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1978 Supreme(AP) 211

Andhra Pradesh High Court
Judges : A.SAMBASIVA RAO, S.MADHUSUDAN RAO, V.MADHAVA RAO
Kancherla Purshotham - Appellant
Versus
Kadimcherla Nageswara Rao - Respondent
A. S. No. 175/74
Decided On : 07-21-78
Advocates Appeared :
.

Headnote:Andhra Pradesh (Andhra Area) Agriculturists Relief Act 1938, Section 13 and Interpretation of Statutes-Open payments made by agriculturist debtor towards a debt contracted after the comment cement of the Act. Mode of appropriation-Open payment should be appropriated towards principal.

       Held: The anomalous result can be obviated and full effect can be given to Section 13 of the Act with reference to the object of the Legislature only by applying the open part-payments towards principal. Otherwise the specific mandate of Section 13 that all interest due shall not exceed a sum calculated at 5½ % per annum simple. Interest cannot be complied with. The mere absence of a provision similar to Explanation (1) to Section 8 in Section 13 does not in any way enable the creditor to defeat the object of Section 13.

       Section 13 shall have to be interpreted not merely with reference to the manifest object of the Legislature as envisaged in Sections 7, 8 and 9. If Section 13 has to be interpreted as a provision only in regard to the rate of interest payable by a debtor without in any way affecting the common law right of a creditor to appropriate an unspecified part payment, the intendment of the Act and the mandate contained in the section itself.

       1941 (2) M. L. J. 307 held not good law.

       Decision in L. P. A. 131 of 1973 dt. 6-8-1976 affirming decision in 1973 IAPLJ 377 affirmed. A. I. R. 1960 A. F. 174 and 1970 II An. W. R. 215 overruled. (Dissenting) : It cannot be said that open payments made by the debtor have to be appropriated toward the principal alone under Section 13 of the Act. If the Legislature wanted that the open payments incurred subsequent to the commencement of the Act were to be appropriated toward the principal alone under Section 13 of the Act. If the Legislature wanted that the open payments incurred subsequent to the commencement of the Act were to be appropriated towards the principal alone, it could have definitely added an Explanation to Section 13 similar to explanation 1 to 8. The Legislature is deemed to be accredited with the knowledge of the prevailing practice that in the absence of Explanation 1 the creditor is entitled to appropriate the open payments first towards interest and the balance if any, towards the principal. To avoid this kind of appropriation in respect of the debts governed by Section 8, Explanation 1 is inserted by way of amendment.

       A. I. R. 1965 S. C. 577 referred to A. S. dismissed

MADHUSUDAN RAO, J.

( 1 ) THIS Full Bench is constituted to resolve a conflict of views in regard to the mode of appropriation of open payments made by an agriculturist debtor towards a debt contracted after the commencement of the Madras Agriculturists Relief Act, 1938 which was adapted in this State as the Andhra Pradesh (Andhra Area) Agriculturist Relief Act.

( 2 ) THE appellant is the plaintiff. The contesting respondents 1 to 4 are the defendants 1 to 4 respectively. The second defendant is the undivided son of the first defendant. The defendants 1, and 4 executed a mortgage hand in favour of late Kancherla Narasimham, the father of the plaintiff for Re, 16,000 on 8-11-1951 agreeing to pay the amount in four equal yearly installments of Rs. 4,000 with interest at 10% p. a. and in default of payment of the instalments at 12% compound interest per annum. They made part-payments of Rs. 7,000 on 15-3-53, Rs. 800 and 17-2-55, Rs. 600 on 19-3-55, Rs. 1,400 on 12-6-56, Rs. 1,460 on 22-9-56, Rs. 100 on 12-3-57, Rs. 100 on 7-11-59 and Rs. 950 on 9-6-61 No payments were made subsequent to the payment on 9-6-61. During his lifetime Kancherla Narasimham executed a registered will bequeathing all his movable and immovable properties in favour of his son, the plaintiff, After the death of Narasimnham the plaintiff instituted the suit against the suit four defendants for recovering an amount of Rs. 13 ,826-23 ps. being the principal and interest due on the bond by the date of suit, He impleaded the Official Receiver, West Godavari the 5th respondent herein, as the 5th defendant Since the first defendant was adjudged insolvent in I. P. 11 of 64 on 26-7-65. The plaintiff sued for an amount of Rs 13,800 and odd only, as the defendants 1 to 4 are agriculturists entitled to the scaling down of the interest at 5 1/2 p. a, simple interest. Before the trial Court, the plaintiff died a memo stating that by correctly Calculations the amount due to him under Section 13 of the Act 5 1/2% p. a. simple interest, he would be entitled to only Rs. 11,910-78 Ps. and prayed that a decree may be passed for that amount. The defendants 1 to 4 contended that the suit mortgage bond was not fully supported by consideration, that the suit was barred by time and that at any rate, the open payments made by them were not properly appropriated by the plaintiff.

( 3 ) THE trial Court found that the suit mortgage band was supported by consideration only to extent of Rs, 15,525 that the suit is not barred by time and that as the part-payments made by the defendants were open, without any specification in regard to their appropriation towards interest or towards principal the plaintiff could not apply the payments towards the interest that accrued up to the dates of the payments and balance alone towards partial discharge the principal amount. It held that these open payments should be appropriated towards principal debt. Accordingly the trial Court passed a preliminary decree in plaintiffs favour for a sum of Rs. 8,226-85 ps, with proper costs together with interest at 5 1/2% p. a from the date of plaint till realisation. Granting three time for redemption the court the plaintiff to proceed against properties allotted to the share of the first defendant in the first instance to proceed against the share allot to the third defendant only in the event of the decree debt not being realised by the sale of the specified properties the first defendant. In passing a decree for Rs. 8,000 and odd, the learned Subordinate Judge relied an the decision in I. V. Subbaiah v. I. Venkatrayudu, (1973) 1 APLI 377 in which one of us held that under S. 13 of the Andhra Pradesh (Andhra Area) Agriculturists Relief Act, 1938 an open part-payment made by a debtor towards a debt incurred after the commencement of the Act cannot be appropriated by the creditor towards the interest and the balance alone towards partial discharge of the principal amount but that the part-payment should be appropri





























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