BALASUBRAMANIA PILLAI Vs. ARUMUGHAM PILLAI AND ANR.

JUDGEMENT

(1.) This case raised an important question relating to the interpretation of Sec. 7(2) and Explanation 1 of the Tamil Nadu Debt Relief Act, 1972 (XXXVIII of 1972) (hereinafter called the Act). Before dealing with that question, we may shortly state the relevant facts. The suit was filed by the Appellant -Plaintiff for recovery of a sum of Rs. 2,215 -40 p., due on a simple mortgage, dated 14th October, 1970. That mortgage was executed by the Defendants for a sum of Rs. 5,000 mortgaging three items of property. The interest was payable at 12 per cent per annum each month and in default, at 18 per cent per annum from the date of default. It appears that one of the items of mortgaged property was sold to one Surname on 20th March, 1974 for a sum of Rs. 6,000 and on the purchaser paying the entire sum of Rs. 6,000 towards the mortgage, the Plaintiff released that item from the mortgage. The amount claimed in the suit is arrived at on the following basis; The amount advanced Rs. 5,000 and interest from 14th October, 1970 to 20th March, 1974, Rs. 3,090 making a total of Rs. 8,090. On 20th March, 1974 a sum of Rs. 6,000 was received from the purchaser of one of the mortgaged items and after deducting this amount, the amount payable under the mortgage was determined at Rs. 2,090 as on 20th March, 1974. An interest of Rs. 125.40 P. has been claimed for the period from 20th March, 1974 to 20th July, 1974 the date of suit, making a total of Rs. 2,215 -40 P. The Defendants, relying on Sec. 7 contended that no amount was due. Though the trial Court decreed the suit it restricted it to an amount of Rs. 2,090 and did not give the interest of Rs. 125 -40 P. But an appeal, the lower appellate Court reversing the judgment of the trial court held that no amount was due in view of the provisions of Sec. 7 and dismissed the suit. Hence the second appeal.

(2.) Though we are primarily concerned with the provisions of Sec. 7(2) read with Explanation -1, it will be useful to quote the entire Sec. 7 as some of the reasoning will have a bearing on the other provisions in the same section. Accordingly that Sec. is quoted

(3.) It may be seen from Explanation -1 that, if the payment of Rs. 6,000 made by, the purchaser of one of the items of mortgaged property was taken as a payment made by the debtor, the amount being in excess of the principal amount of Rs. 5,000 no amount will be due for payment. But the learned. Counsel for the Appellant contended that in order to enable a debtor to invoke the provisions of Sec. 7, especially "Explanation -1, the payment towards the mortgage money should have been made by the debtor himself and any payment made by any person, other than the debtor could be appropriated by the creditor towards any interest that, may be due and that, therefore, any balance towards principal after such appropriation is payable by the debtor. In this connection, the learned Counsel relied on certain decisions rendered under the corresponding provision in the Tamil Nadu Agriculturists, Relief Act, 1933 (IV of 1938). The earliest of the decisions which was referred to by the learned Counsel was Ramasawmi Pillai v/s. Sankara Mudaliar : (1950) 1 M.L.J. 224. That decision was concerned with the interpretation of Sec. 8 of the Agriculturists' Relief Act. The provision of Sub -section (3) of Sec. 8 is identical with Sec. 7(2) of the Act now under consideration. But explanation 1 to Sec. 8 as amended by Madras Act XXIII of 1948 was slightly different and that read as follows: