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1984 Supreme(AP) 338
Andhra Pradesh High Court
Judges : P.KODANDA RAMAYYA
MEDIKONDA SATYANARAYANA - Appellant
Versus
ANDHRA BANK LTD., ELURU, M.PAMAKRISHNA MURTHY, MANAGER, POWER OF ATTORNEY HOLDER - Respondent
A.S.No. 182 of 1979
Decided On : 09-01-84
Advocates Appeared :
Mr. S. Venkata Reddy, Mr. V. R. Reddy
Headnote:A.P. (Andhra Area) Agriculturists Relief Act, (Act IV of 1933) Sec. 4 (e) - Banking Regulation Act (10 of 1919) Sec. 21-A (as inserted by banking Laws (Amendment) Act, 1983 (1 of 1984) - Debts due to Banks are not excluded from purview of Act IV of 1938 inspite of Sec. 21-A of Central Act.
HELD : Though the original Act IV of 1938 excepted all bank debts from the purview of the said Act the State Legislature amended the Central Act and gave marginal benefit to the agriculturists by enacting a presumption. The provision of these two acts are intended to govern different fields and different classes of persons. The Central Act is intended to prevent collection of interest which is considered to be excessive and substantially unfair. The provisions of Section 3(2) laid down several criteria to find out when a rate can be said to be excessive. But the object of State Act is quite different. It is intended to confer special benefit as a class legislation on agriculturists. The benefit conferred upon the Act is not to merely prevent an excessive rate of interest but to wipe out the indebtedness of the agriculturists as a class. In fact it makes a special provision under Sec. 9-A of the Central Act in respect of mortgages wiping out those debts altogether in certain circumstances. The benefit conferred under the Act is not merely for preventing the excessive collection of Interests but liquidating the debts themselves. The operation of the Central Act and the State Act are quite independent and intended to achieve different objects altogether. Once the provisions of both Acts are seen the concept of excessive rate is different in both the enactments actions on the ground that the rate of interest charged by the Banking company in respect of such, transaction is excessive. The relief under the State Act is not on the ground the it is excessive but in on the ground that the general indebtedness of agriculturists shall be relieved an they should not be required to pay more than the statutory rate and also to liquidate certain debts in its scheme.
Sec. 21-A of the Central Act has not the effect f engrafting an exception to the debts due to the bank without the necessity of amending the State Act. It prohibits the reopening of the debts on the ground that it is excessive whereas the State Act liquidates the debts on the ground that the debtors are agriculturists. The operation of both the Acts is quite distinct and different. Hence the debts due to the banks are not excluded from the purview of the State Act as excepted debts by virtue of Section 21-A of the Central Act and the agriculturists governed by Act IV of 1938 are entitled to the benefit of the said State Act in respect of the debts due to the banks also.
( 1 ) THE scope and true effect of Sec. 21-A of the Banking Regulation act X of 1949 (hereinafter called the Act) falls for determination in this appeal. The defendants who suffered an ex parte decree on the foot of a mortgage at the instance of the plaintiff bank are the appellants in this appeal. The defendants remained ex parte in the trail court and subsequent to the priliminary decree, a final decree was also passed.
( 2 ) IN this appeal filed against the priliminary decree the sole question raised is whether the defendants who claim to be agriculturists are entitled to the benefit of Act IV of 1938 (hereinafter called the State act.)
( 3 ) THE learned counsel for the appellants relied upon a judgment of this court reported in Indian Bank, Alamuru vs. M. Krishna Murthy wherein the latter portion of Sec. 4 (e) of Act IV of 1938 was struck down as offending Art. 14 of the Constitution of India. By virtue of the said provision as originally stood the debts due to the banks are excepted from the purview of the Act. The original provision Sec. 4 (e) is in the following terms :"4. Nothing in this Act shall affect debts and liabilities of an agriculturist falling under the following Heads : (a) and (d) [xx xx xx xx] (e) any liability in respect of any sum due to any co-operative society including a land mortgage bank, registered or deemed to be registered under the Andhrn Pradesh (Andhra Area) Co-operative societies Act, 1932, or (any debt due to any corporation formed in pursuance of an Act of Parliament of the United kingdom or of any, special Indian Law or Royal Charter or letters Patent)". The latter portion of this clause shown in brackets was struck down and hence the exception in favour of the banks or other corporations enumerated therein is no longer in operation. Hence it is urged that the argiculturists governed by this Act are entitled to get benefit even in respect of the debts due to the bank and no bank can collect the rate other than the one notified under Sec. 13 proviso of the Act.
( 4 ) IN answer to this submission the learned counsel for the plaintiff relied upon Sec. 21-A of the Banking Regulation Act inserted by sec. 24 of the Banking Laws (Amendment) Act 83 (1 of 1984 ). The provision is in the following terms :"21-A. Rates of interest charged by Banking Companies not to be subject to scrutiny by Courts. Notwithstanding anything contained in the Usurious Loans act, 1918 or any other law relating to indebtednes in force in any state, a transaction between a banking company and its debtor shall not be reopened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. "
( 5 ) IT is urged that in view of the said provision that notwithstanding the above judgment, the transactions between a banking company and its debtors cannot be reopened in spite of the provisions of Usurious loans Act or any other law relating to indebtedness in force in any State. Hence the question is whether this provision has the effect of making the provisions of the Madras Agriculturists Debt Relief Act IV of 1938 inapplicable to debts due to banks.
( 6 ) ON the other hand the learned counsel for the appellants contended that unless the exception engrafted in Sec. 4 (c) was re-enacted the benefits conferred under Act IV of 1938 shall continue in the State of andhra Pradesh and Sec. 21-A has no application.
( 7 ) WE have to consider the operation of both the Acts. While constru;ng this provision it is necessary to bear in mind that Act 1 of 1984 pertains to Banking Laws, whereas Act IV of 1938 is a law, relating to relief of the agriculturists indebtedness governed by Entry 30 of List If of Seventh Schedule of the Constitution of India.
( 8 ) THE learned counsel for the respondent-Bank contended that. 1. The non-obstante clause in Sec. 21-A of the Act clearly brings in all laws relating to indebtedness in force in any State and the present sta
