The main legal point established is the court's interpretation and application of the Kerala Agriculturists Debt Relief Act, S.4(3), S.2(4), S.5(2), and S.34, as well as S.72 of the T. P. Act in determining the payment of decree amount in instalments, calculation of principal amount, interest, and insurance premia.

1. The 3rd defendant in a suit for realisation of money secured by an equitable mortgage filed by a Bank (which now is a nationalised one) is the appellant. The court below has passed a preliminary decree for sale of the mortgaged properties plaint. A schedule properties for realisation of a sum of Rs. 1,46,643-24 with interest on the principal amount of Rs. 1,25,000/ - at the rate of 6% per annum from the date of suit till realisation and also for costs of the suit The only relief which the 3rd defendant prays for is payment of the decree amount in instalments as she is entitled to being an agriculturist under S.4 (3) read with the proviso to clause (1) of S.2 (4) of the Kerala Agriculturists Debt Relief Act (shortly stated the Act). However the time fixed as per the Act for payment of these instalments are already over. The appeal as such have become infructuous. Hence it is dismissed, but in the circumstances of the case without costs.

2. However, we have to deal with the Cross Objections filed by the Bank in the matter. The contentions raised by the Bank are:

(i) the principal amount sued on is Rs. 1,39,130-03 and not on R. 1,25,000/-as erroneously assumed by the court below;

(ii) even assuming that the 3rd defendant is entitled to take advantage of S.5 (2) of the Act the lower court ought to have allowed interest at 91/2% per annum, the contract rate till 14 7 70 and thereafter at 1% per annum till date of preliminary decree namely 5 4 72;

(iii) the court below erred in not allowing interest on the insurance premia paid pending suit;

(iv) The court below should have allowed future interest at 6% per annum on the whole of the principal amount namely Rs. 1,39,130-03 plus R.6, 081-31 (insurance premia paid pending suit).

3. In regard to the first question what is the principal amount sued on Mr. T. L. Viswanatha Iyer, learned counsel for the respondent-bank pointed out that as per the agreement between the parties the interest that has accrued due at the end of the quarter is added on to the principal and becomes the principal and never thereafter ceases to be the principal. It is on this basis that the principal was shown as Rs. 1,39,130-03 at the time of filing the suit. It Was contended that this method of calculating the principal is perfectly legal and we were referred to a Full Bench decision of this Court in Thandamma v. Puthencol Iype (AIR. 1962 Ker. 235) wherein the following passage from the English case in Inland Revenue Commissioner v. Holder (1931-2 K.B., 81) was quoted with approval:

"I am therefore of opinion that having regard to the method in which, with the concurrence of the company the account was kept by the Bank, the company must be deemed to have paid each half year the accruing interest by means of an advance made for that purpose by the Bank to the company".

4. Mr. Mohammed, counsel for the appellant-debtor pointed out that in view of the definition of the word "principal" in the Act, the above mentioned decision could have no application here. The word "principal" has been defined in the Act as:

"the amount originally advanced, together with such sum, if any, as has been subsequently advanced, notwithstanding any stipulation to treat any interests as principal and notwithstanding that the debt has been renewed or included in a fresh document, whether by the same debtor or by his heirs, legal representatives or assigns or by any other person acting on his behalf in his interest, and whether in favour of the same creditor or his heirs, legal representatives or assigns or of any other person acting on his behalf or in his interest"!

It might be noted that in AIR. 1962 Ker. 235 (cited supra) itself it is pointed out in para 7 of the judgment:

"We may, in passing refer to the definition of the term 'principal' in the Kerala Agriculturist Debt Relief Act 1958, wherein it is specifically provided that the 'principal' means the amount originally advanced together with sum, if any. as has been subsequently