Applicability of the Act to debts incurred after coming into force of the Act.

This second appeal raises a question in regard to the applicability of section 9 of the Madras Agriculturists’ Relief Act (hereinafter referred to as the Act) to debts incurred after the Act came into force.

The facts are simple and are not in dispute. The defendant executed a promissory note Ex. P-1, dated 5th January, 1943, in favour of the plaintiff for a sum of Rs. 1,024-6-0. The prior promissory notes, which culminated in Ex. P-1, are as follows:

Ex. P-2 dated 7-1-1940.

Ex. P-3 dated 9-1-1937.

Ex. P-4 dated 11-1-1934.

The consideration for the earliest promissory note was Rs. 500. It will be seen from the aforesaid dates that the original debt was contracted after 1st October, 1932, and that Exs. P-1 and P-2 were executed subsequent to the Act, i.e., 22nd March, 1938. The plaintiff filed O. S. No. 22 of 1946 on the file of the Court of the District Munsiff, Ongole, for recovery of a sum of Rs. 1,024-6-0 due under the promissory note Ex. P-1 with subsequent interest at 9 per cent, per annum. The defendant pleaded that he is an agriculturist and that the debt should be scaled down under the Act. He also contended that though Exs. P-1 and P-2 were executed subsequent to the Act, they were so executed under an arrangement between the parties that at the time of the settlement of the suit, the debt should be ascertained according to the Act and that the renewals were made only for the purpose of acknowledgment of the debt. The learned District Munsiff held that the agreement pleaded was not true but that the promissory notes executed subsequent to the Act were not supported by consideration. He found, after giving credit to the amounts paid, that the plaintiff would be entitled to a decree for sum of Rs. 333 and subsequent interest from 9th September, 1944, at 61/4 per cent. per annum. In appeal, the learned Subordinate Judge held that the plaintiff would be entitled to a decree on the basis of Ex. P-1 and, after giving credit to the amounts paid, he gave a decree for a sum of Rs. 656-13-8 with subsequent interest at the rate of 6¼per cent. per annum. The defendant preferred the above second appeal.

The learned counsel for the appellant contended that, in view of the provisions introduced by amending Act XXIII of 1948, the debt is liable to be scaled down under the provisions of the Act. To appreciate the contention of the learned counsel, the relevant provisions of the Act, as amended by Act XXIII of 1948, may be read:

"8. Debts incurred before 1st October, 1932, shall be scaled down in the manner mentioned hereunder, namely:

(1) All interest outstanding on the 1st October, 1937, in favour of any creditor of an agriculturist whether the same be payable under law, custom or contract or under a decree of court and whether the debt or other obligation has ripened into a decree or not, shall be deemed to be discharged, and only the principal or such portion thereof as may be outstanding shall be deemed to be the amount repayable by the agriculturist on that date."

"Explanation III:Where a debt has been renewed or included in a fresh document executed before or after the commencement of this Act, whether by the same or a different debtor and whether in favour of the same or a different creditor, the principal originally advanced together with such sums, if any, as have been subsequently advanced as principal shall alone be treated as the principal sum repayable under this section."

This Explanation has been substituted by Amending Act XXIII of 1948 for the Explanation, which read as follows:-

"Where a debt has been renewed or included in a fresh document in favour of the same creditor, the principal originally advanced by the creditor together with such sums, if any, as have been subsequently advanced as principal shall alone be treated as the principal sum repayable by the agriculturist under this section."

"9. (1) Debts incurred on or after the 1st October, 1932, shall be scaled down in the manner mentioned hereunder, namely:

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