C. Balasundaram vs The Indian Overseas Bank

N.S. Ramaswami, J.—This appeal is against the dismissal of an application u/s 20 of Act IV of 1938.

The appellant had borrowed moneys from the Indian Overseas Bank, who is the respondent in this appeal, and he wanted to take advantage of

the amendment brought in by Act VIII of 1973 to Act IV of 1938. As the debt had been incurred prior to 1st March, 1972, the appellant wants

the decree, which has been passed in favour of Indian Overseas Bank, to be scaled down. Before applying for such scaling down, he applied u/s

20 of the Act to stay the execution proceedings. The Court below has held that the appellant is not so entitled to have the execution stayed, as the

provisions of the Act are not applicable to debts due to the Bank. The correctness of this view is questioned in this appeal.

The contention of the Learned Counsel for the appellant is that only under Act VIII of 1973, a debt due to a banking company has been

exempted from the provisions of Act IV of 1938, that such exemption would be applicable only to debts incurred after the coming into force of the

amending Act, viz., Act VIII of 1973, and that in the present case, the debt having been incurred very much prior to the coming into force of the

said amending Act, the same is not exempt from the provisions of Act IV of 1938. This contention is wholly untenable. But for the amending Act

VIII of 1973, there is no question of the appellant having any right to apply for scaling down of the debt. As Section 8 of Act IV of 1938 originally

stood, a debt can be scaled down only if the same had been incurred prior to 1st October, 1932. Admittedly, the debt in this case had been

incurred subsequent to that date. If the appellant is to take advantage of the provisions introduced by the amending Act VIII of 1973, he cannot

take one part of the amendment and shut his eyes to the other part of the amendment. While the amending Act amended Section 8 so as to make

the scaling down provision applicable to debts incurred before 1st March, 1972, it also provided that the Act is not applicable to debts due to a

banking company. Section 4 of the parent Act has now been substituted by the amending Act and as per the new section [Clause (h)]; debts due

to a banking company are exempt from the provisions of the Act. The section says that nothing in the Act shall affect debts and liabilities of an

agriculturist falling under the heads mentioned therein. Clause (h) is one of the heads which states that liability to a banking company (apart from a

public company, State Bank of India etc.,) is one such liability which is so exempt. That being so, the appellant cannot be heard to say that he

would take advantage of the provisions contained in the amending Act but, at the same time, he would not be bound by the amended provisions

contained in Section 4 of the Act. I am quite clear that the appellant is not entitled to have the decree debt due to Indian Overseas Bank scaled

down and therefore, he is also not entitled to get an order of stay of execution u/s 20 of the Act. The appeal, is, therefore, dismissed. No costs.