PUNJAB NATIONAL BANK Vs. PREM SAGAR

JUDGEMENT

(1.) ORDER :- When would interest cease to run on the payments made towards the discharge of the interest-bearing decretal amount, is the main question which falls for determination in these cases. This would, in turn, depend upon the scope and interpretation of R.1 of O.XXI as amended by Civil P.C. (Amendment) Act, 1976, which came into force with effect from Feb. 1, 1977.

(2.) The law on the above point, as it stood before the amendment referred to above, was clear inasmuch as the Supreme Court in AIR 1970 SC 161, Meghraj v. Bayabai had approved the normal rule, based on the conjoint reading of S.60 of the Contract Act, 1872 and O.XXI, R.1 of the Civil P.C. 1908, that any payment made by a judgement debtor was to be applied in the first instance towards the satisfaction of interest and thereafter to the principal amount, unless otherwise indicated by the judgement-debtor while making the payment. The ratio of Meghraj's case (supra) has been consistently followed by the High Courts and a number of authorities have been cited on the point but, for the sake of brevity, there appears no need to notice the same. It has, however, been conceded at the Bar that none of the case law, thus cited, has taken into its ambit the specific amendments inserted in R.1 of O.XXI of the Civil P.C., 1908.

(3.) Rule 1 of O.XXI, before its substitution by the Amendment Act, 1976, read as follows :-