Debt relief exclusion for banking-company debts requires the debt to remain due to that company at commencement; amalgamated debt was not excluded.

The exclusion for debts due to a banking company under the Kerala Agriculturists' Debt Relief Act applied only if the debt had been incurred from a banking company before the Act commenced and was still due to that company on the commencement date. A debt that had originally belonged to a banking company but had vested by amalgamation in a subsidiary bank before commencement did not satisfy that test, so the exclusion did not operate. The Court read the Act as a beneficent measure and construed the exclusionary clauses narrowly. It also held that this interpretation was consistent with Article 14 because it preserved a rational classification linked to the Act's object. The respondent therefore remained entitled to relief under the Act.

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Issues: Whether a debt originally due to a banking company, but later transferred by amalgamation to a subsidiary bank, was excluded from the Kerala Agriculturists' Debt Relief Act, 11 of 1970 under the provisions relating to debts due to banking companies.

Analysis: The Act was a beneficent measure intended to relieve agriculturists from debt burden, and its exclusionary clauses had to be construed in light of that object. The Court held that the exclusion for debts due to a banking company applies only where the debt was incurred from a banking company before the commencement of the Act and was due to such a company at the commencement of the Act. A debt which had earlier belonged to a banking company but had, by the commencement date, vested in a subsidiary bank through a post-1957 transfer by operation of law, did not satisfy that test. The Court also held that the subsidiary-bank exclusion did not bar reliance on other exclusionary clauses, but clause 2(4)(l) still required the debt to be due to a banking company at the commencement of the Act. This construction was also consistent with Article 14 of the Constitution of India because it preserved a rational classification linked to the object of the Act.

Conclusion: The debt did not fall within the exclusion for debts due to a banking company, and the respondent was entitled to the benefit of the Act.

Final Conclusion: The appeal failed, and the High Court's relief in favour of the respondent was left undisturbed.

Ratio Decidendi: For exclusion under the provision relating to debts due to banking companies, the debt must have been incurred from such a company before the Act commenced and must still be due to a banking company at the commencement of the Act; a post-commencement transfer by operation of law does not attract the exclusion.

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