LexBULCHAND CHANDIRAM OF BOMBAY versus BANK OF INDIA LTD., FORT, BOMBAY
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866 BULCHAND CHANDmAM OF BOMBAY A v. BANK OF INDIA LTD., FORT, BOMBAY April 19, 1968 [J. C, SHAH, V. RAMASWAMI and G. K. MITTER, JJ.J S The Displaced Persons (Debt Adjustment) Act 70 of 1951, ss, 2(6), 17, 22, 29-'Renewal' of debt meaning of-lnSurance policies whether governed by s. 11-Apportionment of liabilities between joint debtors under s. 22-Award of interest under s. 29. The appellant was a citizen of Pakistan and had come u; India on June 6, 1950 on a temporary permit. During his absence the Pakistan Government declared him to be an evacuee. In December 1950 he was granted a Domicile Certificate and since then he continued to reside in Bombay. On May 4, 1945 the appellant had opened an account with tho Bank of India (Hyderabad, Sind Branch) called the Cash Credit Account. Tho amount was secured by an assignment of life insurance policies on tho appellant's life and mortgage of certain immovable proper- ties. In July 1949 the appellant took another loan of Rs. 1,25,()()() from tho· Hyderabad Bank on the security of certain properties and the per- sonal security of himself and his wife. On .July 22, 1952 the appellant made an application under s. 5 of the Displaced Persons (Debt Adjust-· ment) Act, 1951 for adjustment elf his debts against several creditors, but pressed it only against tho Bank. Against the trial court's judgment. both parties appealed to the High Court. The High· Court's judgment was challenged by the appellant iri this Court. It was contended on behalf of the appellant, inter alia : (i) That no interest should have been allowed to the Bank from August 15, 1947 in view of the provisions of s. 29 of .the Act; (ii) That the liability on the Cash Credit Account and on the Loan Account was not the sole responsibility of the appellant but was a joint liability and the High Court should have apportioned the joint debt under s. 22, without· construing that section with the aid of s. 43 rlf the Indian Contract Ac~ (iii) That the insurance policies did not fall under s. 17 of the Act and the appellant was entitled to a refund of the amount recovered from them; and (iv) That the High .Court erred in interpreting the word 'renewal' occurring in the definition of s. 2(6). HELD: (i) Proviso (b) to s. 29(1) of the Act confers a. dracretioo oo !00 Tribunal to allow interest not exceeding 4 per cent pe!r annum for the period from August IS, 1947 up to December 10, 1951, the date on which the Act came into force in Bombay after taking into account the paying capacity of the debtor as defined in s. 32. In the present case the High Court had on the statement of the appellant himself found his pay.. ing capacity to be far in excess of the debts due •from him, and it was tlterefore a fit case in which interest at 4 per cent should be allowed to the Bank from August 15, 1947 to December 10, 1951. [876 A-DJ (ii) Even assuming that s. 43 of the contract is not relev'ant for tne construction of s. 22 of the Act the plea of the appellant •for apportion- ment of the debt must be rejected because from his own pleadings it was apparent that the liability both on the Loan Acoount and on the Cash Credit Account was undertaken solely by the appellant. There was no justification for interfering with the finding of the High Court in !Iris respect. [876 E-Hl c D F G H I A B c D E F G H BULCHAND v. BANK OF INDIA (Ramaswami, J.) 8G9 (iii) The insurance policies were 'movable property' as defined in s. 3 of the General Clauses Act. In the present case there was an abso- lllle assignment of the policies in favour of the Bank and the policies were also in its possession. Section 17 of the Act therefore applied and unle"" realisation under the policies was in ex= of the debt due the appellant was not entitled to refund. [877 F-0] (iv) The confirmation or acknowledgement of indebtedness which in- cludes both loan and interest and further advances l/ any, would not fall within the ambit of the expression 'renewal' in the proviso to s. 2(6) of 1he Act. The liability referred to in the proviso is the liabili!}'. solely by Way of renewal and the proviso to the section states that the onginal loan and not the one for which the renewal is made is the debt within the meaning of the section. But the proviso does not apply if the confirma- tion or acknowledgement is not solely by way of re11;ewal on accou~ ~f loan or interest but includes further advance. The
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