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Issues: Interpretation of Section 10(2)(iii) of Madras Act IV of 1938
Analysis: The main issue in this Civil Revision Petition is the interpretation of Section 10(2)(iii) of Madras Act IV of 1938. The petitioner borrowed a sum of &8377; 1,500 in February 1927 from the respondent upon a mortgage bond. The suit was brought in March 1932 based on this mortgage bond, resulting in a decree in favor of the respondent. The petitioner applied under Section 23 of the Act to set aside the sale, which would not be granted if the interest payable on the liability is not more than 9% per annum, as the respondent is a public company as per the Indian Companies Act. The terms of the bond were complex, with an initial interest rate of 6 1/4% on the borrowed amount, payable monthly. The bond also included provisions for subscriptions credited towards the principal repayment, with additional interest chargeable in case of default. The District Munsif initially held that the petitioner could not benefit from the Act's provisions under Section 10(2)(iii) due to the interpretation that the section only applied to the primary interest rate and not to rates chargeable in case of default. However, the court rejected this narrow interpretation, emphasizing that liability should encompass all obligations under the bond, including those arising from default. The court conducted a detailed examination of the accounts between the parties, revealing that a significant amount had been repaid, leaving a balance of &8377; 807-13-2 to be settled. The court determined that the total repayment amount, including the principal and additional sum, represented an interest rate slightly exceeding 9% per annum. Consequently, the respondent could not argue that Section 10(2)(iii) applied, allowing the petitioner, assuming he is an agriculturist, to claim debt scaling under Section 8 and seek relief under Section 23. As a result, the petition was allowed, and the petitioner's application was remanded to the District Munsif to determine the petitioner's agriculturist status. The respondent was ordered to bear the costs of the petitioner in this matter.
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