Case: Gamini Krishnayya And Others Vs. Curza Seshachalam And Others

otiose. If that was the intention, the words interest outstanding would serve the purpose as well. The word all, therefore, cannot be ignored and must be given a meaning. It indicates that the entire interest, which a debt earned, is scaled down."19. The next decision referred to is that in Mansoor v. Sankarapandia, ILR (1959) Mad 57 : (AIR 1959 Mad 96 ) (FB). That was a decision of the Full Bench of the High Court and the points which arose for consideration and the decision of the Court are correctly summarised in the following head note:"Section 13 of the Madras Agriculturists Relief Act (IV of 1938) deals with debts incurred after the Act. Under that Section there is no provision for any automatic discharge of interest stipulated at a rate higher than that prescribed therein. Such excess interest is only made irrecoverable if the creditor sought to enforce it in a Court of law. There being neither a prohibition against a stipulation for payment for an automatic discharge of higher rates of interest agreed to be paid by an agriculturist debtor, 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 nothing illegal or even a failure of consideration in regard to the new loan. Such a new loan would constitute the debt incurred on the date of renewal and if a suit is based on that debt, the provisions of S.13 could be attracted to that debt alone and not to the earlier debt of which it was a renewal or substitution.The power to go behind a suit debt and to apply the provisions of the Act for the original liability is confined only to cases falling under Sections 8 and 9 of the Act. But even in cases coming under Section 13 it would be open to the defendants to plead and prove that the debt sued on could not form the basis of an action or that there was a failure of consideration in respect of it. Such a defence is not by virtue of anything in or peculiar to the Act, but one under the general law. In cases where a debt was contracted prior to the Act, but renewed after the Act by one or series of successive documents, such renewals including interest at the contract rate; which had been, statutorily discharged by reason of the provisions of Sections 8 and 9 of the Act, there would be a failure of consideration to the extent to which the interest was so discharged. This principle will or can have no application in the case of a debt incurred after the Act and renewed thereafter. In those cases there would be no failure of consideration, for no portion of interest has been discharged by Section 13, it being open to the debtor to agree to pay the higher stipulated rate of interest."That again was a case where the original indebtedness was subsequent to the commencement of the Act and, therefore, stands on a footing different from the one before us. The observations made by the court in the case upon which reliance is placed on behalf of the appellants appear to have been limited by the learned Judges to cases which fall under S. 13 alone. Since, however, the learned Judges seem to have accepted the view taken in Thiruvengadatha Ayyangars case, ILR (1942) Mad 57 : (AIR 1941 Mad 799 (2)) it is necessary for us to say that to that extent we do not concur in the view taken by them. It has to be remembered that where the plaintiff sues upon a document executed after the commencement of the Act the Court has to bear in mind also the provisions of S. 9 inasmuch as the document is one executed after October 1, 1932. If the pleadings show that the original indebtedness commenced before the coming into force of the Act the court will first have to deal with the document with reference to the provisions which precede S. 13 of the Act. It is not as if the Court has to shut its eyes to everything except the fact that the document sued upon was excited subsequent to the commencement of the Act. Therefore, if the court finds that the original indebtedness arose prior to the commencement of the Act either S. 8 or S. 9 will apply and it would not be relevant for it, to consider whether-by executing a renewal after the commencement of the Act the parties agreed to treat the interest accrued up to the date of renewal as principal from the date of the renewal of the debt. That consideration may be relevant in cases which completely exclude the applicability of Ss. 8 and 9.20. We were also referred to the decision in Punvavatamma v. Satyanarayana, ILR (1960) 2 Andh Pra 11 ; Nagabhushanam v. Seetharamaiah, ILR (1961) 1 Andh Pra 485 : (AIR 1961 Andh Pra 224) (FB) and Chellammal v. Abdul Gaffoor Sahib, ILR (1961) Mad 1061 : (AIR 1962 Mad 1 ) ( FB). In the first and the third of these cases the original liability arose after the commencement of the Act but in second one it arose before the commencement of the Act. We agree with the view taken in the latter case that relief can be given to an agriculturist in such a case under S. 8 or S. 9 as the case may be.21. Thus it would appear that wherever a transaction was entered into after the commencement of the Act but the original indebtedness arose before the commencement of the Act, the preponderant view is that Ss. 8 and 9 would not be inapplicable. That, as already stated, is also our view.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In one sense he is right because S. 13 also provides for the staling down of interest due on a debt incurred after the commencement of the Act. But it has to be borne in mind that a debt incurred after the commencement of the Act will not cease to be a debt incurred after October 1, 1932. It is common place that every provision of a statute has to be given full effect and wherever possible the Court should not place that construction upon a provision which would tend to make it redundant or to overlap another provision or to limit its application in disregard of its general applicability unless, of course, that is the only construction which could be reasonably placed upon it. If Mr. Bhimasankarams contention is accepted we will have to limit the application of S. 9 only to such of the debts incurred after October 1, 1932 as were incurred prior to the commencement of the Act. There is nothing in the language of the section which would justify so limiting its provisions. Nor again is there anything in S.13 which would preclude the application of S. 9 to any case whatsoever of a debt incurred after the commencement of the Act. For a debt may have been incurred after the commencement of the Act in the sense that the last transaction with respect to indebtedness may have been entered into, after the commencement of the Act. But that transaction may be in renewal of a liability which arose prior to the commencement of the Act. Where such is the case it is difficult to exclude the applicability of S. 9 of the Act. As to how interest is to be calculated with respect to a debt incurred after October 1, 1932 the court cannot ignore the provisions of sub-s. (1) of S.doubt where the accounts have been settled between the parties and on the basis of settled accounts a new transaction is entered into between them, normally speaking, the court has no power to enquire further, except in the circumstances envisaged in some of the provisions of the Contract Act. But then there are special provisions like the Usurious Loans Act and the Act in question which clothe the courts with the requisite power. Here such a power is specifically given to the courts under Chapter II. Now, the proviso to sub-s- (1) of S.9 clearly states that any part of a prior debt which is found to be a renewal of a prior debt shall be deemed to be a debt contracted on the date on which such prior debt was incurred. Therefore, though a promissory note may have been executed after the commencement of the Act if it was in fact in renewal of a prior debt, it will have to be treated as if it was a debt incurred when the prior debt wasis true that sub-s.(1) of S.9 which provides for scaling down of debts incurred on or after October 1, 1932 does not use similar language. But it seems to us that the difference in language would not make any difference in the result because reading sub-s. (1) of S. 9 along with the provisions of .S. 7 it is abundantly clear that what the creditor would be entitled to obtain from the Court and what the Court will have to do would be to award interest only to the extent permissible by sub-s. (1) of S. 9 and this would in effect operate as a discharge of the rest of the liability for interest under the contract between the parties. Learned counsel further said that by applying the provisions of sub-sec. (1 ) of S. 9 to a debt renewed after the commencement of the Act would result in an anomaly in that with respect to renewals of certain old debts the entire liability for interest after October 1, 1932 will be wiped out whereas with regard to others the liability would exist to the extent of 5% per annum, simple interest in our judgment no anomaly results because the complete discharge of interest up to October 1, 1937, is provided for only with respect to debts first incurred prior to October 1, 1932 and this would be the position whatever be the date of renewal of such debts. This would be the consequence of the express terms of the proviso to sub-s. (1) of S. 9 which makes the provisions of S. 8 applicable to debts contracted prior to October 1, 1932 but renewed after October 1, 1932 but not to debts incurred subsequent to thatmade these provisions, there was nothing further that the legislature need have done in so far as transactions in renewal of debts contracted prior to the commencement of the Act were concerned. As to future interest, in so far as transactions prior to the commencement of the Act were concerned, the legislature has made a provision in S. 12 and in so far as transactions after the commencement of the Act are. concerned it has made a provision in S.13. Indeed, the object of the legislature in enacting S. 13 does not appear to be any other than to provide for the maximum rate of interest payable on debts incurred after the commencement of the Act and since it follows S. 12 it seems that just as the legislature divided debts into two categories it also divided rates of interest payable after the commencement of the Act into two categories. In S.12 it has prescribed the maximum rate of interest payable on debts scaled down under Ss. 8 and 9 and in S. 13 has provided for an identical maximum rate with respect to debts which could not be scaled down under Ss. 8 and 9 subject to the power of the State Government to alter it from time to time. There does not appear to be any other object such as creating a separate or independent category of debts while enacting S.13. Upon a plain construction of these provisions, therefore, we see no difficulty in upholding the ultimate decision of the High Court.The answer to the view of the High Court would be that in the first place every provision in the statute must be given effect to unless by doing as any conflict with any other provision of the Act would arise. In the second place we cannot ignore the object of the legislature in enacting this law which was to grant relief to the agriculturists and that any beneficial measure of this kind should, as far as permissible, be interpreted in such a way as to carry out the main object which the Legislature had in view. What we have said earlier in our judgment is in consonance with these principles and by interpreting Ss. 9 and 13 in the way we have done no violence will be done to the language of either of these provisions. The basis of the decision of the High Court appears to be that unless every transaction entered into after the commencement of the Act can be brought within the purview of S. 9, sub-s, (1) that provision could not apply to it at all whatever may be the date on which the original indebtedness arose. With respect, we do not see any reason for so construing the two provisions i.e., Ss. 9(1) and 13. In one judgment it is sufficient to say that full effect has to be given to both the provisions and they are to be construed harmoniously.Thus it would appear that wherever a transaction was entered into after the commencement of the Act but the original indebtedness arose before the commencement of the Act, the preponderant view is that Ss. 8 and 9 would not be inapplicable. That, as already stated, is also our view.Where a suit is instituted before a court of law for recovery of a debt from an agriculturist the court, having regard to the document on foot of which the creditor has instituted a suit was executed, finds that that document was executed before October 1, 1932 it will have to proceed to scale down the debt as provided in S. 8. If it finds that the debt was incurred after October 1, 1932 it will have to apply the provisions of S. 9 of the Act. It is these two broad categories into which debts have been divided under the Act. But,Mr. Bhimasankaram argued, there is also a third category and that is where a debt is incurred subsequent to the commencement of theIn one sense he is right because S. 13 also provides for the staling down of interest due on a debt incurred after the commencement of the Act. But it has to be borne in mind that a debt incurred after the commencement of the Act will not cease to be a debt incurred after October 1, 1932. It is common place that every provision of a statute has to be given full effect and wherever possible the Court should not place that construction upon a provision which would tend to make it redundant or to overlap another provision or to limit its application in disregard of its general applicability unless, of course, that is the only construction which could be reasonably placed upon it. If Mr. Bhimasankarams contention is accepted we will have to limit the application of S. 9 only to such of the debts incurred after October 1, 1932 as were incurred prior to the commencement of the Act. There is nothing in the language of the section which would justify so limiting its provisions. Nor again is there anything in S.13 which would preclude the application of S. 9 to any case whatsoever of a debt incurred after the commencement of the Act. For a debt may have been incurred after the commencement of the Act in the sense that the last transaction with respect to indebtedness may have been entered into, after the commencement of the Act. But that transaction may be in renewal of a liability which arose prior to the commencement of the Act. Where such is the case it is difficult to exclude the applicability of S. 9 of the Act. As to how interest is to be calculated with respect to a debt incurred after October 1, 1932 the court cannot ignore the provisions ofsubs. (1) of S.s, however, contended that where the last transaction was subsequent to the commencement of the Act the court has no power to go behind it and find out what interest has been charged by the creditor up to the date of the lastbt where the accounts have been settled between the parties and on the basis of settled accounts a new transaction is entered into between them, normally speaking, the court has no power to enquire further, except in the circumstances envisaged in some of the provisions of the Contract Act. But then there are special provisions like the Usurious Loans Act and the Act in question which clothe the courts with the requisite power. Here such a power is specifically given to the courts under Chapter II. Now, the proviso to(1) of S.9 clearly states that any part of a prior debt which is found to be a renewal of a prior debt shall be deemed to be a debt contracted on the date on which such prior debt was incurred. Therefore, though a promissory note may have been executed after the commencement of the Act if it was in fact in renewal of a prior debt, it will have to be treated as if it was a debt incurred when the prior debt wasincurred. This appears to be the true meaning of the proviso, though accordingto Mr. Bhimasankaram it deals with a debt originally incurred prior to October 1, 1932. In support of his contention Mr. Bhimsankaram relies upon the concluding portions of the proviso which read thus : ". . . . . . . . . .. and if such debt had been contracted prior to the 1st October 1932, shall be dealt with under the provisions of S.8." It is sufficient to say that the use of the conjunction and clearly shows that the proviso applies as much to debts contracted prior to October 1 st 1932 as to debts contracted after October 1, 1932 even though they may have been incurred after the commencement of the Act. If indeed it was the intention of the legislature to limit the application of the proviso in the manner suggested by Mr. Bhimasankaram it would have been easy for the legislature to say "provided that any debt or any part of a debt which is found to be the renewal of a debt contracted prior to 1st October, 1932" Instead of using the expression "prior debt" in that part of the proviso and then in the concluding portion say "if such debt has been contracted prior to 1st October, 1932". ThenMr. Bhimasankaram argued that the proviso is to subsection (1) of S. 9 and should, therefore, not be extended to embrace a debt renewed after the commencement of the Act.To accept this argument would give rise to this curious position that a debt renewed after the commencement of the Act would for the purposes of the Act not be a debt incurred after the October 1, 1932.We were also referred to the decision in Punvavatamma v. Satyanarayana, ILR (1960) 2 Andh Pra 11 ; Nagabhushanam v. Seetharamaiah, ILR (1961) 1 Andh Pra 485 : (AIR 1961 Andh Pra 224) (FB) and Chellammal v. Abdul Gaffoor Sahib, ILR (1961) Mad 1061 : (AIR 1962 Mad 1   ) ( FB). In the first and the third of these cases the original liability arose after the commencement of the Act but in second one it arose before the commencement of the Act. We agree with the view taken in the latter case that relief can be given to an agriculturist in such a case under S. 8 or S. 9 as the case may be.