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Tatha Ramabhadhra Somayajulu and anr. Vs. Korada Appalaswamy and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. Nos. 221, 222 and 1117 of 1958
Judge
Reported inAIR1964AP138
ActsDebt Law; Madras Agriculturists Relief Act, 1938; Madras Agriculturists Relief (Amendment) Act, 1950 - Sections 3, 9A and 19A
AppellantTatha Ramabhadhra Somayajulu and anr.
RespondentKorada Appalaswamy and ors.
Appellant AdvocateC.V. Dikshitulu, Adv. in C.R.Ps. Nos. 221 and 222/58 and ;G. Ramajujulu Naidu, Adv. in C.R.P. No. 1117/58
Respondent AdvocateC.V. Dikshitulu, Adv. in C.R.P. No. 1117/58 and ;G. Ramajujulu Naidu, Adv. in C.R.P. Nos. 221 and 222/58
Excerpt:
.....- setting off of mortgage debt - sections 9-a, 19-a and 3 (3) of madras agriculturists relief act, 1938 (as amended by madras act of 1950) - petitioner executed a usufructuary mortgage in favour of respondent - mortgager wanted redemption without paying back mortgage money - he claimed himself a agriculturist - he sought to adjust income arose from mortgage land during mortgage term against mortgage debt - court opined plaintiff cannot claim income arising from suit property - held, plaintiff has only one recourse that is redemption of mortgage. - - ' like other provisions in that chapter, section 9-a is only intended to lay down the principles for scaling down the debts in the case of usufructuary mortgages as defined therein. 12. the contention that the scaling down of the..........the benefit of scaling down as per section 9-a of the act, and prayed for a declaration that the mortgage debt was discharged. the respondents remained ex parte.4. o.p. no. 52 of 1956 was likewise a petition filed under ss. 9-a and 19-a of the act. the petitioner's case was that he and his grand-father executed the usufructuary mortgage-bond in question dated 14-7-1927 for rs. 2,700/- in favour of the first respondent, that the first respondent sub-mortgaged the property to rajana adinarayana and his two sons under a bond dated 20-7-1927, and that the sub-mortgagee died, and his interests devolved upon respondents 2 to 13. after the death of the grand-father, his interest also devolved upon the petitioner, the first respondent is not entitled to the benefit of section 4(h) of the act,.....
Judgment:

Venkatesam, J.

1. These three Civil Revision Petitions raise a question of interpretation of Sections 9-A and 19-A of the Madras Agriculturists Relief Act, IV of 1938, (hereinafter referred to as 'Act'). In view of the conflicting decisions, our learned brother Sharfuddin Ahmad, J., directed their being posted before a Bench.

2. C.R.P. No. 221 of 1953 is a revision against the order in O.P. No. 17 of 1957, while C.R.P. No. 222 of 1958 is against the order in O.P. No. 52 of 1956, on the file of the District Munsif's Court, Parvathipuram.

3. O.P. No. 17/57 was a petition filed under Sections 9-A and 19-A of the Act, alleging that the Petitioners, mother and brother, and the adoptive father of the 2nd petitioner executed a usufructuary mortgage-deed dated 23-8-1905 for Rs. 1,700/- in favour of the father of the 1st Respondent, father of the 2nd respondent, and father of respondents 3 to 5, father of respondents 6 to 9, and the husband of the 10th respondent. As more than thirty years elapsed since the date of the mortgage, the petitioners, alleging to be agriculturists, claimed the benefit of scaling down as per Section 9-A of the Act, and prayed for a declaration that the mortgage debt was discharged. The respondents remained ex parte.

4. O.P. No. 52 of 1956 was likewise a petition filed under Ss. 9-A and 19-A of the Act. The petitioner's case was that he and his grand-father executed the usufructuary mortgage-bond in question dated 14-7-1927 for Rs. 2,700/- in favour of the first respondent, that the first respondent sub-mortgaged the property to Rajana Adinarayana and his two sons under a bond dated 20-7-1927, and that the sub-mortgagee died, and his interests devolved upon respondents 2 to 13. After the death of the grand-father, his interest also devolved upon the petitioner, the first respondent is not entitled to the benefit of Section 4(h) of the Act, the petitioner is an agriculturist, and applying the provisions of Section 9-A, only a sum of Rs. 90/-would be due, and the same was deposited. The petitioner, therefore, prayed for a declaration that the mortgage in question stood discharged. That application was resisted by the respondents.

5. In both the petitions, the learned District Munsif considered a preliminary point viz. whether relief under Section 9-A of the Act can be enforced by a petition under Section 19-A of the Act, or it can be claimed only in a suit for redemption. He felt bound by the decision of Subba Rao J., (as he then was) in Srinivasaraghava Aiyangar v. Narasimha Mudaliar, : AIR1952Mad292 notwithstanding a contrary decision of a Bench of the Madras High Court in Peria Karuppart Chettiar v. Vaithyanathan Chettiar, (1955) 2 Mad LJ 30 and of a single Judge in M. Sanyasappana v. S. Applaswami, : (1953)2MLJ155 and came to the conclusion that the relief under Section 9-A could be enforced only by way of a suit for redemption, and not by a petition under Section 19-A of the Act. By reason of these conflicting decisions, the matter has been referred to us.

6. In answering this question, it is necessary that the relevant provisions of the Act are noted. Section 9-A reads thus:

'9-A 1 This section applies to all mortgages executed at any time before the 30th September, 1947, and by virtue of which the mortgagee is in possession of the property mortgaged to him or any portion thereof-

(a) Where no rate of interest is stipulated for as due to the mortgagee, or

(b) where a rate of interest is stipulated for as due to the mortgagee in respect of the principal amount secured by the mortgage or any portion thereof, in addition to the usufruct from the property, or in respect of any other sum payable to the mortgagee by the mortgagor in his capacity as such.

Explanation:-- A mortgagee shall be deemed to be in possession of the property mortgaged to him or any portion thereof, notwithstanding that he has leased it to the mortgagor or any other person.

2 The mortgagor shall be entitled to redeem the whole of the property mortgaged, notwithstanding that the time, if any, in the mortgage deed for redeeming the mortgage has not arrived.

3 Where the mortgagee has been in possession of the whole of the property mortgaged to him for an aggregate period of less than thirty years, the mortgagor shall not be entitled to redeem the mortgage, unless he pays to the mortgagee.....

(i) x xxx xx

(ii) x x x x x

(iii) xxx x x

(4) X x x x x

(5) (a) where the mortgagee has been in possession of the whole of the property mortgaged to him for an aggregate period of thirty years or more, then, notwithstanding anything contained in Sections 8, 9, 12 and 13, the mortgage debt shall be deemed to have been wholly discharged with effect from the expiry of the period of thirty years or where such period expired before the commencement of the Madras Agriculturists Relief (Amendment) Act, 1948, with effect from the commencement of that Act:--

(i) if no interest has been stipulated for on the principal amount secured by the mortgage or any portion thereof, in addition to the usufruct from the property;

(ii) where such interest has been stipulated for, it' no arrears of interest are due from the mortgagor; and

(iii) if no otter sums or interests thereon faredue to the mortgagee by the mortgagor in 'hiscapacity as such.

(b) Where the mortgagee has been in possession of the whole of the property mortgaged to him for an aggregate period of thirty years or more, then, in cases not covered by Clause (a), the mortgagor shall not be entitled to redeem the mortgage unless he pays to the mortgagee-

(i) the arrears of interest stipulated for in addition to the usufruct from the property, as scaled down under Section 8 or 9 read with Section 12, or under Section 13, as the case may be; ands

(ii) all other sums due to the mortgagee by the mortgagor in his capacity as such and referred to in Sub-clause (iii) of Clause (a) together with any interest due thereon.

(6) xxx xx

7 x x x x x

8 x x x x x

9 (a) (i) Except in cases falling under Sub-section 5(a), where the mortgaged property or, as the case may be, the portion thereof in the possession of the mortgagee has been leased back to the mortgagor by the mortgagee, the rent due to the mortgagee under the lease (after deducting from such rent any revenue, tax or cess paid or payable by mortgagee in respect of the property) shall be deemed to be the interest on the mortgage debt or the portion thereof attributable to the portion of the property aforesaid and the provisions of Section 8 or 9 read with Section 12, or Section 13, as the case may be, shall apply to the entire debt.

(ii) Nothing contained in Sub-section (3) or Sub-section (4) shall apply to any debt falling under Clause (1).

(b) In cases falling under Sub-section (5) (a) where the property has been leased back to the mortgagor by the mortgagee, nothing contained in that sub-section shall affect the right of the mortgagee to recover any rents due to him under the lease for any period before the date on which the mortgage debt is deemed to have been wholly discharged by virtue of that sub-section, if such rents have not become barred by limitation under any law for the time being in force.' Section 19-A of the Act is as follows:

'19-A 1. Where any debt incurred before the 22nd March, 1938, other than a decree-debt, is 'due by any person who claims that he was an agriculturist both on that date and on the 1st October, 1937, the debtor or the creditor may apply to the court having jurisdiction for a declaration of 'the amount of the debt due by the debtor on the date of the application.

Provided that no such application shall be presented or be maintainable if a suit for the recovery of the debt is pending.

Explanation:-- The Court having jurisdiction under this section shall be the Court which would have jurisdiction to entertain a suit for the recovery of the debt as unsealed.

2. The provisions of Sub-section (1) shall apply also to any person claiming to be such an agriculturist who contends that any such debt due by him has been discharged.

3. All persons who would have been necessary parties to a suit for the recovery of the debt shall be impleaded as parties to the application under Sub-section (1) or under that sub-section read with Sub-section (2).

4. (a) When any such application is made, the Court shall decide whether the debtor was such an agriculturist or not and if it finds that he was such an agriculturist, pass an order declaring the amount due by him or declaring that the debt has been discharged, as the case may be.

(b) The court shall dismiss the application it' it finds that the debtor was not such an agriculturist.

5. At any time after passing an order under Clause (a) of Sub-section (4), the Court shall on payment by the creditor of the court-fee payable on a suit for the amount declare due to him, grant a decree to the creditor for such amount;

Provided that the creditor may on his application be granted a decree for an amount less than that declared due to him on paying the appropriate court-fee.

6. The Court may order that the court-fee if any, paid by the creditor under Sub-section (5) shall be paid by the debtor in addition to the amount decreed.

7. If the debtor pays into the Court the amount declared to be due under Clause (a) of Subsection (4) or the amount of the decree granted under Sub-section (5) together with the costs, if any, ordered to be. paid under Sub-section (6), the Court shall grant to the debtor a certificate that the debt has been discharged.

8. The procedure laid down in the Code of Civil Procedure, 1908, for the trial of suits shall, as far as may be apply to application under this section.

9 No Court shall entertain a suit by the creditor for the recovery of a debt:

(i) if an application has been made under Sub-section (1) in respect of such debt to a court having jurisdiction and is pending in such Court; or

(ii) if a Court having jurisdiction has passed an order under Clause (a) of Sub-section (4) in respect of such debt.

10. In computing the period of limitation prescribed for a suit by the creditor for the recovery of a debt, the lime if any, during which the Court was prevented from entertaining the suit by virtue of the provision contained in Clause (i) of Sub-section (9) shall be excluded'.

7. Section 9-A is an important section added by the Madras Agriculturists Relief (Amendment) Act XXIII of 1948. It enacted some special provisions in respect, of usufructuary mortgages, which, to a large extent are exempt from the operation of the Act. Madras Act XXIV of 1950 substituted Section 9-A in the place of the old section. A reading of the section makes it manifest that it is made applicable to all mortgages excused prior to 30th September, 1947, by virtue of which the mortgagee is in possession of the properly mortgaged, or any portion thereof. A mortgagee shall be deemed to be in possession of the property mortgaged to him or a portion thereof, notwithstanding that he had leased ij to the mortgagor or any other person. The section confers a right upon the mortgagor to redeem the whole of the property mortgaged, notwithstanding that a lime was fixed in the mortgage deeds. Sub-section (3) and (4) provide for scaling down of the debt having regard to the term fixed, and other circumstances. Sub-section (5) enacts that, if the mortgagee had been in possession for more than thirty years, the mortgage shall be deemed to have been fully discharged, subject to the conditions enumerated therein. The section provided that in the case of a lease back, the rem payable by the mortgagor shall be deemed to be the. interest on the mortgage debt, and that, notwithstanding the fact that the mortgage is deemed to have been -discharged under Sub-section (5)(a),

the mortgagee will be entitled to recover arrears of rent from the mortgagor if the claim is not otherwise barred.

8. Section 19-A was introduced by the Madras Agriculturists Relief (Amendment) Act XV of 1943. Prior to this enactment, only a decree debt was permitted to be scaled down under the Act, while the present section enables the declaration of a debt, whether decreed or not. On such a declaration being made, it is presumed that parties generally would not take further proceedings, but only pay or receive the amounts so declared. The section does not bar the filing of a suit altogether. It only enacts that when an application under the Act is pending, the suit shall not be entertained; and, when a suit is pending, an application under this section shall not be entertained, and, for computing the period of limitation for recovery of the debt, the time during which the Court was prevented from entertaining the suit is directed to be excluded. Sub-section (8) makes the procedure under the Civil Procedure Code for trial of suits applicable to such an application. Once the debt is declared on the application, a decree can be obtained by the creditor on payment of the required court-fee.

9. Thus, the provisions of Section 19-A make the intention of the Legislature manifest, viz., that the section is intended to provide ah additional, cheap method by which agriculturists and their creditors can get their debts scaled down, and the exact amounts due declared, without haying to pay court-fee on portions of the debt which are not recoverable under the Act.

10. In deciding the question, whether the benefits under Section 9-A can be availed of only in a suit for redemption but not in an application under Section 19-A, it may at the outset be noted Unit a creditor applying under Section 19-A will be entitled only to obtain a declaration of the amount due after scaling down, and would not be entitled to a decree except on payment of the necessary court-fee. Further, as the short-title of Section 9-A itself indicates, it is a Special Provision in respect of usufructuary mortgages. It finds a place in Chapter II of the Act enti led 'Scaling down of debts and future rate of interest.' Like other provisions in that chapter, Section 9-A is only intended to lay down the principles for scaling down the debts in the case of usufructuary mortgages as defined therein.

11. Section 19-A on the other hand, occur; in Chapter IV entitled 'Procedure and Miscellaneous'. As its short title indicates it deals with applications for determination of the amount of the debt due. According to Sub-section (1) of Section 19-A, where any debt is due by an agriculturist on the relevant dates, the debtor or the creditor may apply for a declaration of the amount of the debt due by the debtor on the date of the application. The word 'debt' is defined in Section 3(iii) of the Act to mean

'any liability in cash or kind, whether secured or unsecured due from an agriculturist.....'.

It is, therefore, clear that a mortgage debt is also a debt within the meaning of the Act, and consequently for determination of such debts, an application under Section 19-A ought to lie. There is nothing in Section 19-A, either by express language or by necessary intendment, excluding is operation in the case of mortgage debts. Nor is there anything in Section 9-A, excluding the application of Section 19-A to scaling down of the debts governed by Section 9-A of the Act.

12. The contention that the scaling down of the mortgage debts under Section 9-A can only be obtained in a suit for redemption, and not by an application under the Act is unsustainable for another good reason. This contention appears to be based on Sub-section (2) of Section 9-A to the effect that the mortgagor shall be entitled to redeem the whole of the property mortgaged, notwithstanding that the time fixed in the mortgage has not arrived. It is, no doubt true that Sub-section (2) and Sub-section (3) refer to the rights of the mortgagor to redeem the entire property, or portion of the property, either after or before the expiry of thirty years. On that footing it is difficult to say that, the right by way of an application under Section 19-A is taken away, and that a suit for redemption is the only remedy. As discussed above, Section 19-A does not support such a contention, as it clearly contemplates a decree being obtained after the debt due is de-dared. Similarly, Section 9-A does not warrant the conclusion that the declaration of the mortgage debt cannot be obtained under Section 19-A as a prelude to a decree.

13. A combined reading of Sections 9-A and 19-A in the manner suggested docs not disclose any inconsistency. Even in the case of mortgages to which Section 9-A applies, the mortgage debt can be scaled down according to that section, and declared under Section 19-A, and a decree for redemption or sale of the mortgaged property, as the case may be, can be passed. Mere declaration of the debt would not entitle the mortgagor to recover possession of the property, since Sub-section (8) of Section 9-A lays down that unless the mortgagor pays the mortgagee the cost of improvements, he cannot obtain possession. For these reasons we hold that Section 9-A is not an overriding provision nor does it in any way control Section 19-A. which is general in its terms, and lays down the procedure for the declaration of all debts including mortgage debts due from agriculturists.

14. A Bench of the Madras High Court in (1955) 2 Mad LJ 30 (Mack and Krishnaswami Nayudu, JJ.) held that a mortgage debt to which Section 9-A applies is not one excluded from the operation of Section 19-A of the Act. We follow the reasoning and the conclusions of the learned Judges in that case. There is, however, a judgment of Subba Rao, J. (as he then was) in : AIR1952Mad292 wherein the learned Judge observed that Section 9-A is intended only to apply when the mortgagor seeks to redeem the mortgage. That was a case which arose out of a suit by usufructuary mortgagee for recovery of rent on the basis of a lease back in favour of the mortgagor. The petitioner in that case contended that under Sections 9-A, 6(a) of the Act, he was only liable to pay interest, but not rent agreed to be paid under the lease deed. The learned Judge held that, as the lease back had not been declared to be invalid, if the mortgagor did not apply for redemption, there was nothing in the provisions of the Section or in the Act which precluded a mortgagee from filing a suit for recovery of rents legally due to him under the lease-deed. It is therefore, clear that the question now for consideration did not arise for decision in that ease, nor was it decided. We do not construe the observations of the learned Judge that the scheme of the section was intended only to apply when the mortgagor sought to redeem the mortgage in a suit instituted for the purpose, and that Section 9-A could not be invoked in an application under Section 19-A.

15. It is, no doubt, true that this decision in : AIR1952Mad292 does not appear to have been cited before the Bench which decided (1955) 2 Mad LJ 30. But, as already stated, we follow the latter Bench decision.

16. Ramaswami, J., in a case reported in Easoop v. Bookutty Umma, (S) AIR 1956 Mad 259 (259) has taken the same view. In that case, the question directly arose for consideration whether the scaling down of mortgage debt under Section 9-A cannot be done except in a suit for redemption. The learned Judge distinguished the decision in : AIR1952Mad292 and followed .he Bench decision cited above. It was observed that there was nothing to show that Section 9-A is an overriding provision and otherwise self-contained, having no relation whatever with the procedure laid in the Act for enforcing the rights of the agriculturists, and that there is nothing in Section 19-A which could be said to bar an application by a mortgagor who is entitled to the right of scaling down under Section 9-A, and to obtain a declaration of discharge of the mortgage, though any further remedy which the mortgagor might claim to have, as and by way of recovery of possession or otherwise, could be had not in a proceeding under Section 19-A, but the other modes open to him under law, ordinarily by way of suit.

17. Some decisions of this Court have been placed before us where applications under Section 19-A for scaling down mortgage debts as per the provisions of Section 9-A were entertained and declaration given. It is not necessary to cite those cases, as this question was not expressly decided, but it was assumed that the applications were maintainable. In fact in : (1953)2MLJ155 Subba Rao, J., (as he then was) himself entertained an implication under Section 19-A, and scaled down the debt as per Section 9-A..18 These revisions (C.R.Ps. 221 and 222 of 1958) are therefore allowed, the orders of the District Munsiff are set aside, and the petitions are remanded for disposal of all other questions in accordance with law. The costs of these revision petitions will abide the result of the petitions in the trial court.

C.R.P. No. 1117 of 1958

19. This revision arises out of an order of the District Munsiff, Parvatbipuram, in O.P. No. 9 of 1957. The question raised in this case also is whether a petition under Section 19-A claiming the benefit under Section 9-A of the Act is maintainable, or whether the remedy is only way of a suit for redemption. The same District Munsiff who decided O.Ps. 52 of 1956 and 17 of 1957, held in this petition that the application under Section 19-A is maintainable. He referred to the decisions of Ramaswami J., in (S) AIR 1956 Mad 259 and of the Bench in (1955) 2 Mad LJ 30, but rested his decision on the ground that Subba Rao, J. (as he then was) in : (1953)2MLJ155 assumed that such an application was maintainable and that the learned Judge could not be said to have been unaware of his earlier decision, if really he intended to lay down that petition would not He, and accordingly hold that the petition is maintainable,

20. We have already given our reasons in the other two C. R. Ps. for holding that an application under Section 19-A is maintainable. The order of the District Munsif in this case is right, and needs no interference. C.R.P. 1117 of 1958 is. therefore, dismissed, but in the circumstances there will be no order as to costs,


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