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K. Hutchi Gowder Vs. Richobdas Fathaimull and Company - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1965SC577; [1964]8SCR306
ActsMadras Agriculturists Relief Act, 1938 - Sections 13 and 19
AppellantK. Hutchi Gowder
RespondentRichobdas Fathaimull and Company
Excerpt:
.....like the act, cannot rely upon the supposed policy of the legislatureand extend the scope of the relief given to agriculturists by analogy. 13 itself and contends that the said section provides, in thecase of debts incurred after the parent act came into force, both for thesubstantive relief as well as for the machinery to give the said relief......this appeal by certificate raises the question whether a decree obtainedin a suit to enforce a debt incurred after the madras agriculturists reliefact, 1938 (act 4 of 1938), hereinafter called the parent act, came into forcecould be scaled down under s. 13 of the parent act. 2. the facts are as follows :on february 15, 1964, the appellant and 4 others executeda mortgage deed in favour of kaverlal chordia for a sum of rs. 2,00,000 payableafter three years with interest at 9 per cent. per annum. on january 24, 1946,the mortgagee assigned the said mortgage in favour of the respondent. certainpayments towards principal and interest were made thereunder. on february 28,1950, the assignee-mortgagee i.e., the respondent, filed a suit, o.s. no. 55 of1950, in the court of the subordinate.....
Judgment:

Subba Rao, J.

1. This appeal by certificate raises the question whether a decree obtainedin a suit to enforce a debt incurred after the Madras Agriculturists ReliefAct, 1938 (Act 4 of 1938), hereinafter called the Parent Act, came into forcecould be scaled down under s. 13 of the Parent Act.

2. The facts are as follows :

On February 15, 1964, the appellant and 4 others executeda mortgage deed in favour of Kaverlal Chordia for a sum of Rs. 2,00,000 payableafter three years with interest at 9 per cent. per annum. On January 24, 1946,the mortgagee assigned the said mortgage in favour of the respondent. Certainpayments towards principal and interest were made thereunder. On February 28,1950, the assignee-mortgagee i.e., the respondent, filed a suit, O.S. No. 55 of1950, in the Court of the Subordinate Judge, Nilgiris, Ootacamund, for therecovery of Rs. 1,98,487-8-0, made up of Rs. 1,50,000 for the balance of theprincipal and Rs. 48,487-8-0 for interest due on the mortgage. The suit endedin a compromise dated December 21, 1950, under which a decree was passed forRs. 1,50,000 on account of principal, with interest and further interest at 9per cent. per annum and costs, subject to some concessions being shown in theevent of payments being made in certain specified instalments. Thereafter,certain payments were made towards the decree. In due course the respondentfiled I.A. No. 382 of 1953 for the passing of a final decree. On June 24, 1955,the appellant filed O.P. No. 24 of 1955 for scaling down the debt. Therespondent, inter alia, contended in his objections filed against the saidapplication that as the debt sought to be scaled down was incurred subsequentto March 22, 1938, which is the date of the commencement of the Parent Act, thedecree could not be scaled down under s. 19(2) of the Parent Act. The learnedSubordinate Judge overruled the objection and held by his order dated August10, 1956, that the decree was liable to be scaled down in terms of s. 13 of theParent Act. He accordingly scaled down the decree debt. On appeal, a DivisionBench of the Madras High Court held that as the statutory right to have the interestscaled down was not put forward before the consent decree was passed, thedecree could not be scaled down at the stage of the final decree proceedings.It further held that s. 19(2) of the Parent Act only applied to debts payableat the commencement of the said Act and, therefore, the application for scalingdown the decree was not maintainable. In the result it set aside the order ofthe Subordinate Judge and dismissed the petition for scaling down the debt.Hence the present appeal.

3. Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, did notpress the appellant's claim under s. 19(2) of the Parent Act, but put it unders. 13 of the said Act. He took us though the relevant provisions of the ParentAct, which according to him disclose the legislative policy undermining thesacrosanctity of decrees and pressed on us to hold, on a scrutiny of theprovisions of s. 13 of the Parent Act in the light of the said policy, that thedecree made in respect of a debt incurred after the Parent Act came into forcewas liable to be scaled down thereunder.

4. Mr. Pathak, learned counsel for the respondent, makes a distinctionbetween the substantive and procedural provisions and contends that the ParentAct does not make any provision for scaling down decrees made in respect ofdebts incurred after the said Act came into force. The general scheme of theParent Act gathered therefrom may be briefly stated thus. The main object ofthe Parent Act was to give relief to agriculturists. 'Debt' has beendefined in s. 3(iii) of the Parent Act as any liability in cash or kind,whether secured or unsecured, due from an agriculturist, whether payable undera decree or order of a civil or revenue court or otherwise. This definition israther comprehensive; it takes in secured, unsecured and decree debts due froman agriculturist. Section 7 of the Parent Act declares that a debt so definedhas to be scaled down in the manner prescribed by the said Act. Section 8provides the mode of scaling down debts incurred before 1932 and s. 9, thedebts incurred after 1932 but before March 22, 1938; and s. 13 deals with thescaling down the debts incurred after the commencement of the Parent Act. Therelief granted under the said Act varies with the date of the debt dependingupon whether it falls under one or other of the said three periods. While Sections7, 8, 9 and 13 give the principles for scaling down a debt, s. 19 provides themachinery for scaling down. Section 19 of the Parent Act, as amended in 1948,reads :

'(1) Where before thecommencement of this Act a court has passed a decree for the repayment of adebt, it shall, on the application of any judgment-debtor who is anagriculturist...... apply the provisions of this Act to such decree and shall,notwithstanding anything contained in the Code of Civil Procedure, 1908, amendthe 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, aCourt has passed a decree for the repayment of a debt payable at suchcommencement.'

5. It may be mentioned that the second clause was inserted by the AmendingAct of 1948. Before the amendment there was a conflict of view on the questionwhether s. 19(1) could be invoked in amending a decree passed after thecommencement of the Parent Act in respect of a debt incurred before the saidAct. Sub-section (2) made the position clear and declared that it could bedone. The position, therefore, is that in the case of debts other than decree-debts,the scaling down process will have to be resorted to in an appropriateproceeding taken in respect of the debt and in the case of decrees in respectof debts incurred before the Parent Act whether made before or after the saidAct, by filing an application under s. 19(1) or (2) of the Board Act, as thecase may be. But s. 19 on its express terms does not permit the filing of anapplication for amending a decree by scaling down a debt incurred after theParent Act came into force. Doubtless, as Mr. Viswanatha Sastri contents, theParent Act, to some extent, undermines the sanctity of decrees, but that is toimplement the policy of the Legislature to give relief to agriculturists overburdened with debts. But a Court, particularly in the case of an expropriatorymeasure like the Act, cannot rely upon the supposed policy of the Legislatureand extend the scope of the relief given to agriculturists by analogy. Thescope of the relief shall necessarily be confined to that given by the Actexpressly or by necessary implication. A fair reading of sub-sections (1) and(2) of s. 19 of the Parent Act disclose beyond any reasonable doubt that theLegislature does not provide thereunder any machinery for reopening a decreemade in respect of a debt incurred after the Act came into force.

6. Realizing this difficulty, Mr. Viswanatha Sastri relied upon theprovisions of s. 13 itself and contends that the said section provides, in thecase of debts incurred after the Parent Act came into force, both for thesubstantive relief as well as for the machinery to give the said relief. Thesaid section reads :

'In any proceeding for recovery of a debt, theCourt shall scale down all interest due on any debt incurred by anagriculturist after the commencement of this Act, so as not to exceed a sumcalculated as 6 1/4 per cent. per annum, simple interest............'

7. The Government by notification reduced the rates of interest to 5 1/2 percent. per annum with effect from July 29, 1947. Let us scrutinize theprovisions of the section in the light of the arguments advanced.

8. Learned counsel asks us to read the words 'decree debt' insteadof 'debt' in s. 13 of the Parent Act, for 'debt' is definedto take in a decree debt, and by so reading, he contends, in any proceedings,which, according to him, includes a final decree application, the court shallscale down all interest in the manner prescribed thereunder. It is furtherargued that final decree proceedings are only proceedings in a suit and,therefore, the word 'recovery' in the sub-section is appropriate inthe context of a decree debt. This argument, if accepted, disturbs the entirescheme of the Parent Act. Section 13 is one of the group of sections viz., Sections8, 9 and 13, dealing with the principles of scaling down in a proceeding forthe recovery of a debt. But where a decree is to be amended, the Act has takencare to provide expressly for the amendment of the decree. If the Legislatureintended to provide for the amendment of the decrees even in cases fallingunder s. 13, it would have added another appropriate clause in s. 19. Theabsence of any such clause indicates an intention that in cases of debtscomprehended by s. 13, the Legislature gives only a limited relief expresslyprovided thereunder. It is said, so far as the reopening of decrees after theParent Act came into force is concerned, whether in respect of debts incurredbefore or after the said Act, there cannot possibly be a justification for adifference in the manner of their treatment. A plausible reason can bediscerned for this legislative distinction between debts incurred before theAct and those incurred after the Act; for, in the former when the debts wereincurred the Act was not in existence and, as the debtors could not haveanticipated the provisions of the Act, they were given the summary remedy, butthe agriculturists who incurred debts after the Parent Act with open eyes weredenied the same; while in the former, they were allowed to reopen decrees madein respect of the said debts before or after the Act, in the latter they couldclaim relief only in an appropriate proceeding before the decree was made andthat too was confined to the limited relief in regard to the rate of interestprovided thereunder. The difference in the treatment of the two categories ofdecrees was brought about by sub-section (2) of s. 19 added by a lateramendment. Whatever may be the reason for the difference, we cannot extend thescope of s. 13 by analogy or by stretching the meaning of the words'proceeding' and 'recovery'.

9. Reliance is placed upon s. 13-A of the Parent Act, which reads :

'Where a debt is incurred by a reason who would bean agriculturist as defined in section 3(ii) but for the operation of proviso(B) or proviso (C) to that section, the rate of interest applicable to the debtshall be the rate applicable to it under the law, custom, contract or decree ofCourt under which the debt arises or the rate applicable to an agriculturistunder section 13, whichever rate is less.'

10. On the basis of this section a contention is raised that Sections 13 and 13Arelate to the same subject-matter with the difference that while s. 13 appliesto agriculturists who incurred debts after the Parent Act came into force, s.13A applies to persons who would be agriculturists but for the provisos (B) and(C) of s. 3(ii) in respect of debts incurred after the Act, and as a fairreading of s. 13-A indicates that it applies to decrees made in regard to debtsincurred after the Act, it must be interpreted reasonably that s. 13 alsoapplies to such decrees. Mr. Pathak, learned counsel for the respondent, on theother hand, contends that s. 13-A only applies to pre-Act debts, as s. 7 whichdeclares the scheme of scaling down of debts applies only to pre-Act debts andthe only exception to it is s. 13-A. Be that as it may, we cannot construe s.13 with the aid of s. 13-A which was introduced by the Amending Act 23 of 1948.This appeal does not call for an interpretation of s. 13A of the Act and weshall not express any opinion thereon.

11. The legal position may be briefly stated thus. Section 7, 8, 9 and 13form a group of sections providing the principles of scaling down of debtsincurred by agriculturists under different situations. A debt can be scaleddown in an appropriate proceeding taken in respect of the same. But in the caseof debts that have ripened into decrees, s. 19(1) and (2) prescribe a specialprocedure for reopening the decree only in respect of debts incurred before theParent Act. The Parent Act does not provide for the reopening of decrees madein respect of debts incurred after in came into force, and for understandablereasons the relief in respect of such decrees is specifically confined only toa concession in the rate of interest.

12. For the foregoing reasons, we hold that the order of the High Court iscorrect. In the result, the appeal fails and is dismissed with costs.

13. Appeal dismissed.


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