TaxTMI 
TaxTMI 
1964 (8) TMI 97
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....te the contentions of the parties. The plaintiffs who are the appellants before us and the fourth defendant constituted a Hindu joint family if which the first plaintiff was the manager till the year 1944 when the fourth defendant separated from the rest and the year remaining members continued to remain joint. On September 14, 1938 the first defendant as manager of the joint family consisting of himself, the second and the third defendants executed a promissory note in favour of the first plaintiffs as manager of the joint family consisting of the plaintiffs and the fourth defendant for a sum of Rs. 9,620-2-9 and agreed to pay interest at the rate of 9 and 3/8% per annum. This amount was found due to the family of the plaintiffs and defendant No. 4 on foot of dealings between that family and the family of defendants 1 to 3 which commenced in the year 1934. 3. In Original Suit No. 84 of 1949 brought by the fourth defendant against the plaintiffs for partition of the family property the first defendant deposited a sum of Rs. 13,576-0-0 on March 17, 1951 alleging that that was the amount due to the family of the plaintiffs and defendant No. 4 from the family of defendants 1 to 3 o....
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....l have to be borne in mind for the purpose of calculating interest. Learned counsel did not dispute the fact that the original indebtedness of the respondents 1 to 3 commenced in the year 1934. But according to him the liability which was sought to be enforced against them was the one arising from the promissory note dated September 14, 1938 and, therefore, the debt must be deemed to have been incurred on the date of the execution of the promissory note in suit. Relying upon certain decisions of the High Courts of Madras and Andhra Pradesh he contended that the Act places debts incurred by agriculturists into three classes: (1) those incurred before the 1st of October, 1932; (2) those incurred on or after the 1st of October, 1932 but before the coming into force of the Act and (3) those incurred after the coming into force of the Act. Section 8 applies to the first category of debts, s. 9 to the second category of debts and s. 13 to the third category of debts. Since, the argument proceeds, all these provisions have reference to the date on which a debt is incurred and since a debt can be incurred only once, it would follow that for the purposes of these provisions the date on whic....
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....n of interest. Explanation II : Where the principal was borrowed in cash with an agreement to repay it in kind, the debtor shall, notwithstanding such agreement, be entitled to repay the debt in cash, after deducting the value of all payments made be him in kind, at the rate, if any, stipulated in such agreement, or if there is no such stipulation, at the market rate prevailing at the time of each payment. 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. 8. Section 9 : Debts incurred on or after the 1st October 1932 shall be scaled down in the manner mentioned hereunder, namely :- (1) Interest shall be calculated up to the commencement of this Act at the rate applicable to the debt under the law, custom, contract or decree of Court under which it arises or at five per cent per annum ....
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....nd 13. 12. Where a suit is instituted before a court of law for recovery of a debt from an agriculturist the court, having regard to the document on foot of which the creditor has instituted a suit was executed, rinds that that document was executed before October J, 1932 it will have to proceed to scale down the debt as provided in section 8. If it finds that the debt was incurred after October 1, 1932 it will have to apply the provisions of s. 9 of the Act. It is these two broad categories into which debts have been divided under the Act. Hut, Mr. Bhimasankaram argued, there is also a third category and that is where a debt is incurred subsequent to the commencement of the Act. In one sense he is right because s. 13 also provides for the scaling down of interest due on a debt incurred after the commencement of the Ac!. Bui it has to be borne in mind that a debt incurred after the commencement of the Act will not cease to be a debt incurred after October 1. 1932. It is common place that every provision of a statute has to be given full effect and wherever possible the court should not place that construction upon a provision which would tend to make it redundant or to overlap a....
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....s appears to be the true meaning of the proviso, though according to Mr. Bhimasankaram it deals with a debt originally incurred prior to October 1, 1932. In support of the contention Mr. Bhimasankaram relies upon the concluding portions of the provision which read thus: "........ and if such debt had been contracted prior to the 1st October 1932, shall be dealt with under the provisions of section 8. " It is sufficient to say that the use of file conjunction 'and' clearly shows that the proviso applies as much to debts contracted prior to October 1st 1932 as to debts contracted after October 1, 1932 even though they may have been incurred after the commencement of the Act. If indeed it was the intention of the legislature to limit the application of the proviso in the manner suggested by Mr. Bhimasankaram it would have been easy for the legislature to say "provided that any debt or any nan of a debt which is found to be the renewal of a debt contracted prior to 1st October, 1932" instead of using the expressio - "prior debt" in 'the act of the proviso and then in the concluding notion say "if such debt has been contracted prior to 1st October, 1932". Then Mr. Bhimasanka....
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....espect to debts first incurred prior to October 1. 1932 and this would be the position what-ever be the date of renewal of such debts. This would be the consequence of the excess terms of the proviso to sub-s. (1) of s. 9 which makes the provisions of s. 8 applicable to the contracted prior to October 1, 1932 but renewed after October 1, 1932 but not to debts incurred subsequent to that date. 14. The last contention of Mr. Bhimasankaram is that there is no provision for future interest corresponding to that in sub-s. (1) of s. 13 of the Act and, therefore, in so far as the interest after the commencement of the Act is concerned, s. 13 alone will have to be resorted to. As already stated, Chapter IV divides debts into two broad categories and in so far as debts incurred error it October 1, 1932 are concerned transactions in renewal of older ones have been brought within the purview of s. 8 by adding thereto Explanation III and transactions subsequent to October 1, 1932 within the purview of s. 9 by the proviso to sub-s. (1). Having made these provisions, there was nothing further that the legislature need have done in so far as transactions in renewal of debts contracted prior to....
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....t of the Act but pointed out that that section would not apply to a debt which was incurred for the first time after March 22, 1938 and therefore s. 9 would not be applicable to an earlier debt renewed after March 22, 1938. The High Court then observed : "It seems to us that, having regard to the scheme of the Act, if it had been the intention of the Legislature to introduce the theory of renewals into the scaling down operations in respect of debts incurred after the commencement of the Act, some specific provisions would have been made in this behalf. We are of opinion that all dots incurred after the common man of the Act, whether they be in discharge of prior debts or not, will fall only under section 13. " 16. The answer to the view of the High Court would be that in the first place every provision in the statute must be given effect to unless by doing so any conflict with any other provision of the Act would arise. In the second place we cannot ignore the object of the legislature in enacting this law which was to grant relief to the agriculturists and that any beneficial measure of this kind should, as far as permissible, be interpreted in such a way as to carry ....
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....under s. 13 a debtor cannot trace back his debt to the original debt which itself was incurred after the Act came into force. In this connection they relied on Thiruvengadatha Ayyangar's case I.L.R. 1942 Mad. 57 as well as on the decision in Krishanayya v. Venkata Subbarayudu [1952] 1 M.L.J. 638. In the latter case it was held : "It is well settled that a debt incurred after the commencement of Madras Act 4 of 1938, cannot be scaled down except in accordance with section 13 of that Act." The words 'a debt incurred' were meant to include a transaction in renewal of a debt actually contracted prior to the commencement of the Act. This is, therefore, a statement which supports the appellants but in point of fact the learned Judges were not concerned with a pre-1932 debt and so they did not have to decide the kind of point which arises in the case before us. While we agree that s. 13 by itself does not enable a debtor to trace back the debt to the original debt a further question can arise whether upon the facts the provisions of s. 9 are attracted to a debt incurred after the commencement of the Act (in the sense that the last transaction pertaining to it was subsequent to....
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....'all interest due on any debt'. The word 'interest' is qualified by two words 'all' and 'due'. If interest outstanding alone is scaled down the emphatic word 'all' becomes otiose. If that was the intention, the words 'interest outstanding' would serve the purpose as well. The word 'all', therefore, cannot be ignored and must be given a meaning. It indicates that the entire interest, which a debt earned, is scaled down." 23. The next decision referred to is that in Mansoor v. Sankarapandia I.L.R. [1959] Mad. 97. That was a decision of the Full Bench of the High Court and the points which arose for consideration and the decision of the Court are correctly summarised in the following head note : "Section 13 of the Madras Agriculturists' Relief Act (IV of 1938) deals with debts incurred after the Act. Under that section there is no provision for any automatic discharge of interest stipulated at a rate higher than that prescribed therein. Such excess interest is only made irrecoverable if the creditor sought to enforce it in a court of law. There being neither a prohibition against a stipulation for payment nor an a....