M. K. Kuruvilla v. M. S. Joseph — 1960 DIGILAW 423 (KER)

Judgment :- 1. The appeal arises in execution, the appellant before us being the defendant-judgment-debtor and the respondent the plaintiff decree-holder. The suit was filed on 16th January, 1954 for recovery of the mortgage money by sale of the mortgage property and a decree for sale was passed on 23rd January, 1959. Pending suit the Kerala Agriculturists Debt Relief Act of 1958 came into force on 14th July, 1958. After decree the decree-holder filed E.P. No. 42 of 1959 on 4th August, 1959 for execution of the decree by sale of the property and notice thereof was issued to the judgment-debtor. The judgment-debtor thereupon filed C.M.P. No. 84 of 1960 on 6th January, 1960 raising his objections to the execution of the decree. One of the objections was that the judgment-debtor was entitled to damages for the demolition, of a shop-building, which existed on the property at the time of the mortgage. The second objection was either to direct the execution of the decree in instalments as contemplated by the provisions of the Debt Relief Act or to dismiss the Execution Petition altogether. There was another objection also, with which we are not concerned in this appeal. The lower court dismissed both the objections and allowed execution to proceed and the judgment-debtor has filed this Appeal disputing the correctness of the above order. 2. We would, at the outset, dispose of the question regarding damages for the demolition of the shop-building. On this point the evidence available in the case consists of the report filed by the commissioner appointed during the trial of the suit and the oral evidence adduced by one witness on behalf of the decree-holder and four witnesses on the side of the judgment-debtor, one of whom being the commissioner and another the judgment-debtor himself. The evidence of the commissioner and even that of the decree-holder's witness establish that there was a shop-building in the suit property at the time of the mortgage and the same was not in existence at the time of the suit and this was the finding of the lower court also. But the lower court further held that the judgment-debtor did not prove that it was due to the gross negligence of the decree-holder that the shop-building ceased to exist. We are afraid that in the method of approach to the question the learned Subordinate Judge was in error. But the lower court further held that the judgment-debtor did not prove that it was due to the gross negligence of the decree-holder that the shop-building ceased to exist. We are afraid that in the method of approach to the question the learned Subordinate Judge was in error. When it was found that there was a building at the time of the mortgage and that the mortgage property with the building thereon was in the possession of the mortgagee and it was also found that the building was not in existence at the time of suit, the onus was on the mortgagee, who had been in possession, to show that the building ceased to exist due to natural causes and not due to his gross negligence. There is no reliable evidence in the case on the side of the decree-holder to show that the shop-building ceased to exist as a result of natural causes. The mortgagee, who was in possession of the mortgage property belonging to the mortgagor, was a trustee for the mortgagor and he was bound to inform the mortgagor if the building had fallen down due to natural causes. In the absence of such notice to the rnortgagor the onus is on the mortgagee to prove that it was not due to his gross negligence that the building ceased to exist. On this question there are two recent decisions of our High Court. The first case is Nani Kunjukrishnan v. Padmanabha Pillai Krishna Pillai, 1958 KLT. 645 in which a Division Bench of this Court held: "There is no evidence of any active waste committed by the persons in possession but that fact alone cannot absolve them of liability to account for the timber of the trees which had fallen down during the period of their possession. The mortgagees were bound to inform the mortgagors if trees had fallen down due to natural causes and if thereafter the mortgagors had failed to remove the timber, the mortgagees could not be held answerable for the same. There is no evidence in this case that the mortgagees ever informed the mortgagors that any tree had fallen down due to natural causes. They are therefore liable to account for the timber value of trees which were in existence when the mortgagees got possession and which are now missing." The other decision is Velayudhan Narayanan v. Krishnan Sankaran, 1960 KLT. They are therefore liable to account for the timber value of trees which were in existence when the mortgagees got possession and which are now missing." The other decision is Velayudhan Narayanan v. Krishnan Sankaran, 1960 KLT. 423 - (1960) 1. K.L.R. 459. In this decision the learned judges observed that a mortgagee in possession of property was liable for active waste committed by him but permissive waste stood on a different footing, the question of damages depending on whether the mortgagee had been guilty of gross negligence. Their Lordships quoted with approval a passage from Law of Mortgages in India by Ghose accepting the principles laid down by Alderson, B., in Wragg v. Denham, that a mortgagee in possession was a trustee for the mortgagor. Their Lordships also observed that though the Transfer of Property Act was not in force in Travancore, the same principle was consistently being followed by the High Court of Travancore. Therefore there cannot be any doubt that the above principles apply to the present case and on that basis the mortgagee-decree¬holder is liable to pay damages for the shop-building. 3. Coming to the quantum of damages we are of the opinion that the onus is on the mortgagor to prove the actual damages. There is evidence on the side of the judgment-debtor that the shop-building would have cost about Rs. 300/- or Rs. 350/- at the time when it was put up and there is no evidence contra on the side of the decree-holder. Therefore we would accept this figure as a fair assessment of the value of the shop-building and making some deduction for depreciation we would fix the damages for the shop-building at Rs. 150/-, which the decree-holder respondent is liable to pay. 4. The next and the more substantial question before us is whether the decree-holder is entitled to execute the decree for the entire amount or only for the defaulted instalments as contemplated by the Kerala Agriculturists Debt Relief Act. 150/-, which the decree-holder respondent is liable to pay. 4. The next and the more substantial question before us is whether the decree-holder is entitled to execute the decree for the entire amount or only for the defaulted instalments as contemplated by the Kerala Agriculturists Debt Relief Act. The three grounds, on which the lower court dismissed the objections of the judgment-debtor, are: (1) that S.4 (2) of the Act does not apply to this case as this case is covered by the special provision contained in S.11 of the Act; (2) that, the decree in the present case being one passed after the date of commencement of the Act, the judgment-debtor is not entitled to claim the benefits of the Act at this stage, the proper stage being the time when the decree was passed and (3) that the judgment-debtor has not applied for determination of the debt and permission to discharge the debt under S.4. Now we will consider the correctness or otherwise of, these grounds. S.11 (1) reads: '11. Special provision in respect of usufructuary mortgages by agriculturists. (1) Subject to the provisions of S.25, this section applies to all subsisting mortgages executed by an agriculturist at any time before the commencement of this Act and by virtue of which the mortgagee is in possession of the property mortgaged to him or any portion thereof." S. 4 (3) lays down that the provisions of that section shall not apply to mortgages to which S.11 applies. Therefore if S.11 applies, the provisions of S.4 will not apply to the present case. A scrutiny of S.11 (1) reveals that section applies to subsisting mortgages only, which means mortgages subsisting at the time when S.11 is sought to be applied. There does not appear any bar or limitation, which confines the application of S.11 to mortgages subsisting at the commencement of the Act. Therefore, now that a decree has been passed on the foot of the mortgage and the mortgage has ceased to exist the same having merged in the decree, S.11 can have no application to the present case. It may then argued that the agriculturist-debtor should have claimed relief under S.11 when the Act came into force, failing which he is precluded from claiming relief now. This further question is connected with question No. 2 above and we shall deal with that question presently. 5. It may then argued that the agriculturist-debtor should have claimed relief under S.11 when the Act came into force, failing which he is precluded from claiming relief now. This further question is connected with question No. 2 above and we shall deal with that question presently. 5. S.10 of the Act provides for three categories of cases. Sub-section (1) thereof lays down that in respect of a decree for debt passed before the commencement of the Act, if a debtor fails to make any one of the payments specified in sub-section 2 of S.4 or in the order on the application made under S.8, the decree-holder shall be entitled to execute the decree in respect of the instalment which is in arrear. Sub-section 3 of S.10 deals with a suit pending at the commencement of the Act for recovery of a debt. In such a case if the debtor claims to be an agriculturist the court shall, if the claim is accepted, pass a decree for the immediate payment of such instalment or instalments as would have become payable under the provisions of sub-section 2 of S.4 and the balance in further instalments as specified in the same sub-section. S.10 (2) covers the third category of cases, i. e., suits filed after the commencement of the Act for recovery of debts. In a case falling under this category the court, in decreeing the suit, shall provide for the immediate payment of such instalment or instalments as would have become due under the provisions of sub-section 2 of S.4 and the balance in further instalments as specified therein. So that these three clauses of S.10 exhaust all possible cases; i. e., cases where decrees have already been passed before the commencement of the Act; cases pending at the commencement of the Act, wherein decrees have been subsequently passed and cases which have been instituted after the Act and decrees passed thereafter. It appears from sub-section (1) that in a case where the decree has been passed prior to the commencement of the Act, even if the debtor fails to make any one of the payments specified in sub-section 2 of S.4, the decree-holder gets a right to execute the decree only to the extent of the defaulted instalments and be does not get a right to execute the whole decree. Under the other two sub-sections of S.10 the agriculturist-debtor is given an opportunity to claim relief under the Act at the time of passing the decree and get a decree passed in terms of the provisions of S.4 (2). The question is whether, if the debtor fails to take advantage of these provisions, we mean the provisions of sub-sections 2 and 3 of S.10, he loses his right to claim relief at a later stage. If we now turn to S.7 (2) of the Act we will get considerable light on this question. We would extract S.7: 7. Amendment of certain decrees: (1) Where, before the commencement of this Act, a Court has passed a decree for repayment of a debt, it shall, on the application of any judgment-debtor who is an agriculturist 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. (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 any debt." Sub-section [1] above deals with decrees passed prior to the commencement of the Act. Such decree's, on the application of the agriculturist-debtor or on the application of the decree-holder, shall not withstanding anything contained in the Code of Civil Procedure, bo amended applying the provisions of the Act. Sub-section (2) applies the provisions of sub-section (1) to cases, where decrees have been passed for the repayment of debts after the commencement of the Act. Now we shall consider the effect of this latter sub-section. If the agriculturist-debtor is given only one opportunity, in cases falling under sub-sections 2 and 3 of S.10, of claiming relief under the Act, then S.7 (2) serves no purpose. S.7 [2] clearly indicates that an agriculturist-debtor, who fails to take advantage of the provisions of sub-sections 2 and 3 of S.10 and allows a decree to be passed against him, can, subsequent to such passing of the decree, apply for amendment of the decree under S.7 (2). S.7 [2] clearly indicates that an agriculturist-debtor, who fails to take advantage of the provisions of sub-sections 2 and 3 of S.10 and allows a decree to be passed against him, can, subsequent to such passing of the decree, apply for amendment of the decree under S.7 (2). The scheme of the Act appears to be clear and that is that an agriculturist-debtor is allowed to claim relief not only at one stage, i. e., at the stage of passing the decree, but also at a second stage, i. e., after the passing of the decree and that is clearly indicated by S.7 (2). The possible objection to this construction is that the debtor, who fails to take advantage of the provisions of sub-sections 2 and 3 of S.10 is debarred by the principle of res judicata to claim relief under S.7 (2). But it may be noted that the provisions of S.7 (1) apply notwithstanding anything contained in the Code of Civil Procedure and the same result is achieved, in eases falling under sub-sections 2 and 3 of S.10, by making the provisions of sub-section [1] applicable to cases of decrees passed after the commencement of the Act, by sub-section [2] of S.7. In this connection we would refer to one decision of the Supreme Court where an analogous provision of the Madras, Agriculturists Debt Relief Act came up for consideration. That case is S. PI. Narayanan Chettiar v.M.Ar.Annamalai Chettiar, AIR. 1959 SC. 275. S.19 of the Madras Act is substantially the same as S.7 of the Kerala Act. In this connection we would refer to one decision of the Supreme Court where an analogous provision of the Madras, Agriculturists Debt Relief Act came up for consideration. That case is S. PI. Narayanan Chettiar v.M.Ar.Annamalai Chettiar, AIR. 1959 SC. 275. S.19 of the Madras Act is substantially the same as S.7 of the Kerala Act. S.19 of the Madras Act is in the following terms: 19 [1] 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 a 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: [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 Madras Act sub-section [2] of S.19 was inserted by an amending Act on 25th January, 1949. On that date a suit against an agriculturist-debtor was pending in appeal before the Madras High Court and the High Court passed a decree against the agriculturist-debtor on 9th March, 1951, i.e., after sub-section 2 of S.19 was inserted by the amending Act. The debtor did not claim any relief under S.19 [2] at the time of the disposal of the appeal by the High Court. Subsequently he applied to the trial court for relief under S.19 [2] and the trial court was of opinion that the decree could be scaled down under the said sub-section but it held that it had no jurisdiction to grant that relief as the decree sought to be scaled down was passed by the High Court. Subsequently he applied to the trial court for relief under S.19 [2] and the trial court was of opinion that the decree could be scaled down under the said sub-section but it held that it had no jurisdiction to grant that relief as the decree sought to be scaled down was passed by the High Court. The agriculturist-debtor took up the matter in appeal to the High Court and also made a separate application in the High Court for scaling down the decree debt under S.19 [2] The High Court dismissed the application on the ground that the debtor should have applied for scaling down before the decree was passed and since he did not do that the subsequent application to scale down the decree was barred by the principle of res judicata. On appeal by special leave to the Supreme Court their Lordships of the Supreme Court reversed the decision of the Madras High Court and held that the provisions of S.19[2] conferred the right to obtain relief of scaling down, notwithstanding the provisions of the Code of Civil Procedure, and therefore the principle of res judicata had no application. We would observe with respect that the above view expressed by the Supreme Court applies to the present case also. Their Lordships also held that it was clear in the Madras Act that a debtor was entitled to ask for relief under the said Act at two stages, one before a decree for repayment of a debt was passed and the other after such a decree was passed. In the Kerala Act also the scheme appears to be quite clear that an agriculturist-debtor, against whom a suit is either pending at, or instituted after, the commencement of the Act, is entitled to claim relief under the Act both at the time when the decree is passed and also after the passing of the decree. If this scheme of the Act is not lost sight of, there is no difficulty in interpreting S.7 (2) and sub-sections 2 and 3 of S.10. If this scheme of the Act is not lost sight of, there is no difficulty in interpreting S.7 (2) and sub-sections 2 and 3 of S.10. In the above view we hold that, though "it may prima facie appear to be anomalous that it should be available to a party to ask for relief under the Act after the passing of the decree, when he had an opportunity of asking for that relief before the decree was passed, but did not so," the scheme of the Act appears to be clear that the party is given two such opportunities, one before a decree for repayment of the debt has been passed against him and the other after such decree has been passed. Therefore the failure on the part of the judgment-debtor to get a decree passed in terms of S.10 [3] does not debar him from claiming relief under S.7 [2] 6. The third objection is that there is no application by the judgment-debtor under S.7. It may be noted that S.7 provides for an application by a judgment-debtor or even by a decree-holder. The judgment-debtor has two courses open to him for getting relief under S.7. The first is by making an application under that section. If he fails to do so, he can object to execution being levied against him for the realisation, of the entire decree amount without giving him relief under the provisions of the Act. In this case, at any rate, C.M.P. No. 84 of 1960 makes two alternative prayers, one to direct the execution of the decree against the judgment-debtor only to the extent of the defaulted instalments under the Debt Relief Act and the other to dismiss the execution petition on the ground that the decree-holder is not entitled to execute the entire decree. It would be advantageous even to the decree-holder to treat this application of the judgment-debtor as an application under 7 for amendment of the decree confining the relief to the first prayer rather than dismiss the execution petition in toto. 7. Another contention that has been attempted by Mr. K.P. Abraham, the learned advocate of the respondent, is that the judgment-debtor should take some step either by way of payment of an instalment or by way of an application under S.7 or 8 to entitle him to the benefits of the Act. 7. Another contention that has been attempted by Mr. K.P. Abraham, the learned advocate of the respondent, is that the judgment-debtor should take some step either by way of payment of an instalment or by way of an application under S.7 or 8 to entitle him to the benefits of the Act. According to the learned counsel, if the judgment-debtor fails to take such a step, he is not entitled to any benefit under the Act and he cannot object to the decree being executed in its entirety by the decree-holder. The unsoundness of this argument will be presently revealed if we turn to S.6 (2) of the Act. S.6 (2) reads: "The provisions of S.4 shall, for purposes of execution, be deemed to be a subsequent order of Court within the meaning of clause (b) of sub-section (1) of S.48 of the Code of Civil Procedure, 1908". S. 48 (1) (b) of the Code of Civil Procedure lays down the starting point of limitation in a case where any subsequent order of Court directs any payment of money at a certain date or at recurring periods. In such a case Clause (b) lays down that the date or dates of default of such payment or payments will be the fresh point or points of limitation. Beading S.6 (2) of the Act and S.48 [1] [b] of the Code of Civil Procedure, it becomes clear that the starting points of limitation for the purposes of execution of the different instalments contemplated by S.4 are automatically fixed by the deeming provision in S.6 [2] without any step or application being taken by either the judgment-debtor or the decree-holder. S.4 by virtue of S.6 [2], becomes, as it were, or shall be deemed to be, a subsequent order of Court under S.48 [1] [b] of the Code of Civil Procedure. Therefore this contention also has no merit and has to be rejected. 8. As a result of the foregoing discussion we set aside the order of the lower court and direct the lower court to treat C.M.P. No. 84 of 1960 as a petition under S.7 of the Act and proceed with it in the light of this judgment. In the circumstances of the case we would direct each party to bear his costs both here and in the lower court. In the circumstances of the case we would direct each party to bear his costs both here and in the lower court. The sale will be stayed pending the said petition in the lower court. Allowed.