PHILIPPOSE THOMAS Vs. SBT

JUDGEMENT

(1.) The main question that arises in this appeal is whether the defendant, a debtor, is entitled to the benefits under Act 31 of 1958 in respect of a debt owing to a Banking Company. The defendant executed an overdraft agreement and a promissory note, as collateral, security for the due payment of the amount, in favour of the Orient Central Bank Ltd. on 15 7 1954. These are evidenced by Exts, P-1 and P-2 respectively. The pronote was for a sum of Rs. 1000/-. the Orient Central Bank Ltd. was later amalgamated with the Kottayam Orient Bank Ltd. Afterwards the Kottayam Orient Bank Ltd. was amalgamated with the State Bank of Travancore, which is the plaintiff. The dealings of the defendant which commenced with the Orient Central Bank Ltd. were continued with the Kottayam Orient Bank Ltd." For the amounts due as per Ext. P1 overdraft agreement payable to the Kottayam Orient Bank Ltd. the defendant executed a fresh agreement and also promissory note as collateral security. This was on15-7-1957 The Kerala Agriculturists Debt Relief Act, (Act 31 of 1958) came, into force on the 14th of July 1968. Long after, that, on. 12-7-1960, the defendant again executed another overdraft agreement Ext. P5 in favour of the Kottayam Orient Bank LTD in respect of the liability incurred under the earlier, transaction. A promissory note Ext. P5 was also executed as collateral security. Subsequently this Suit was filed by the plaintiff bank for amount found due under Ext. P5 agreement. The defendant contended that he was entitled to the benefits of Act 31 of 1958 and, therefore, the amount due was liable to be Calculated in accordance with the, provisions, of that Act. The Trial Court accepted this plea of the defendant and gave a decree to; the plaintiff." for amount due calculated in accordance with the provisions of Act 31 of 1958. The plaintiff took up the matter in appeal. In the appeal, the main contention raised by the plaintiff was that Exts. P5 to P7 evidenced a renunciation of the right of the defendant under - Act 31 of 1958 and such renunciation being after the commencement of the Act, it is not open to the defendant to fall back upon the original transaction evidenced by Exts. P1 and P2. This contention was accepted by the appellate court which held that the Trial Court was in error in applying sub-s.(1) of S.5 to the plaint liability. The suit was, therefore, decreed in terms of the plaint. The defendant, who lost in the lower appellate court, has come up in this second appeal.

(2.) In view of the fact that the only question argued in this appeal by both sides concerns the applicability of Act 31 of 1958 to a case where the original debt is renewed under a fresh document executed after the commencement of Act 31 of 1958 I do not propose to consider the other questions raised in the memorandum of appeal but not argued before me. The only question for decision is whether a 'debt' which was incurred prior to the commencement of the Act 31 of 1958 and in respect of which a fresh document is executed after the commencement of the Act, renewing or including the debt so incurred, is a debt to which the Act applies. The case of the plaintiff is that it would not apply in view of the definition of 'debt' in S.2(c) of the Act which in terms limits it to liabilities due from or incurred by an agriculturist on or before the commencement of the Act. The defendant, in answer seeks to draw a distinction between incurring of liability and its "payability''. According to him even in the case of a renewed debt or one included in fresh document, the incurring of the liability is under the original document, but it is payable under the fresh document; that it is immaterial that it becomes so payable after the commencement of the Act, so long as the incurring of the liability is under a transaction entered into on or before the commencement of the Act. In view of this it is the construction of S.2(c) of Act 31 of 1958 that arises for decision in this appeal.

(3.) S.2(c) of the Kerala Agriculturists Debt Relief Act 31 of 1958 defines a debt as follows:-