ANANTHASIVA IYER Vs. OUSEPH OUSEPH

JUDGEMENT

(1.) THESE six appeals arise out of proceedings in respect of three hypothecation bounds executed by three brothers to the appellant. A. S. Nos. 105,106 and 107 are from orders passed on applications filed by the three debtors in the District Court of Kottayam for settlement and discharge of the debts under S. 8, 9 and 15 of the Act. The other three appeals are from decrees dismissing three suits filed by the creditor for recovery of the debts on the allegation that the debtor had forfeited the benefits available under the Act. All the appeals were heard together. The early history of the proceedings under the Debt relief Act has been summarised in the judgment in A. S. Nos. 51, 52 and 53 of 1125 of the Travancore-Cochin High Court and the same is extracted below: "three brothers Isaac, Thomas and Joseph had executed three separate hypothecation bonds to the respondent. The amount secured by each bond was a certain sum of money and a certain quantity of paddy. THESE documents are Exts. I, II and III. After the Debt Relief Act was promulgated the brothers filed three petitions D. R. P. Nos. 3,5 and 7 of 1118 for discharge of the money portion of the debt and D. R. P. Nos. 4, 6 and 8 of 1118 for discharge of the paddy portion. They deposited not less than 6 per cent of the admitted amount on account of instalments 1 and 2. Then on 31. ~~ ~~~~ each of them deposited 70 per cent of the money portion of the debt and applied for an order that the moneys due under the three bonds do stand discharged. They were depositing thereafter the instalments on account of the paddy portion. Their petitions to enter satisfaction were heard and disposed of by the learned District Judge. In that it was declared that the money portion of the debt was discharged, that the paddy portion could be discharged only by deposit in instalments and that the price of paddy was to be calculated, not at the Nirak rate prevailing on the dale of the petition but at the Nirak rate as and when the instalments fell due. Against this, the debtors filed A. S. No. 435 of 1122 in the High Court. The creditor also filed A. S. Nos. 461 to 466 of 1122. All these appeals were heard together by the High Court. It was held that the debts, both the money portion and the paddy portion covered by Exts. I to iii should be considered to be one composite debt which in law was liable to be discharged only as a whole, that there was no justification for seeking discharge of a part without reference to the discharge of the remaining part, that the order entering satisfaction of the money portion was therefore wrong and should be set aside and that the nirak rate of paddy on account of the quantity of paddy due for successive instalments should be that prevailing in the Ambalapuzha taluk where the creditor lived. The direction therefore was to dismiss the debtors' appeals and to allow in part the creditors' appeals. It was directed that the deposits made by the respective debtors would be adjusted towards the 6 per cent due for each instalment commencing from the third, paddy being valued at the nirak rate prevailing on each of the instalment dates. If the amounts deposited till then were found sufficient to effect a complete discharge of the debt due under the respective hypothecation deeds, the discharge order would be made as on the dates when the last adjustment was made. If on adjustment, the payments made till then were found to be insufficient to satisfy the requirements of any one of the three sub divisions of S. 9 of the Debt Relief Act, the debtors were under that order allowed the liberty to make payments of the balance subject to the provisions of the Act and then apply for an order of discharge. This order was passed on 32. 12. 1123. After the records were sent back to the lower court, steps were taken to make a calculation of the amount due from the debtors to the creditor.

(2.) THERE was admittedly a deposit of over Rs. 4 000/- in each of the three cases by the debtors on 31-1-1118. The lower court directed that this amount was to be kept with the creditor who had drawn the same from court and then utilised for payment of the instalments commencing from the 3rd as and when they fell due. He was however directed to pay 4 per cent interest on the amounts that would be found due with him after the appropriation for each instalment. The Nirak rate of paddy was directed to be with reference to that prevailing on the dates as and when the instalments "fell due. " it was also directed that the 80 per cent of the debt found due on 31-1-1116 was to be taken into account in making the calculation. The appeals are by the debtors against the orders passed in the three petitions. The creditor has filed memoranda of objections in the three appeals by the debtors. The direction to take 80 per cent of the amount due on 31-1-1116 was contended to be wrong besides the direction to pay interest on the amount deposited by the debtors in 1118. " 2. In disposing of appeals Nos. 51 to 53, it was held that the sum of Rs. 4000 deposited by each debtor on 31-1-1118 was to be applied towards discharge of the instalment which was in arrear on that date as well as future instalments, that the creditor was not liable to pay interest on the sum of Rs. 4000 and that if the amount deposited was less than 80 per cent of the debt, the debtors were to be allowed reasonable time to make good the deficiency so as to enable them to have the benefit under the Debt Relief Act. The records were sent down to the District Court to decide whether the debts could be deemed to have been discharged in the light of the appellate judgment and to give an opportunity to the debtors to make good any deficiency.

(3.) THE decision of the three appeals A. S. Nos. 210, 211 and 333 depends on the decision in the other three appeals since the suits must be dismissed if it is found that the debts are discharged under the Debt Relief act. THE main question for decision therefore is whether the debtors have discharged the debts under S. 8 and 9 of the Debt Relief Act or whether they have forfeited the benefits under the Act by default in payment of three consecutive instalments. Certain other questions also arise which will be considered later.