Lingappa Chettiar v. Chinnaswami Naidu — 1954 DIGILAW 171 (MAD)

Govinda Menon, J.-This is an appeal under section 25-A of Madras Art (IV of 1938) against the dismissal of an application by the appellant to scale down the decree debt and determine the amount payable under the decree in case the debt is held not to be completely satisfied. The contesting Respondents in this Court, as was the case before the lower Court, was the 29th respondent, a transferee of the decree. The lower Court found that though it has jurisdiction to entertain the application, since the final decree, which is sought to be scaled down was passed after the Act came into force, the petition should be dismissed. Hence the appeal. O.S. No. 51 of 1937 was a suit by a mortgagee for the realisation of a sum of money due on the mortgage executed by the father of defendants 1 to 3 and 5 for a sum of Rs. 4,000 on 7th February, 1927, in his favour and he figures as the first respondent in this appeal. The suit claim was for Rs. 6,000 due towards principal and interest after giving up a sum of Rs. 1,450. A preliminary decree was passed on 31st August, 1938. The plaintiff preferred A.S. No. 113 of 1939 to this Court which was mainly against the 15th defendant who was also sought to be made liable in addition to those against whom the trial Court had decreed the suit. That appeal was allowed to the extent claimed and in that appeal, in addition to the 15th defendant, all the other defendants were also parties. In the meanwhile a final decree had been passed on 14th August, 1941, but after the disposal of the appeal by this Court a revised final decree was passed on 6th March, 1943. The present appellant, who was the seventh defendant in the suit, was an assignee of certain items of the hypotheca from the mortgagor and was impleaded in the suit as the owner of the equity of redemption of a part of the hypotheca. Though he did not take any steps to invoke the provisions of Madras Act (IV of 1938) during the pendency of the suit and the appeal, he applied under I.A. 550 of 1952 for scaling down the decree by virtue of the benefits conferred by section 19(2) of the Act, introduced into this enactment by Madras Act (XXIII of 1948). Though he did not take any steps to invoke the provisions of Madras Act (IV of 1938) during the pendency of the suit and the appeal, he applied under I.A. 550 of 1952 for scaling down the decree by virtue of the benefits conferred by section 19(2) of the Act, introduced into this enactment by Madras Act (XXIII of 1948). In the lower Court various defences were raised. The first of them was that since the decree of the trial Court had undergone modification by this Court in A.S. No. 113 of 1939, the only Court to which an application for amendment can be made is the High Court and that forum not having been resorted to, the application to the Subordinate Judge was not maintainable. The lower Court found that since the decree in the first instance was passed by that Court, it had jurisdiction to entertain the application. The other point raised was whether the appellant was an “agriculturist” and that contention was also decided in his favour. But on the third contention that the provisions of section 16(iii) of Madras Act (XXIII of 1948) would not enable the appellant to file the application out of which this appeal has been preferred the learned Subordinate Judge dismissed the applicaton. The point for decision is how far the learned Judge is right. Before the addition of sub-section (2) to section 19 of Madras Act (IV of 1938) by Madras Act (XXIII of 1948), the legislative provision for the amendment of decrees for conferring the benefits given by the Act was only section 19(1) as it stands now. That section provided for an application to amend a decree passed before the commencement of that Act, i.e., before 22nd March, 1938, against art agriculturist who was entitled to the benefits of the Act. That section provided for an application to amend a decree passed before the commencement of that Act, i.e., before 22nd March, 1938, against art agriculturist who was entitled to the benefits of the Act. Section 19(1) is in the following terms: “Where, before the commencement of this Act, a Court has passed a decree for the repayment of a debt, it shall, on the application of any judgment-debtor who is an agriculturist or in respect of a Hindu joint family debt, on the application of any member of the family whether or not he is the judgment-debtor or on the application of the decree-holder, apply the provisions of this Act to such decree and shall, notwithstanding anything ‘contained in the Code of Civil Procedure, 1908, amend the decree accordingly or enter satisfaction, as the case may be’”: If a person did not take advantage of the provisions of the Act in a suit which was pending at the time the Act came into force and a decree is passed against him without such a plea having been put forward, then it was held by a Full Bench in Srirama Reddi v. Srirama Reddi1, that such a person cannot apply under section 19 of the Act. In that case though the trial Court had decided the suit before the Act was passed the appeal was pending when the Act came into force and the party not having pleaded the benefits of the Act in the appellate Court, it was held by the Full Bench that he is precluded from making an application for scaling down of the debt after decree was passed. Leach, C.J., in delivering the opinion of the Full Bench stated as follows: "All questions arising in the appeal other than the question of scaling down can be decided and the decree left open until a report has been received from the trial Court, the application for scaling; down being remitted to that Court for enquiry and report. If this procedure is followed the final decree of this Court will state exactly what the judgment-debtor has to pay, bearing in mind all that he is entitled to under the Agriculturists Relief Act. But if the application is not made before the judgment is delivered, it will be too late for a judgment-debtor to raise the question. If this procedure is followed the final decree of this Court will state exactly what the judgment-debtor has to pay, bearing in mind all that he is entitled to under the Agriculturists Relief Act. But if the application is not made before the judgment is delivered, it will be too late for a judgment-debtor to raise the question. The judgment in such circumstances will be the final judgment and the decree must be drawn up in accordance therewith". The result of this decision is that if a decree is passed against a judgment-debtor without applying Madras Act IV of 1938, then he is precluded from applying under section 19 of the Act as it then stood. It was when the state of things were like this that sub-section (2) was introduced by Madras Act XXIII of 1948 In the Bill as originally published this sub-section was numbered as clause 8. But at the time it came into the statute-book, the same clause was numbered as section 10. There was no alteration whatever from the original draft as embodied in the Bill when the provision became statutorily embodied in section 10 of Act XXIII of 1948. Section 10 of Act XXIII of 1948 reads: "Section 19 of the said Act shall be renumbered as sub-section (1) of section 19, and after that sub-section, the following sub-section shall be added, namely:(2) The provisions of sub-section (1) shall also apply to cases where, after the commencement of this Act, a Court has passed a decree for the repayment of a debt payable at such commencement". In the statement of objects and reasons, with regard to clause 8 we find the following note: "It has been held by the High Court that section 19 which provides for the amendment of decree does not apply where the decree was passed after the commencement of the Act. In a large number of cases, owing to ignorance and several other causes, the plea that the Act applied to the debts was not taken by debtors before the decree was passed and consequently, they did not get the benefit of the provisions of section 19. This clause accordingly makes specific provision for the scaling down of decrees passed after the commencement of the Act in respect of debts payable at such commencement". (See page 219 of Part IV-A of Fort St. George Gazette, 1947). This clause accordingly makes specific provision for the scaling down of decrees passed after the commencement of the Act in respect of debts payable at such commencement". (See page 219 of Part IV-A of Fort St. George Gazette, 1947). It is clear from the above statement of objects and reasons that the legislature intended that even if no attempt was made to have the beneficent provisions of the Act applied at the time of the passing of the decree, still it is open to the judgment-debtor to apply for the amendment of the decree even thereafter. The plain words of subsection (2) of section 19 do not create any complication. Under sub-section (1) of section 19, it is open to the agriculturist to apply for the scaling down of a decree which had been passed before the commencement of the Act and when sub-section (2) says that the provisions of sub-section (1) shall apply to cases where, after the commencement of this Act a Court has passed a decree for the repayment of debt payable at such commencement, there is no difficulty or ambiguity in holding that this beneficent provision can be availed of by an agriculturist who has defaulted in taking advantage of it at the time of the passing of the decree even after the commencement of the Act, viz., 22nd March, 1938. We would have found no difficulty in coming to this conclusion, were it not for a certain judicial pronouncement in this Court. It is not now contended that the words " commencement of this Act " in sub-section (2), refer to the commencement of Act IV of 1938, viz. 22nd March, 1938, and not to the commencement of Act XXIII of 1948, viz., 25th January, 1949. When once sub-section (2) is engrafted as part of section 19(1) the proper mode of construction is that the Act referred to is the parent Act and not the amending Act. This interpretation is not questioned at all. Section 16 of Act XXIII of 1948 provides for the amendments to have retrospective effect and it may usefully be quoted here:- " 16. This interpretation is not questioned at all. Section 16 of Act XXIII of 1948 provides for the amendments to have retrospective effect and it may usefully be quoted here:- " 16. The amendments made by this Act shall apply to the following suits and proceedings, namely:- (i) all suits and proceedings instituted after the commencement of this Act; (ii) all suits and proceedings instituted before the commencement of this Act in which no decree or order has been passed, or in which the decree or order passed has not become final before such commencement; (iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act: Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act . Clause (i) and (ii) are not applicable to the facts of the present case. But clause (iii) is applicable, because the decree has been passed but not executed or satisfied in full before the commencement of Madras Act XXIII of 1948. I has to be noted that section 16 of Madras Act XXIII of 1948 has not been incorporated into Madras Act IV of 1938, but is now on the statute-book as a separate provision which enables the interpretation of those provisions of Art XXIII of 1948 which have been engrafted in various places and dovetailed in other places in the parent Act, Madras Act IV of 1938. Therefore, in clause (iii) of section 16 of Act XXIII of 1948 the words commencement of this Act“would mean the commencement of Act XXIII of 1948, viz., 25th January, 1949. From the facts above stated, it is clear that the decree in the present case has been passed prior to the 25th January, 1949; but it is conceded that the same has not been executed or satisfied in full before that date. A Full Bench of this Court in Venkatarathnam v. Seshamma1, had considered the effect of section 16 of Madras Act XXIII of 1948 and laid down that clauses (11) and (iii) are entirely independent and are intended to provide for different situations. A Full Bench of this Court in Venkatarathnam v. Seshamma1, had considered the effect of section 16 of Madras Act XXIII of 1948 and laid down that clauses (11) and (iii) are entirely independent and are intended to provide for different situations. A reading of the two clauses together would suggest that clause (iii) would apply exclusively to executable decrees or orders which, though they have become final before the commencement of the Act, are still in the stage of unfinished execution and in the stage at which satisfaction is not fully received. The facts of that case show that before the enactment of Act XXIII of 1948, there was an application for applying the provisions of Act IV of 1938 and there was a final order thereon. But after the coming into operation of Madras Act XXIII of 1948 since there were some more liberal provisions introduced by that Act, the agriculturist-judgment-debtor applied to avail himself of these more liberal and beneficent provisions and it was held that he was entitled to do so. At page 499 of the report, the Full Bench expressed the following opinion:- "But in clause (iii), the words ‘in which the decree or order passed has not become final do not occur. It is quite general and is applied to all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act, so that it seems to apply to decrees or orders, even if they had become final before the commencement of the Act, provided the decree or order has not been executed or fully satisfied. The view taken by the learned Judges in the Civil Miscellaneous Appeals, already referred to, was that, while the two clauses are independent, clause (iii) has no application to proceedings in which the decrees and orders have become final before the commencement of the Act. It is this view which is also pressed now before us by the learned Advocate for the Respondent. It is this view which is also pressed now before us by the learned Advocate for the Respondent. White we agree with the learned Judges in holding that the two clauses are independent, we are unable, with great respect, to accept the view that clause (iii) applied only to cases in which the decrees and orders have not become final If the decree or order has not become final before the commencement of this, Act clause (iii), in our opinion, seems to be unnecessary and as such the case would be covered by clause (ii)". From these observations it is clear that in a case like the present the judgment-debtor is entitled to apply under sub-section (2) of section 19. But it is urged before us by the learned counsel for the respondent that the opening words of section 16 of Act XXIII of 1948, viz., the amendments made by this Act “shall apply to the following suits and proceedings”, mean that only such of the more liberal and beneficent provisions newly introduced have got retrospective application and not the provisions already in existence. For example it is contended that Explanation III to section 8 of Act IV of 1938 gave a different interpretation to the words “same creditor” and “same debtor” and it is only the new alterations that would have retrospective effect. On the other hand, for the appellant it is argued that sub-section (2) of section 19 is very clear and general in its terms so that by its introduction, even if a party did not take advantage of the provisions of section 19 as it stood prior to Act XXIII of 1948, still after the introduction of sub-section (2), he can take advantage of the same Learned counsel for the respondent invited our attention to a decision of Subba Rao and Somasundaram, JJ. in Narayana Chettiar v. Annamalai Chettiar2 where the learned Judges took the view that a party who had an opportunity of getting the beneficent provisions of the Act applied to him before the amendment, but did not avail himself of the same, is disentitled to invoke the provisions of subsection (2) after the amendment. in Narayana Chettiar v. Annamalai Chettiar2 where the learned Judges took the view that a party who had an opportunity of getting the beneficent provisions of the Act applied to him before the amendment, but did not avail himself of the same, is disentitled to invoke the provisions of subsection (2) after the amendment. They say as follows: “Having regard to the scope of section 16 of Act (XXIII of 1948) we are inclined to hold that despite the amended section 19(2) of the Act the position of a party who did not raise the plea under the Agriculturists Relief Act after the said Act came into force is not different from that laid down by the Full Bench in the aforesaid decision. Srirama Reddi v. Srirama Reddi1”. We are afraid we cannot with respect accept this view. This view is directly opposed to the statement of objects and reasons which we have extracted above. As we have already stated, one cannot escape from the plain meaning of the words contained in sub-section (2). Apart from the statement of objects and reasons, we do not find any difficulty in holding that sub-section (2) of section 19 is applicable to cases like the present, and the retrospective nature of that sub-section as contemplated by clause (iii) of section 16 of Act XXIII of 1948 cannot be restricted or circumscribed by any other clause in that section. The same view has been expressed by us in L.P.A. No. 117 of 1949 and by one of us in C.M.A. No. 143 of 1949. We are therefore of opinion that the appellant is entitled to apply for scaling down under section 19(2) of Madras Act IV of 1938. Mr. Manavala Chowdry for the respondent then wanted to justify the decision of the lower Court, which dismissed the application on the ground that the same should have been made to this Court and not to the Subordinate Judge. The decision in Gangaraju v. Ramayya2 is clear authority for holding that even where an appellate Court has either confirmed or modified a decree of the trial Court, still the Court to which an application under section 19 has to be made is the Court of first instance which passed the decree. The decision in Gangaraju v. Ramayya2 is clear authority for holding that even where an appellate Court has either confirmed or modified a decree of the trial Court, still the Court to which an application under section 19 has to be made is the Court of first instance which passed the decree. We do not find that in Veerappa Chettiar v. Sivagami Achi3 the principles laid down in Gangaraju v. Ramayya2 have in any way been dissented from. Following Gangaraju v. Ramayya2 we hold that the proper Court to which the application should be made is the Subordinate Judge’s Court. It is not urged before us that the appellant is not an agriculturist and on that point We agree with the lower Court. In these circumstances the order of the lower Court is set aside and the application is remanded back to the Subordinate Judge for disposal according to law. Costs of this appeal will abide and follow the result. K.C. ----- Order set aside and application remanded.