(Delivered by Wadsworth, J.)
This petition arises out of an application under S. 19 of Madras Act IV of 1938. The applicants, who are the petitioners here, sought to scale down a decree dated 26th September, 1936 passed on a mortgage of 8th November 1920. The mortgage was for a sum of Rs. 5,570, made up by the discharge of four earlier promissory notes the principal of which totalled to Rs. 4,300, with interest thereon and a small fresh advance. Towards this mortgage there were three payments before suit. On 5th April 1923 a sum of Rs. 1,200 was paid and appropriated for interest and on 6th June 1923 a sum of Rs. 400 was paid and of this sum Rs. 211-14-0 were appropriated for interest and the balance for principal. On 4th October 1924 a payment of Rs. 3,367 was made and the endorsement is that it was made towards principal and interest of the debt; that is to say, there was apparently no specific appropriation towards either principal or interest. On the basis of our previous decisions, the decree has clearly to be scaled down in the following way. The principal will be Rs. 4,300, the principal of the original notes renewed in the mortgage. The payments actually appropriated before 1st October 1937 will stand appropriated. The payment made on 4th October 1924 which has not been specifically appropriated will be disregarded in calculating the amount of interest outstanding on 1st October 1937 unless it can be established that there has been a specific appropriation before 1st October 1937, no fresh evidence being admissible. After calculating the amount of interest outstanding on 1st October 1937 and treating it as discharged, the balance of the debt will be scaled down on the basis that the principal remaining bears interest at the rate laid down in S. 12 from 1st October 1937 and the interest on costs will be scaled down with regard to the provision of S. 9; that is to say, interest will run at 5 per cent per annum upto 22nd March 1938 and thereafter at the decree rate of 6 per cent.
The petitioner is entitled to his costs in revision from respondents 1 and 2. The application is remitted to the lower Court for disposal in the light of this judgment.
Petition allowed.
N.R.R