaliar, 1961 1 Mad LJ 240, where I have observed that voluntary payments in settlement of accounts by a debtor without availing himself of the statutory benefits, knowingly or unknowingly, cannot ipso facto become illegal in delivering the judgment of the Full Bench Srinivasan J. observed as follows:
'The above passage appears to indicate that the learned judge was of the view that in a case where a debtor had made a voluntary payment of interest on the basis of the contract rate stipulated for, notwithstanding that that rate exceeded the statutory rate, such a payment would not become illegal: the learned Judge clearly appears to have accepted the position that such a voluntary payment by the debtor would not be open to reappropriation'
The ratio of the decision of the Full Bench was that in the case of a debt incurred after the commencement of the Act the debtor was not entitled to reopen a transaction and demand re-appropriation of interest payments voluntarily made by him. It is unnecessary to make a. detailed reference to the subsequent Full Bench decision in : AIR1963Mad249 (FB).
7. Mr. N. R. Raghavachariar contended strenuously that these Full Bench decisions require reconsideration and that the real principle which should govern a case where a debtor pays more than what he is made liable under the law is that which is laid down by the Judicial Committee in Shiba Prasad Singh v. Srish Chandra , where it was held that payment by mistake would provide a cause of action for rectification of the mistake within Section 72 of the Indian Contract Act. This decision has been referred to in the Full Bench case, : AIR1962Mad1 . Learned counsel drew our attention to the following passage in :
'In this case there was not sufficient evidence to show why the lessee and his agents made the overpayments. They may have acted on inadequate information, they may have taken a wrong view of their legal rights or they may have continued paying at the old rates without giving any thought to the matter. But it is clear that there was no intention to make a present to the lessor of money which was not due. The money was paid under the belief that it was legally due. This belief was mistaken. In their Lordships' view that is sufficient to bring the case within Section 72..'
8. There is much to be said in favour of the view that a debtor who has paid more than he is actually liable can always plead a mistake of law, to reopen past payments and to readjust his liabilities in accordance with law. But having regard to the fact that the decisions in this court have taken the view that a voluntary payment by a debtor to a creditor in excess of his statutory liability under the Act cannot be scaled down in cases where they are incurred after Madras Act IV of 1938, we do not think it would be proper at this stage to cast doubts upon these Full Bench decisions and have the matter posted for consideration before a Fuller Bench. The evil of unsettling consistent judicial opinion would be much greater than the evil of laying down what is alleged to be bad law. The Full Bench decisions should, as far as possible, be held to be binding on unless they be so glaringly bad as not being in conformity with any statute or with any decision of a superior court like the Supreme Court. .
9. In spite of the strenuous arguments addressed before us by learned counsel for the appellant we are not convinced that the decisions which are against the appellant require reconsideration.
10. In the result the appeal fails and is dismissed with costs.