Judgment :- 1. The only question for determination in this Civil Miscellaneous Appeal is whether a secured creditor can claim the entire amount due to him in view of the Kerala Agriculturists Debt Relief Act, 1958. S.15 of the Act says: "(1) Any agriculturist who is unable to pay his debts under the foregoing provisions of this Act may present an application to the Court within whose jurisdiction he resides or ordinarily carries on business for a full settlement of his debts. (2) Every such application shall be in writing and shall be signed by the applicant and verified in the manner prescribed by the Code of Civil Procedure, 1908, for signing and verifying plaints. (3) Every such application shall contain the following particulars, namely: (a) the place where the applicant resides and the place or places where he holds any property, movable or immovable; (b) the amount and other particulars of all claims against him at the commencement of this Act, together with the name, address and residence of his creditors; (c) the amount and other particulars of all his property including claims due to him together with a specification of the value of such property and the place or places at which any such property is to be found and details of any mortgage, lien or charges thereon; (d) a statement that he wants a fair settlement of his debts; (e) a statement that he unconditionally leaves all his assets in the control of the Court; and (f) other particulars if so prescribed by rules. (4) The court for purposes of this section shall be the Court of a Munsiff if the total of the debt does not exceed Rs. 5.000 and in all other cases the court of a Subordinate Judge." 2. S.16 of the Act provides that on receipt of an application under S.15, the court shall pass an order fixing a date for hearing the application, that notice of such order shall be sent by registered post acknowledgment due, and in such other manner, if so prescribed by rules, to all the parties to the proceedings, and that during the pendency of an application under S.15, the court may stay any suit or the execution of any decree against the applicant or his properties. S.17 of the Act provides that the court shall determine the admissibility and the amount of each such claim and shall for such purpose take all steps necessary for the determination of any question raised in the case, and that the procedure prescribed in the Insolvency Act, 1955, shall mutatis mutandis be applicable to such proceedings. Then follows S.18 which reads as follows: "(1) The court shall then settle the liabilities of the debtor in the manner mentioned hereunder namely: (a) one-fourth of the entire assets not exceeding Rs. 6500/- in value shall be allotted and given over to the debtor subject only to such liabilities by way of public revenues due on land as defined in the Revenue Recovery Act for the time being in force or any tax, cess, fee, rent, jenmikaram or such other dues chargeable thereon by virtue of any enactment for the time being in force: Provided that in such allotment the homestead in which the debtor lives shall, on his application be allotted to his share; (b) after payment of all liabilities by way of public revenue due on land as defined in the Revenue Recovery Act for the time being in force or any tax, cess, fee, rent, jenmikaram or such other dues chargeable by virtue of any enactment for the time being in force, all the remaining assets shall be distributed and made over to the creditors: Provided that secured creditors shall in the order of mutual priority, be paid in preference to unsecured creditors, and after payment of all debts due to the Government or to any local authority, the balance of the assets shall be distributed amongst unsecured creditors in proportion to their debts. (2) (a) Notwithstanding anything contained in sub-section (1), where the value of the homestead allotted under clause (a) of that sub-section exceeds one-fourth of the entire assets of the debtor, or Rs. 6,500 (i) the amount of such excess, or, where the value of the homestead exceeds both one-fourth of the entire assets and Rs. 6,500/- the excess of the value of the homestead over (A) one-fourth of the entire assets, or (B) Rs. 6,500 (i) the amount of such excess, or, where the value of the homestead exceeds both one-fourth of the entire assets and Rs. 6,500/- the excess of the value of the homestead over (A) one-fourth of the entire assets, or (B) Rs. 6,500/-, whichever is smaller, shall be deposited by the debtor in court in fifteen half-yearly instalments together with interest accrued due on the amount outstanding after payment of each instalment at the rate of 5 per cent per annum for distribution to the creditors in the manner specified in clause (b) of the said sub-section; (ii) for the amount of the excess to be deposited by the debtor under sub-clause (i), there shall be a first charge on the homestead subject only to the charge for public revenue due on land as defined in the Revenue Recovery Act for the time being in force or any tax, cess, fee or such other dues chargeable by virtue of any enactment for the time being in force in respect of the land on which the homestead is situated. (b) The first instalment of such excess amount shall be payable before the expiry of a period of six months from the date of allotment of the homestead." 3. The question for determination is whether these provisions preclude a secured creditor from recovering his entire debt or in other words, whether there is a diminution not merely of the extent of the security but also of the quantum of the liability. The order under appeal has held, on the basis of the decision in State Bank of Travancore Ltd. v. Ayyappan Pillai 1963 KLJ 207, that a secured creditor cannot recover more than three-fourths of his debt even though the balance of his security is sufficient for the realisation of the whole of his debt. 4. In the order of the High Court which forms the foundation .for the order under appeal Raghavan J., said: "In a petition under S.15 of Act XXXI of 1958 a fourth of the estate was given to the debtor and the balance was distributed among two secured creditors, the petitioner and the respondent. The respondent bad a prior secured debt of Rs. 3000/-and the petitioner had another secured debt of over Rs. 3,000/-, which was subsequent to the debt of the respondent. The respondent bad a prior secured debt of Rs. 3000/-and the petitioner had another secured debt of over Rs. 3,000/-, which was subsequent to the debt of the respondent. The trial court in distributing the estate reduced the principal amount due to the respondent by a fourth and allowed him only Rs. 2.250/-. The rest of the estate, which came to very much less than three-fourths of the petitioner's principal, was given to the petitioner. In appeal, the learned District Judge of Kottayam reversed that decision and granted Rs. 3,000/- to the respondent, that is the respondent's entire principal, and the petitioner was only given the balance, which came to only four, or five hundred. A Full Bench decision of the Travancore High Court in Padmanabha Pillai Padmanabha Pillai v. Ouseph Chacko (33 TLJ. 787) was cited before the learned District Judge. That case arose under a similar provision in the Travancore Debt Relief Acts (II and HI of 1116) and their Lordships of the Full Bench held that the secured debts should also be reduced in the same proportion as the amount given to the debtor bore to the value of the entire estate. Krishnaswami Iyer C. J., observed at p. 791 of the reports: "Whatever share the amount paid to the debtor represents in its relation to the value of the entire assets, to the extent of that share, therefore, the securities of the secured creditors would get diminished and even so, the fund available for distribution to the simple creditors'. This is the only equitable way of distributing the assets. What Act XXXI of 1958 contemplates is a reduction in the entire estate to the extent of the amount given to the debtor, so that that reduction affects all the secured creditors as well. There is no point in claiming that an earlier secured creditor must get his entire debt without any reduction and the others should go without any payment at all, because the amount given to the debtor is not from any particular item or portion of the estate but from the entire estate, thus reducing the security of all the secured creditors to that extent in proportion. The Full Bench decision of the Travancore High Court lays down a very just and equitable rule and I am not able to understand why this failed to appeal to the learned District Judge. The Full Bench decision of the Travancore High Court lays down a very just and equitable rule and I am not able to understand why this failed to appeal to the learned District Judge. The Civil Revision Petition is therefore allowed, the order of the learned District Judge is set aside and that of the learned Subordinate Judge is restored. The respondent will pay the costs of the petitioner in this court and in the lower appellate court." 5. Apparently there has been a misunderstanding of what has been stated by Krishnaswami Iyer C. J. The learned Chief Justice has not stated in the passage extracted or in any other portion of his judgment that there will be a distribution of the debt due to a secured creditor. All that he has said is that there will be a diminution of the security of the secured creditor, quite a different thing altogether. 6. S.10 of the Travancore Debt Relief Act, 1115 (Act II of 1116), as amended by the Travancore Debt Relief (Amendment) Act, 1116 (Act III of 1116), was in the following terms: "The Court shall then settle the liabilities of the debtor in the manner mentioned hereunder, namely: (a) One-fourth of the entire assets not exceeding Rs. 6. S.10 of the Travancore Debt Relief Act, 1115 (Act II of 1116), as amended by the Travancore Debt Relief (Amendment) Act, 1116 (Act III of 1116), was in the following terms: "The Court shall then settle the liabilities of the debtor in the manner mentioned hereunder, namely: (a) One-fourth of the entire assets not exceeding Rs. 3,000 in value shall be allotted to and given over to the debtor subject only to such liabilities by way of public revenue due on land as defined in the Revenue Recovery Act (Act 1 of 1068) or any tax, cess, fee, rent, jenmikaram or such other dues chargeable thereon by virtue of any enactment for the time being in force: Provided that in such allotment the homestead in which the debtor lives shall wherever possible be allotted to his share; (b) after payment of all liabilities by way of public revenue due on land as defined in the Revenue Recovery Act (Act I of 1068) or any tax, cess, fee, rent, jenmikaram or such other dues chargeable by virtue of any enactment for the time being in force, all the remaining assets shall be distributed and made over to the creditors: Provided that secured creditors shall in the order of mutual priority be paid in preference to unsecured creditors, and after payment of all debts due to Our Government or to any legal authority, the balance of the assets shall be distributed amongst unsecured creditors in proportion to their debts." 7. What exactly was stated by Krishnaswami Iyer, C. J. will be absolutely clear from a fuller extract from his judgment. The learned Chief Justice said: 'S. 19, Clause (a) speaks of one-fourth of the entire assets. As a proceeding under S.16 contemplates a full settlement of all the debts of a debtor, secured creditors are brought within the scope of this administration and their securities would seem to be liable to be realised as S.19 directs the payment of the secured creditors in the order of their mutual priority. The words in S.19 clause (a) 'one fourth of the entire assets' must therefore mean one fourth of the entire property belonging to the debtor including properties mortgaged or charged. S.19, Clause (a) makes a reservation in favour of public dues chargeable on the assets by virtue of any enactment for the time being in force. The words in S.19 clause (a) 'one fourth of the entire assets' must therefore mean one fourth of the entire property belonging to the debtor including properties mortgaged or charged. S.19, Clause (a) makes a reservation in favour of public dues chargeable on the assets by virtue of any enactment for the time being in force. This would go to show that after the realisation of the assets, the first payment out of the assets ought to be in favour of the public dues which have been charged in favour of the Government. In so paying the public dues, the amounts paid in respect of such item of assets must be noted so as to ascertain the net value of each item of asset after the payment of the public charges. The next item of disbursement contemplated by S.19 (a) is the payment or delivery of one-fourth of the entire assets, not exceeding Rs. 3.000 to the debtor. Where the one-fourth of the entire assets left after paying the public charges exceeds Rs. 3000/- the debtor will be paid only Rs. 3000/- which will necessarily be a share less than a fourth. Whatever proportion of the assets is disturbed under this clause to the debtor, the incidents of that disbursement must fall equitably on all parts of the estate of the debtor. For our present purpose the assets of the debtor may be divided into two parts, viz., (i) that which comprises the securities created in favour of the secured creditors; (ii) the balance left available for distribution to the unsecured creditors. Whatever share the amount paid to the debtor represents in its relation to the value of the entire assets, to the extent of that share, therefore, the securities of the secured creditors would get diminished and even so, the fund available for distribution to the simple creditors. The next step in the course of administration after the above reduction would be the payment of the secured creditors in the order of their mutual priority. The assets realised from the items of security after the payment of the public charges charged on the respective items will have to be taken into account and the secured creditors will be paid in the order of priority, such priority being necessarily settled under the terms of the general law of the land. The assets realised from the items of security after the payment of the public charges charged on the respective items will have to be taken into account and the secured creditors will be paid in the order of priority, such priority being necessarily settled under the terms of the general law of the land. It may be that the realisations from the secured items after payment of the public charges are not sufficient to meet the secured liabilities and the secured creditor may be obliged, if otherwise entitled under the jaw, to fall in as a simple money creditor for the deficit and claim his proportionate share out of the residue. It may also be that the realisations of the secured items after payment of the public charges thereon are more than sufficient to meet the secured debts. The surplus so arising would necessarily go pro tanto to swell the fund available for distribution pro rata to the simple money creditors." 8. It is common ground that Nokes J., does not deal with this matter. There is a passage, however, in the concurring judgment of Abraham J. which reads as follows: "I agree that in so far as the security of the creditors has been reduced by one-fourth (or less in cases) by the allotment in favour of the debtor, the secured creditors can rank for priority as amongst themselves in the order of time only to the extent of three-fourths (or more in cases) of their debts. For the balance, they necessarily have to fall back into the rank of unsecured creditors." The passage is not too clear. If the learned judge was agreeing with the learned Chief Justice, there is nothing in the judgment of the latter which will justify the statement. If the learned judge was disagreeing with the learned Chief Justice, all that we can say is that we are not in agreement with him. 9. If the learned judge was agreeing with the learned Chief Justice, there is nothing in the judgment of the latter which will justify the statement. If the learned judge was disagreeing with the learned Chief Justice, all that we can say is that we are not in agreement with him. 9. In the light of what is stated above we must hold that there is no diminution of the debt due to a secured creditor under the provisions of the Kerala Agriculturists Debt Relief Act, 1958, that the diminution is only as regards his security, that if a secured cred for can realise the whole of his debt from the diminished security, he is entitled to do so, that the decision in State Bank of Travancore Ltd. v. Ayyappan Pillai, 1963 KLJ. 207, does not lay down the correct law, that the order under appeal based on that decision cannot be sustained, and that this Civil Miscellaneous Appeal should be allowed. We do so; but in the circumstances of the case without any order as to costs.