BULK POCHAMMA Vs. ANISETTI SURAYYA

JUDGEMENT

(1.) .The second appeal and the three revision petitions have been referred to a Bench, the former by Gopal Rao Ekbote, J., and C.R.P. No. 383 of 1944 by Venkatesam, J., C.R.P. No. 921 by one of us, and C.R.P. No. 1319 by Shastry, J., having regard to certain observations in Krishnayya v. Seshachalam, (1965) 1 M.LJ. (S.C.) 86: (1965) 1 An. S.C.R. 195: A.I.R. 1965 S.C. 639. W.R. (S.C.) 86: (1965) 1 S.C.J. 533: (1965) 1 which is said to throw a doubt on the correctness of the decision of a Full Bench of this Court in P. Sriramulu V. Ravuri Nagaiah, (1963) 1 An. W.R. 373. to which one of us (the Chief Justice) was a party.

(2.) The question that falls for determination is whether in a debt incurred after the Madras Agriculturists Relief Act (XIV of 1938) (hereinafter called the Debt Relief Act) came into force on sand March, 1938 interest is chargeable at the statutory rate on the amount of the promissory note, which is the subject-matter of the suit, or whether the debt should be traced back to its origin and the statutory rate of interest calculated for that date irrespective of whether it is renewed or included in a fresh document in favour of the same creditor or a different person or whether the debtor is the same or not.

(3.) In the second appeal, the suit was filed for recovery of the principal sum of Rs. 1,500 due on a promissory note executed by the respondent in favour of the appellant. Though the stipulated rate of interest is 12 per cent per annum interest is claimed at 5 per cent per annum inasmuch as the respondent was an agriculturist. While the respondent admitted execution of the suit promissory note, but stated that the promissory note was not for cash consideration but was in renewal of a prior promissory note debt which Was executed to save limitation. It was contended that the debt was the result of 5 borrowings of Rs. 100 each on different dates, viz., 21st May, 1949, 26th June, 1949, 19th January, 1950, 13th june, 1950 and nth January, 1951. On 3rd March, 1951, he borrowed another sum of Rs. 135, and together with interest at 12 per cent on the five prior pronotes, he executed another promissory note for Rs. 700 on 3rd March, 1951. On 20th November, 1951, he borrowed another Rs. 56 and together with interest on the promissory note of 3rd March, 1951 for Rs. 700 he executed a promissory note for Rs. 816 on 2Oth November, 1951. On roth November, 1954 he renewed it for Rs. 1,107. The suit promissory note is a renewal of this promissory note of 10th November, 1954. In view of these several borrowings, the respondent prayed that the suit may be decreed for the sum that is due as scaled down under section 13 of the Debt Relief Act, i.e. for Rs. 1,088-22 in accordance with a memo of calculation filed along with the statement. The District Munsif found by his judgment dated 19th October, 1960 that the suit promissory note was executed for cash borrowed and not in renewal of prior promissory notes and in that view, he decreed the suit as prayed for by the plaintiff. In appeal, the District Judge reversed the finding of the District Munsif holding that the suit promissory note was executed in renewal of a prior debt and the amount due as scaled down under the Debt Relief Act is, as stated by the respondent, Rs. 1,088-22, and decreed the suit with interest at 5 per cent on the original debt of Rs. 691 from 2nd June, 1960 till payment with proportionate costs C.R.P. No. 383 of 1964 arises out of a Small Cause SuitNo. 131 of 1961 for recovery of Rs. 758-62 being the principal and interest due on promissory note, dated 15th May, 1961 executed by the defendant in favour of the plaintiff for Rs. 680 with an agreed rate of interest of 12 per cent per annum. The plaintiff claimed interest only at the rate of 5 pereent per annum. The defendant in his written statement averred that the suit debt originated earlier and is itself a renewal of an earlier promissory note. He contended that he is liable to pay only the amount as scaled down tracing the debt to the original borrowing. The Subordinate Judge, Eluru, held that the suit promissory note was not supported by cash consideration as recited therein, but that it was a renewal of a debt dated 7th May, 1958, the debt itself originating with a khata debt of Rs. 400, dated 1st April, 1953. Accordingly the suit debt was scaled down tracing it back to the borrowing evidence by Exhibit A-8. G.R.P. No.921 of 1964 arises out of a small cause suit for recovery of Rs. 850 on a promissory note executed on 8th September, 1954, under which interest at 12 per cent per annum was agreed to be paid by the respondent. The respondent in his written statement stated that no cash consideration was paid and that the pronote was in renewal of a previous promissory note dated 18th December, 1951 for Rs. 640 executed in favour of the plaintiff's father Venkayya, which was also a promissory note in renewal of a prior debt dated 3rd January, 1949 of Rs. 470 due to the very same Venkayya. The defendant stated that the debt is liable to be scaled down under the Debt Relief Act. The trial Court held that the promissory note was not supported by cash consideration but was executed in renewal of an earlier pronote and that interest had therefore to be scaled down from the date of borrowing at the rate of 5 per cent per annum.