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S. Rajammal Vs. Rangaswami Reddiar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1963)1MLJ298
AppellantS. Rajammal
RespondentRangaswami Reddiar
Cases ReferredMuthiah Thevar v. Lakshmanan Pandithar
Excerpt:
- .....he cannot have the transaction re-opened, and the amount paid as interest at the contract rate re-appropriated in a different manner...section 13 is different in scope from sections 8 and 9. the words 'interest due' in the context must necessarily mean interest which is still payable, something to be paid in future, as distinguished from something which has happened in the past, something to be recovered by legal process. but, as i said, in this case the payments had not been appropriated and therefore the principle of the latter full bench will have no application. sri k.s. desikan for the petitioner contends that under the general law of appropriation, as laid down in manamathi munisami mudali v. perumal mudali : (1919)37mlj367 commissioner of income-tax, bihar and orissa v......
Judgment:

Veeraswami, J.

1. The suit promissory note was executed on 21st February,, 1953, for a sum of Rs. 1,000. There were two payments, one of Rs. 25 on 8th February, 1956 and the other of Rs. 527 on 8th May, 1957 both expressed to be towards principal and interest. There was a demand notice dated 15th September, 1959 served on the defendant and the suit was instituted on 7th January, 1960. It is common ground that the defendant is an agriculturist. It is also common ground that the payments were not appropriated before the date of the suit. In these circumstances the trial Court, applying Section 13 of Madras Act IV of 1938, directed that the defendant would be entitled to ' re-appropriation ' of the amounts paid by him with interest calculated at the rate of 51/2 per cent per annum throughout. The suit was decreed on that basis for a sum of Rs. 779-28 nP. with subsequent interest on Rs. 679-55 nP- at 51/2 Per cent Per annum from the date of the suit till payment. This petition is to revise the order of the trial Judge.

2. If payments had been appropriated earlier to the institution of a suit, in a case governed by Section 13, towards interest, Chellammal v. Abdul Gaffoor Sahib (1961) 2 M.L.J. 222 has held that the appropriation cannot be re-opened. The Full Bench there was concerned with a certain sum paid towards interest and admittedly appropriated towards interest. The learned Judges pointed out:

The logical result of the decision in S.M. Taraganar v. Sankarapandia Mudaliar : (1958)2MLJ568 (F.B.) is that a debtor cannot demand re-opening of the transaction and re-calculation of the interest on the basis of the earlier bond. It must necessarily follow that in cases where he has in fact paid the interest at the contract rate and discharged his obligations in respect of interest, he cannot have the transaction re-opened, and the amount paid as interest at the contract rate re-appropriated in a different manner...Section 13 is different in scope from Sections 8 and 9. The words 'interest due' in the context must necessarily mean interest which is still payable, something to be paid in future, as distinguished from something which has happened in the past, something to be recovered by legal process.

But, as I said, in this case the payments had not been appropriated and therefore the principle of the latter Full Bench will have no application. Sri K.S. Desikan for the petitioner contends that under the general law of appropriation, as laid down in Manamathi Munisami Mudali v. Perumal Mudali : (1919)37MLJ367 Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraj of Dharbanga and Gajram Singh v. Kalyan Mal I.L.R. (1935) All. 791 the plaintiff was entitled to appropriate the payment in the plaint towards interest. But a precisely similar contention was raised before and rejected by Govindarajachari, J. in Muthiah Thevar v. Lakshmanan Pandithar : (1948)2MLJ500 . Dealing with the question, the learned Judge observed:

The question however is whether the principle established by this and other cases, which is part of the general law of appropriation, has not been departed from in Section 13 of Madras Act (IV of 1938)....If Mr. Raghunathan's argument is to be accepted the result would be that in a large number of cases where the debtor makes no appropriation at the time when he makes his payment and where he does not take the additional precaution of stating that his payment should be applied towards the interest due on the debt calculated at the rate specified in Section 13 of the Act and not at the contract rate, he will be deprived of the benefit of the relief intended by Section 13, and by a unilateral act the creditor can get round the provisions of Section 13. While the departure from the law of the country is not to be easily inferred it is in my opinion, sufficiently clear from the wording as well as the object of Section 13 that the Legislature clearly intended to protect an agriculturist notwithstanding his own contract, and that it could not have intended to make his right to the benefit contemplated by the Act liable either to be defeated or materially curtailed by an act of the creditor to which the debtor is no consenting party.

With respect, I find myself in entire agreement with these observations of the learned Judge. If appropriations of open payments were allowed to be made in the plaint, it is obvious that they could easily bypass and defeat the object of Section 13, which was to bring home to the debtor, who is an agriculturist, the benefit of. 51/2 per cent interest. This benefit could be denied under the section to the Agriculturist debtor only on the ground that the payments already made by him before the institution of the suit had been expressly or by necessary implication applied and appropriated by the creditor towards interest, for in that case the obligation towards interest, by such appropriation, would stand discharged. Even so, Sri K.S. Desikan relies on the concluding part of the judgment of Govindarajachari, J. in Muthiah Thevar v. Lakshmanan Pandithar : (1948)2MLJ500 where the learned Judge said:

The result is that the decree of the lower Court, dismissing the suit will have to be set aside' and a decree passed in favour of the petitioner on the lines, laid down in Thiruvengadatha v. Sanappan ( : AIR1941Mad799(2) .

The contention is that, unlike cases to which Sections 8 and 9 are applicable, in Section 13, as it is worded, what is to happen to the excess over the amount equal to 51/2 per cent is not indicated, and the agriculturist debtor will not, therefore, be entitled to take credit for such excess amount. But it seems to me that, if I accept this argument, it would practically amount to a denial to the agriculturist debtor the benefit of Section 13. The benefit that is accorded by that section is that the debt, which has come into existence subsequent to the commencement of the Act, should be scaled down in such a fashion as to allow interest on the principal only at 51/2 per cent per annum. If by reason of open payments, the interest that has accrued under the contract rate is liable to be scaled down to the level of the rate specified by Section 13, but nevertheless the excess over that amount cannot go to the credit of the agriculturist debtor, obviously the net; result would be reducing section. 13 to nothing. In my opinion therefore, notwithstanding the difference in language between Sections 8 and 9 on the one hand and Section 13 on the other, the excess-over interest calculated at the rate permitted by Section 13 will be available to the agriculturist debtor for being applied in reducing of the principal. I do not think that Thiruvengadatha v. Sanappan : AIR1941Mad799(2) said anything to the contrary. As I read the judgment of Govindarajachari, J., in Muthiah Thevar v. Lakshmanan Pandithar : (1948)2MLJ500 all that the learned Judge meant by referring to that case was that the amount available on account of open payments should be first applied towards reduction of interest calculated under Section 13.

3. It follows that the decree granted by the trial Judge does not call for interference. The petition is dismissed. No costs.


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