On the date of incurring debt the debtor has to prove that he was an agriculturist.

RAMACHANDRA IYER, C.J. :- This appeal which is filed under Cl. 15 Letters Patent against the judgment of Venkatadri, J. has been referred to this Bench on account of the importance of the question involved in it. The question can be stated thus :

"Whether in respect of a debt incurred by an agriculturist after the coming into force of the Madras agriculturists Relief Act, it is necessary before the debtor can be given relief under S. 13 thereof that he should prove that his qualification as an agriculturist subsisted on the date when it is sought to be enforced against him ?"

The facts which have given rise to this reference are these.

The respondent who owned agricultural lands outside the Municipal limits of Karur created two mortgages over them on 19-7-1947 and 17-11-1947 in favour of the appellants assignor and the appellant respectively to secure two sums of Rs. 3000 and Rs. 4000 advanced on that day. The mortgage document stipulated payment on interest at nine per cent per annum on the loans. Apart from the right he had in the mortgaged property, the debtor had no interest in any other agricultural land. On the dates of the mortgages, the respondent, it is conceded, was an agriculturist entitled to the benefit of the Act, as the lands were situate outside municipal limits. But subsequently and before the date of the present action, these lands were Brought within the Karur Municipal limits. It is not disputed that on that account the respondent ceased to be an agriculturist. This was the position on the date of the suit on the two mortgages. Nevertheless, the respondent claimed that he was entitled to a reduction or interest on the loans in accordance with S. 13 of the Agriculturists Relief Act. The learned Subordinate Judge rejected the plea for reduction of interest as in his view, relief under S. 13 would be given only to debtors who were agriculturists on the date of suit. This view has not been accepted on appeal by Venkatadri, J. who held that the only crucial date for the applicability of the Section, was the date of the loan itself.

2. To my mind, the construction of S. 13 does not present much difficulty. The Act, as is well-known, is intended to give relief to indebted agriculturists in respect of interest accrued or accruing on their liabilities. The extent and mode of relief given under it differs according to the date on which the loan had been contracted, there being a broad division between debts incurred prior to and those to be incurred after the Act. The former category is again divided into two (i) those debts incurred prior to 1-10-1932, but outstanding when the Act came into force, and (ii) these debts incurred between 1-10-1932 and 22-3-1938, the date of commencement of the Act and outstanding on the latter date. Sec. 7 which deals with all cases of debts due by agriculturists as on 22-3-1938, decides that all such debts shall be scaled down in accordance with the subsequent provisions of the Act and no further sum shall be recoverable from the debtor, Ss. 8 and 9 are respectively the machinery provisions prescribing the mode and extent of scaling down. The former which governs debts contracted prior to 1-10-1932, statutory wipes out the entire amount of outstanding interest on the debt. The latter Section, that is, S. 9 which governs debts contracted between 1-10-1932 and 22-3-1938 does so only partially, allowing interest to run at 5 per cent per annum where the rate of stipulated interest is higher than that rate. It is unnecessary to refer to the further details of the provisions contained in these Sections regarding specific cases like renewals, application of the rule of damdupet etc. Section 10 provides that in respect of debts scaled down interest at the contract rate or at 6 1/4 per cent per annum, whichever is lower, will run from the date of scaling down that is, 22-3-1938. These provisions do not however apply to the present case; but a reference to them has to be made to deal with