VELAGA VENKATAPPAYYA Vs. TRIPURAMALLU PUNNAYYA

JUDGEMENT

(1.) The question in this second appeal turns on the construction to be put upon Section 3 (iii-a) of Madras Act IV [4] of 1938.

(2.) Some material facts may be briefly stated. Defendants 1 and 2 for themselves and defendant 1 as guardian of defendants 3 and 4, executed a mortgage deed dated 29-11-1940 in favour of the plaintiff. The principal sum was Rs. 1000. It was stipulated therein that the loan should be discharged by delivery of eight annual instalments of 35 bags of paddy each, and, in default, each of the instalments should carry interest at 12 per cent. per annum. The defendants paid four instalments. As default was made in regard to the 5th and 6th instalments, the mortgagee filed O. S. No. 267 of 1946 on the file of the District Munsif Court, Tenali, for recovery of the produce payable to him valuing the same at Rs. 11 per bag. Though under the terms of the document, he was entitled to claim interest at 12 per cent. per annum, he was content with claiming 61/4 per cent. per annum. The defendants contended that the debt should be scaled down under the provisions of Madras Act IV [4] of 1938. The learned District Mansif held that Section 13 of the Act applied, and he accordingly scaled down the debt. He also found that the entire debt on scaling down, came to Rs. 1368-6-5, and, deducting Rs. 1115, being the money value of the instalments of paddy already paid, held that the balance payable to the mortgagee would be Rs. 263-6-5. In appeal, the learned Subordinate Judge took the view that, as no interest was payable under the document, the debt was not liable to be scaled down under Section 13. The defendants have preferred this second appeal.

(3.) Pending the second appeal, the Madras Agriculturists' Relief Act was amended by Act XXIII [23] of 1948. In the amending Act, interest has been denned in the following manner :