SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1928 Supreme(Mad) 259

IN THE HIGH COURT OF MADRAS
Mackay, J.
Chinnaswamy Kavirayer
Versus
Periathambi Butler
Decided On : 14 August, 1928

For a payment to be considered towards interest, the debtor must have the intention that it should be paid towards interest, and there must be some distinct specification or intimation by the debtor as regards the appropriation.

Headnote:

Payment - Small Cause Suit - The court held that a payment credited towards the decree amount, costs, etc. could not be treated as a payment towards interest as such within the meaning of Section 20, Lim. Act. The debtor must have paid the amount with the intention that it should be paid towards interest, and there must be some distinct specification or intimation by the debtor as regards the appropriation.

Fact of the Case:

The petitioner sought to set aside an ex parte order directing a sale in execution made in a Small Cause Suit. The payment credited towards the decree amount was contested as a payment towards interest.

Finding of the Court:

The court set aside the ex parte order and restored the execution petition, allowing the parties to adduce further evidence as to the nature of the payment. No order as to the costs of the petition was made due to the petitioner's failure to appear and object at the proper time.

Issues: The issues revolved around the nature of the payment credited towards the decree amount and whether it could be considered a payment towards interest within the meaning of Section 20, Lim. Act.

Ratio Decidendi: The court held that for a payment to be considered towards interest, the debtor must have paid the amount with the intention that it should be paid towards interest, and there must be some distinct specification or intimation by the debtor as regards the appropriation.

Final Decision: The ex parte order directing a sale in execution was set aside, and the execution petition was restored for further evidence on the nature of the payment.

JUDGMENT

Mackay, J.

1. This is a petition in which it is sought to set aside an order directing a sale in execution made ex parte in a Small Cause Suit. The date of decree was 16th February 1920, of the prior application in execution 3rd February 1923, and of the present application 22nd November 1926. Prima facie it is barred unless a payment of Rs. 50 credited on 15th April 1925, was made towards interest, as such, that is to say, wholly or in part towards interest.

2. The first point taken is that the payment was not certified under Order 21, Rule 2. There is, however, no difficulty as to this, for there is nothing in Order 21, Rule 2, which prescribes a time within which the payment should be certified; a statement made by a decree-holder in his application for execution may be accepted as a certificate: Masilhamani Mudaliar v. Sethuswami Iyer [1917] 41 Mad.

251. In an affidavit in this case the decree-holder averred that this money had been received from the defendant (petitioner) " towards the decree amount, costs, etc." The next question is whether this can be treated as a payment towards interest as such within the meaning of Section 20, Lim. Act. In my opinion, it cannot. Mohammad Abdullah Khan v. Bank Instalment Co., Ltd. [1909] 31 All. 495 is clear authority for holding that the debtor must have paid the amount with the intention that it should be paid towards interest and that there must be something to indicate that intention; mere appropriation by the creditor is not such an indication: of also Hormasji Bezonji v. Hajrat Yarkhan A.I.R. 1926 Bom. 423, where it is laid down that there must be some distinct specification or intimation by the debtor as regards the appropriation. Here there is none; so far as the affidavit discloses, it is a general payment towards the decree amount, costs, etc. It is not a sufficient answer to urge that the decree amount includes principal and interest or that interest to greater amount than Rs. 50 was due and that payment towards interest should be presumed. It is not a case of presumption but of the existence of an indication of special intimation.

3. The point appears to have been considered by the lower Court which apparently held that limitation was saved, for it proceeded to order notice and attachment. The reasons for the conclusions do not appear and prima facie the second application is barred and the order for sale illegal. The ex parte order will be set aside and the execution petition restored, the parties being at liberty to adduce further evidence as to the nature of the payment, if such is found to have been made. As petitioner failed to appear and object at the proper time, there will be no order as to the costs of this petition.

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top