The excluded debt under the Kerala Agriculturists Debt Relief Act, 1958 is not entitled to the benefits of sub-section (2) of S.4. The exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.

Headnote:
Kerala Agriculturists Debt Relief Act, 1958 - Extent of benefit to respondent - S.2(c)(xi), S.4(2), S.4(3) - The Act was passed to give relief to indebted agriculturists. The expression 'agriculturist' is defined in S.2(a) of the Act. The Act defines the expression 'debt' in S.2(c) and excludes certain types of debts, including debts exceeding one thousand five hundred rupees borrowed under a single transaction and due before the commencement of the Act to any banking company as defined in the Banking Companies Act, 1949. The proviso to S.2(c)(xi) entitles an agriculturist debtor to repay such debt in eight equal half-yearly instalments as provided in sub-section (3) of S.4. The Act deals with three distinct categories of debts due from an agriculturist to a banking company. The only benefit conferred on the debtor in respect of debts falling within the excluded category is the entitlement to repay the debt in eight equal half-yearly instalments as provided in sub-section (3) of S.4. The court interpreted the provisions of the Act and concluded that the excluded debt is not entitled to the benefits of sub-section (2) of S.4. The court also held that the exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.
Fact of the Case:

The case involves the extent of benefit to which the respondent is entitled under the Kerala Agriculturists Debt Relief Act, 1958. The Act was passed to provide relief to indebted agriculturists. The respondent falls within the ambit of the definition of 'agriculturist' as per S.2(a) of the Act. The Act defines the expression 'debt' in S.2(c) and excludes certain types of debts, including debts exceeding one thousand five hundred rupees borrowed under a single transaction and due before the commencement of the Act to any banking company as defined in the Banking Companies Act, 1949.
Finding of the Court:

The court analyzed the provisions of the Act, including S.2(c)(xi), S.4(2), and S.4(3), and concluded that the excluded debt is not entitled to the benefits of sub-section (2) of S.4. The court also held that the exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.
Issues: The main controversy in the case relates to the extent of the benefit to which the respondent is entitled under the Kerala Agriculturists Debt Relief Act, 1958. The court analyzed the provisions of the Act, including S.2(c)(xi), S.4(2), and S.4(3), to determine the entitlement of the respondent under the Act.
Ratio Decidendi: The court interpreted the provisions of the Act and concluded that the excluded debt is not entitled to the benefits of sub-section (2) of S.4. The court also held that the exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.
Final Decision: The court held that the claim made by the Liquidator is justified, and ordered the payment of the amount claimed. The excluded debt is not entitled to the benefits of sub-section (2) of S.4. The court also held that the exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.

Judgment :-

1. The main controversy in this case relates to the extent of the benefit to which the respondent is entitled under the Kerala Agriculturists Debt Relief Act, 1958. The provisions of the Act to which our attention has been drawn are clause (c) (xi) of S.2, sub-sections (2) and (3) of S.4, and sub-section (1) of S.S.

2. The Act was passed in order to give relief to indebted agriculturists. The expression "agriculturist" is defined in S.2 (a) of the Act. It is not disputed that the respondent comes within the ambit of that definition.

3. S.2 (c) of the Act defines the expression "debt". The definition makes it clear that certain types of debts are not included within the ambit of that expression. One type of debt that is not included is specified in S.2 (c) (xi). That provision including its proviso reads as follows:

"any debt exceeding one thousand five hundred rupees borrowed under a single transaction and due before the commencement of this Act to any banking company as defined in the Banking Companies Act, 1949:

Provided that in the case of any debt exceeding one thousand five hundred rupees borrowed under a single transaction and due before the commencement of this Act to any banking company as defined in the Banking Companies Act, 1949, any agriculturist debtor shall be entitled to repay such debt in eight equal half-yearly instalments as provided in sub-section (3) of S.4, but the provisions of S.5 shall not apply to such debt."

4. It is common ground that the debt with which we are concerned is a debt exceeding one thousand five hundred rupees borrowed under a single transaction and due before the commencement of the Act to a banking company as defined in the Banking Companies Act, 1949. The proviso, therefore, is attracted to the case.

5. The debts due from an agriculturist to a banking company as defined in the Banking Companies Act, 1949, fall into three distinct categories as far as the provisions of the Act are concerned:

(1) Any debt not exceeding Rs. 1500/-,

(2) Any debt exceeding Rs. 1500/- borrowed under more than one transaction, and

(3) Any debt exceeding Rs. 1500/- borrowed under a single transaction. The first two of the three categories constitute debts as defined in the Act. The third does not,

6. The only provision in the Act which deals with the third category is the proviso to S.2 (c) (xi). That proviso makes it clear that the sole benefit conferred on the debtor in respect of debts falling within that category is that he shall be entitled to repay his debt "in eight equal half-yearly instalments as provided in sub-section (3) of S.4". The question for determination is: What exactly is meant by the words "as provided in sub-section (3) of S.4".

7. Sub-section (3) of S.4 reads as follows:

"The first instalment of any debt payable under sub-section (2) shall be paid before the expiry of a period of six months from the date of the commencement of this Act and each of the remaining instalments shall be paid on or before the date of expiry of a period of six months from the last day on which the previous instalment was due."

When applying this sub-section to the cases covered by the proviso to S.2 (c) (xi) the words "the first instalment of any debt payable under sub-section (2)" should naturally be read as "the first instalment of any debt payable under the proviso to S.2 (c) (xi)". And when so read sub-section (3) of S.4 will direct as follows:

The first instalment of any debt payable under the proviso to S.2 (c) (xi) shall be paid before the expiry of a period of six months from the date of the commencement of this Act and each of the remaining instalments shall be paid on or before the date of expiry of a period of six months from the last day on which the previous instalment was due.

8. The words "as provided in sub-section (3) of S.4" in the proviso to S.2 (c) (xi) of the Act refer, so far as we can see, only to the time prescribed in sub-section (3) of S.4 for the payment of the half-yearly instalments.

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1967 Supreme(Ker) 71

The excluded debt under the Kerala Agriculturists Debt Relief Act, 1958 is not entitled to the benefits of sub-section (2) of S.4. The exclusion in S.2(c)(xi) is not discriminatory and is based on a rational classification.

Cases Referred (2)