Judgment

CHANDRACHUD, CJI.:- The question which arises in this appeal by special leave is whether a debt owed by the respondent, an agriculturist to the appellant - The State Bank of Travancore - falls Within the purview of the Kerala Agriculturists Debt Relief Act, 11 of 1970. hereinafter called the Act.

2. The respondent had an Overdraft Account with the Erattupetta Branch of the Kottayam Orient Bank Ltd., at the foot of which he owed a sum of over Rs. 3000/- to the Bank. The said Bank which was a Banking Company as defined in the Banking Regulation Act, 1949, was amalgamated with the appellant Bank with effect from June 17, 1961 in pursuance of a scheme of amalgamation prepared by the Reserve Bank of India in exercise of the powers conferred by Section 45 (4) of the Banking Regulation Act and sanctioned by the Central Government under sub-section (7) of Section 45. Upon the amalgamation all assets and liabilities of the Kottayam Orient Bank stood transferred to the appellant Bank. The notification containing the scheme of amalgamation was published in the Gazette of India Extraordinary dated May 16. 1961.

3. The appellant filed a suit (O. S. No. 28 of 1963) in the Sub-Court. Meenachil against the respondent for recovery of the amount due from him in the overdraft account with the Kottayam Orient Bank, the right to recover which had come to be vested in the appellant as a result of the aforesaid scheme of amalgamation. That suit was decreed in favour of the appellant but when it took out execution proceedings in the Sub-Court. Kottayam, the respondent filed a petition under Section 8 of the Act seeking amendment of the decree, in terms of the provisions of the Act. The respondent claimed that he was an agriculturist within the meaning of the Act and was therefore entitled to the benefit of its provisions, including those relating to the scaling down of, debts. The learned Subordinate Judge assumed what was evidently not controverted that the respondent was an agriculturist. But the learned Judge held that the respondent was not entitled to the benefit of the provision regarding scaling down of the debt because the debt, having been once owed by him to the Kottayam Orient Bank Ltd., which was a Banking Company as defined in the Banking Regulation Act. 1949. was outside the purview of Section 5 of the Act which provided for the scaling down of debts owed by agriculturists. According to the learned Judge the respondent was only entitled to the benefit of the proviso to Sec. 2 (4) (1) of the Act under which the amount could be repaid in eight half-yearly instalments. Since the relief which the respondent had asked for was that his debt should be scaled down and since he was held not entitled to that relief his application was dismissed by the learned Judge.

4. The respondent preferred an appeal to the High Court of Kerala the maintainability of which was challenged by the appellant on the ground that no appeal lay against the order passed by the Subordinate Judge on the application filed by the respondent under Section 8 of the Act. The High Court accepted the preliminary objection but granted permission to the respondent to convert the appeal into a civil revision application and dealt with it as such. In view of the general importance of the questions involved in the matter, the revision application was referred by a Division Bench to the Full Bench.

5. It was contended in the High Court on behalf of the appellant Bank that the debt owed to it by the respondent was excluded from the operation of the Act by reason of Section 2 (4) (a) (ii) and Section 2 (4) (1) of the Act. By its judgment dated February 1. 1978 the High Court rejected that contention, allowed the revision application and held that the respondent was entitled to all the relevant benefits of the Act, including the benefit of scaling down of the debt. The Bank questions the correctness of that judgment in this appeal.

6. Section 8 of the Act provides in so far as is mat