TMI Blog1981 (8) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Extra-ordinary dated May 16, 1961 . 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 lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in pursuance of this section that the respondent applied to the executing Court for amendment of the decree. Section 4(1) of the Act provides that notwithstanding anything contained hl any law or contract or in a decree of any court, but subject to the provisions of sub-section (5), an agriculturist may discharge his debts in the manner specified in sub-sections (2) and (3). Sub-section (2) of section 4 provides that if any debt is repaid in seventeen equal half yearly instalments together with interest at the rates specified in section 5, the whole debt shall be deemed to be discharged. Sub-section (3) specifies the period within which the instalments have to be paid. The respondent claims the benefit of the provision contained in section 4 (1) of the Act. In order to decide whether the respondent is entitled to the relief claimed by him, it would be necessary to consider the provisions of sections 2 (1) and 2 (4) of the Act. The short title of the Act shows that it was passed in order to give relief to indebted agriculturists in the State of Kerala. The State Legislature felt the necessity of passing the Act because, the Kerala Agriculturists' Debt Relief Act, 31 of 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in clause (a) (ii) and clause (1) of section 2 (4), which are excluded from the operation of clause 2 (4). We will first consider the implications of the exclusion provided for in sub-clause (ii) of clause (a) of section 2 (4). Under the aforesaid sub-clause, any sum payable to a subsidiary bank within the meaning of section 2 (k) of the State Bank of India (Subsidiary Banks) Act, 1959, is excluded from the definition of debt . Section 2 (k) of the Act of 1959 defines a subsidiary bank to mean any new bank, including the Hyderabad Bank and the Saurashtra Bank. The expression new bank is defined in section 2 (f) of the Act of 1959 to mean any of the banks constituted under section 3. Section 3 provides that with effect from such date, as the Central Government may specify, there shall be constituted the new banks specified in the section. Clause (f) of section 3 mentions the State Bank of Travancore amongst the new banks which may be constituted under section 3. It is thus clear that the appellant Bank, namely, the State Bank of Travancore, is a subsidiary bank as contemplated by sub- clause (ii) of clause (a) of section 2 (4) of the Act. If the matter were to res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed under a single transaction and due before the commencement of this Act to any banking company, any agriculturist debtor shall be entitled to repay such debt in eight equal half- yearly instalments as provided in sub-section (3) of section 4, but the provisions of section 5 shall not apply to such debt. The question for consideration is whether the amount which the respondent is liable to pay under the decree was due before the commencement of the Act to any Banking Company . Turning first to the question whether the appellant Bank is a banking company, the learned Subordinate Judge assumed that it is, but no attempt was made to sustain that finding in the High Court. Shri Abdul Khader, who appears on behalf of the appellant conceded before us that it is not a banking company. The concession is rightly made, since according to section 2(2) of the Act, 'Banking Company' means a banking company as defined in the Banking Regulation Act, 1949. Section S(c) of the Act of 1949 defines a banking company to mean any Company which transacts the business of banking in India (subject to the provision contained in the Explanation to the section). Thus, in order that a bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commencement of the Act: what matters is to whom the debt was owed before the commencement of the Act. The learned Attorney General is apparently justified in making this submission which rests on the plain language of clause (1) of section 2(4), the plain, grammatical meaning of the words of the statute being generally a safe guide to their interpretation. But having considered the submission in its diverse implications, we find ourselves unable to accept it. In order to judge the validity of the submission made by the Attorney General, one must of necessity have regard to the object and purpose of the Act. The object of the Act is to relieve agricultural indebtedness. In order to achieve that object, the legislature conferred certain benefits on agricultural debtors but, while doing so, it excluded a class of debts from the operation of the Act, namely, debts of the description mentioned in clauses (a) to (n) of section 2(4). One class of debts taken out from the operation of the Act is debts owed to banking companies, as specified in clause (1). The reason for this exception is obvious. It is notorious that money lenders exploit needy agriculturists and impose upon them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interpreted so plainly, will frustrate rather than further the object of the Act. Relief to agricultural debtors, who have suffered the oppression of private moneylenders, has to be the guiding star which must illumine and inform the interpretation of the beneficent provisions of the Act. When clause (1) speaks of a debt due before the commencement of the Act to a banking company, it does undoubtedly mean what it says, namely, that the debt must have been due to a banking company before the commencement of the Act. But it means something more: that the debt must also be due to a banking company at the commencement of the Act. We quite see that we are reading into the clause the word at which is not there because, whereas it speaks of a debt due before the commencement of the Act, we are reading the clause as relating to a debt which was due at and before the commencement of the Act to any banking company. We would have normally hesitated to fashion the clause by so restructuring it but we see no escape from that course, since that is the only rational manner by which we can give meaning and content to it, so as to further the object of the Act. There is one more aspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the language used in the two provisionals on which the learned Attorney General relies is suited to the particular subject matter with which those provisions deal and is apposite to the context in which that language is used. We have given to the provision of clause (1) an interpretation which, while giving effect to the intention of the legislature in the light of the object of the Act, brings out the true meaning of the provision contained in that clause. The literal construction will create an anomalous situation and lead to absurdidities and injustice. That construction has therefore to be avoided. Any other interpretation of clause (1) will make it vulnerable to a constitutional challenge on the ground of infraction of the guarantee of equality. The object of the Act being to confer certain benefits on agricultural debtors, the legislature would be under an obligation, while excepting a certain category of debts from the operation of the Act, to make a classification which will answer the test of article 14. Debts incurred from banking companies and due to such companies at the commencement of the Act would fall into a separate and distinct class, the classification bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this conclusion is that the right of the appellant to recover the debt arose by reason of a transfer effected by operation of law subsequent to July 1, 1957. We have already dealt with that aspect of the matter. But we are not inclined to accept the submission that if a particular case falls under a specific clause of section 2 (4) which is found to be inapplicable, the creditor is debarred from claiming the benefit of any of the other clauses (a) to (n). The object of the exclusionary clauses is to take category of debts from out of the operation of the Act and there is no reason why, if a specific clause is inapplicable, the creditor cannot seek the benefit of the other clauses. The exclusionary clauses, together, are certainly exhaustive of the categories of excepted debts but to make those clauses mutually exclusive will be to impair unduly the efficacy of the very object of taking away a certain class of debts from the operation of the Act. We are not therefore, inclined to accept the submission made by the learned counsel that section 2 (4) (a) (ii) is exhaustive of all circumstances in which a subsidiary bank can claim the benefit of the exceptions to section 2 (4). ..... 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