CHARLES N. AMBROSE Vs. MEENAKSHI AMMAL RAMAL AMMAL

JUDGEMENT

(1.) THE first Defendant in O.S. No. 90 of 1111 of the Nagercoil District Court, who is the Petitioner in a Debt Relief Petition, is the Appellant in this case. The suit was on a hypothecation bond executed by the Defendants in favour of the Plaintiff for a sum of Rs. 4,000/ -. There was a provision in the hypothecation bond to the effect that arrears of interest should be treated as principal and that interest should be paid on such arrears also. When the suit was pending, the first Defendant filed a petition under Sections 9 and 15(1), Travancore Debt Relief Act. The suit was subsequently decreed. According to the first Defendant the debt payable under the Act was only the principal amount of Rs. 4,000/ - and interest amounting to a moiety. As there was dispute in respect of the amount of the debt he prayed for an order of the court fixing the amount. The main objection raised by the Plaintiff to the petition of the first Defendant was that the amount that was to be treated as principal under Section 11 of the Act was not only the original sum lent but also the arrears of interest agreed to be treated as principal under the terms, of the bond.

(2.) THE court below by its order dated 9 -7 -1116 held that the amount of the debt payable by the debtor on the date of the Act was only Rs. 6,000/ - including interest and directed the first Defendant to pay the same according to the provisions of Section 9(1) of the Act. Section 9(1) relates to the discharge of the debt by payment of 30 per cent, of the debt within 9 years from the date of the Act. In the Debt Relief Petition the first Defendant had not stated that he proposed to pay 80 per cent, of the debt within 9 years under Section 9(1). The petition was filed, as stated above, under Sections 9 and 15(1) of the Act. The averment in the petition was only to the fact that the Petitioner wanted to pay the debt in installments. It is true, that it was stated in the petition that as per proviso (c) to Section 9(1) of the Act the Petitioner was bound to deposit 6 per cent of the debt. But that proviso applies to payment of 75 per cent of the debt within 6 years and 70 per cent within 2 years under Sub -section (2) of Section 9.

(3.) THE Plaintiff appealed from this order in A.S. No. 159 of 1117 of the Travancore High Court and the High Court by its order dated 21 -12 -1118 reversed the order of the trial Court and held that the amount that was to be treated as principal under Section 11 should include arrears of interest agreed to be treated as principal under the terms of the contract, and remanded the Debt Relief Petition to the lower Court for ascertaining afresh the amount of the Debt payable under the Act. The lower Court was also directed to allow the debtor to pay the debt in installments under Section 9 of the Act and to grant him reasonable time to pay up the installments that had fallen due. Soon after the records were received in the court below, i.e. on 28 -1 -1120 the Defendant filed a petition to the effect that he had deposited in court the whole amount payable by him under the provisions of the Act and prayed for an order declaring that the debt has been discharged. The debtor's case was that he had deposited 70 per cent of the debt with interest thereon and that he was entitled to the benefit of Section 9 Sub -Section 2(b). The Plaintiff filed, an objection to this petition in which it was contended that the amount deposited by the first Defendant was not sufficient and that the deposit was not made in time. As for the amount it was agreed that the principal amount payable on 18 -11 -1111 on the basis of the order of the High Court was, Rs. 52,330/ -. The dispute between the parties related to the rate at which interest should be calculated from the date of suit to the date of the Act. The High Court order provided that stipulated interest would be allowed from the date of suit to the date of the Act. The Plaintiff contended that 'stipulated interest' meant interest stipulated in the hypothecation deed while the Defendant contended that it meant interest stipulated in the decree. The rate of interest provided in the hypothecation bond was 12 per cent per annum while the interest awarded by the decree from the date of suit was only 6 per cent. The Court below held that the debtor was liable to pay only 8 per cent interest from the date of suit to the' date of the commencement of the Act. After filing of the Debt Relief Petition he had deposited Rs. 750 on 20 -3 -1116, Rs. 1400 on 20 -10 -1116, Rs. 1100 on 6 -4 -1117, Rs. 1125 on 27 -1 -1118, Rs. 2035 Chs. 20 on 20 -1 -1120, and Rs. 1390 Chs 225 Cash 12 on 27 -1 -1120. According to the debtor these amounts would make up 70 per cent of the debt and interest thereon payable under Section 9(2)(b) of the Act. It was on this basis that he contended that the whole debt has been discharged. The Court below by its order dated 12 -7 -1122 held that the amount deposited by the debtor was sufficient to make up 70 per cent of the debt and interest thereon.