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Pr.M. Ramaswami Chettiar Alias Periakaruppan Chettiar Vs. M.Pl.Rm. Ramaswami Chettiar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1945Mad342; (1945)1MLJ391
AppellantPr.M. Ramaswami Chettiar Alias Periakaruppan Chettiar
RespondentM.Pl.Rm. Ramaswami Chettiar
Cases ReferredPalaniappa Mudaliar v. Narayana Aiyar
Excerpt:
- - 5. the argument based on tlie appellant's failure to put forward his claim to relief under section 19 of the act in the earlier execution proceedings is equally untenable. 88 of 1942). but, clearly, the appellant was not bound to raise the question of relief under the act by way of objection to the execution of the decree on peril of losing his right to such relief if he failed to do so. 81 which was relied on and followed by this court was disapproved by the house of lords in paton v. 753 is not good law......objections. the order of this court in a.a.o. no. 302 of 1940 allowing the respondent to bring the house in question to sale in execution of the decree cannot possibly have the effect of converting the decree into a liability for which a charge is provided under section 55, clause(iv) sub-clause (b) of the transfer of property act. it was and remained a simple money decree passed against the judgment-debtors for moneys due under deposit letters. the appellant's father was no doubt entitled to a vendor's charge on the house for the balance of unpaid purchase money due to him for the sale to karuppan chetti, and this charge of the judgment-debtor was made available to the respondent by the order of this court allowing him directly to bring the charged property to sale. but this additional.....
Judgment:

Patanjali Sastri, J.

1. This appeal arises out of an application made by the appellant under Section 19 of the Madras Agriculturists' Relief Act, 1938, to scale down a decree obtained by the respondent.

2. The parties are Nattukottai Chettiars carrying on business as money-lenders and bankers and there were dealings between them extending over a number of years. For amounts due in respect of sttch dealings the appellant's father executed two deposit letters for Rs. 4,870-12-0 and Rs. 2,735.45 respectively. The respondent brought a suit against the appellant and his father and brothers who formed a Hindu joint family on the said deposit-letters and obtained the decree in question against the appellant's father who was the first defendant personally and against the family properties of the appellant and his brothers. In execution of the decree the respondent attached a house as belonging to the family of the judgment-debtors but the appellant put forward a claim that it was his separate property, having been purchased by him for Rs. 26,000 from one Karuppan Chettiar to whom the appellant's father had sold it as his self acquisition. The claim was rejected by the Court executing the decree which held that the sales put forward by the appellant were benami transactions unsupported by consideration. On appeal (A.A.O. No. 320 of 1940) this Court, without going into the question of benami, allowed the respondent to bring the house to sale as it was admitted by the appellant's counsel that part of the purchase money reserved with Karuppan Chettiar for payment to certain creditors of the appellant's father including the respondent had not been paid and that the appellant's father was therefore entitled as the vendor to a charge on the property for the unpaid balance of the purchase money which the respondent would in any event be entitled to proceed against in execution of his decree. The Court said:

In these circumstances it seems to us sufficient to say that the order of the lower Court should be set aside and that it should be declared that the decree-holder is entitled to bring the house to sale in enforcement of the vendor's lien on the house ... in execution of this very decree.

3. When, however, the respondent attempted to bring the house to sale in accordance with the aforesaid order, the appellant again objected that the order was not binding on him as his counsel had no authority to make the admissions which he made and that the right to enforce the vendor's lien was barred by limitation. This objection was overruled by the Court executing the decree and its order was upheld by this Court in appeal (A.A.O. No. 88 of 1942). Thereupon the appellant initiated the present proceedings seeking relief under Section 19 of the Madras Agriculturists' Relief Act on behalf of the joint family.

4. There was no dispute before us that the judgment-debtors are agriculturists within the meaning of the Act. The respondent however contended that his decree although originally a simple money decree, as a result of the order of this Court in A.A.O. No. 302 of 1940 aforesaid became a liability for which a vendor's'lien is provided and as such is exempted from the provisions of Sections 8 and 9 of the Act by virtue of Section 10(2)(ii). The respondent also urged that the relief now sought by the appellant not having been claimed by him in the earlier execution proceedings which culminated in A.A.O. No. 302 of 1940 and 88 of 1942 respectively, it was no longer open to the appellant to claim such relief now. These contentions were overruled by the Court below and the respondent has raised them again before us in his memorandum of cross objections. We are of opinion that there is no substance in either of these objections. The order of this Court in A.A.O. No. 302 of 1940 allowing the respondent to bring the house in question to sale in execution of the decree cannot possibly have the effect of converting the decree into a liability for which a charge is provided under Section 55, clause(iv) Sub-clause (b) of the Transfer of Property Act. It was and remained a simple money decree passed against the judgment-debtors for moneys due under deposit letters. The appellant's father was no doubt entitled to a vendor's charge on the house for the balance of unpaid purchase money due to him for the sale to Karuppan Chetti, and this charge of the judgment-debtor was made available to the respondent by the order of this Court allowing him directly to bring the charged property to sale. But this additional facility provided for the realisation of the respondent's decree could not alter the nature of the liability as so to bring it within the category exempted under Section 10(2)(ii) of the Act.

5. The argument based on tlie appellant's failure to put forward his claim to relief under Section 19 of the Act in the earlier execution proceedings is equally untenable. As pointed out in Nagappa Chettiar v. Annapurni Achi : AIR1941Mad235 the Court is not acting in execution in dealing with applications under Section 19 of the Act which are proceedings of 'an independent nature.' It is true that in the present case the Court executing the decree was the same as the Court which passed the decree which alone has jurisdiction to grant relief under Section 19. But this circumstance did not make it obligatory for the appellant to raise the question of relief in the execution proceeding. It appears, however, he referred to the point in his statement of objections filed in E.P. No. 86 of 1941, though he concluded by stating that he would file a separate petition under Section 20 of the Act, and nothing was said about it either in the order of the executing Court or of this Court in appeal (A.A.O. No. 88 of 1942). But, clearly, the appellant was not bound to raise the question of relief under the Act by way of objection to the execution of the decree on peril of losing his right to such relief if he failed to do so.

6. The question next arises as to the extent of relief to which the appellant is entitled under the Act. As stated already, the parties are Nattukottai Chetty bankers and the liability in question arose out of deposits made by the respondent from time to time in the appellant's family firm. There were periodical settlements of account in respect of such deposits, though at irregular intervals, the interest being added to the principal sums outstanding and made to carry interest at the stipulated rate for the next period. Having regard to this mode of dealing the Court below held, following the decision of this Court in Palaniappa Mudaliar v. Narayana Aiyat : AIR1943Mad157 that all the interest accrued due and capitalised as aforesaid before the deposit letters on which the decree was based must be deemed to have been paid and discharged and to be no longer ' outstanding ' to be scaled down under the Act, Hence the Court treated the amounts for which the receipts were passed as the principal for the purpose of applying the provisions of the Act. The appellant's learned Counsel, after attempting to distinguish the present case from the one cited above on grounds which seem to us unsubstantial, suggested that the question requires reconsideration as the decision of the English Court of Appeal in Inland Revenue Commissioners v. Holder L.R. (1931). 2 K.B. 81 which was relied on and followed by this Court was disapproved by the House of Lords in Paton v. Inland Revenue Commissioners L.R. (1938) A.C. 341 in so far as that decision laid down that the entering of the amount of interest as a debit at each of half yearly or yearly rests should be deemed to be a 'payment ' of such interest as between banks and their customers according to the usage governing their mode of dealing. We accept the suggestion of the learned Counsel and We do So the more readily as the decision impugned is our own. Unfortunately, the case before the House of Lords was not then brought to our notice and we followed the high authority of the Court of Appeal in a matter of such general importance to banking interests. But the House of Lords in Paton's case L.R. (1938) A.C. 341 elaborately reviewed the earlier decisions in England dealing with the question and, came to the conclusion that there is no Warrant for the fiction that in such cases the interest can, by the rrlere process of being capitalised, be said to have been paid. Lord Atkin observed:

The question is whether when, the charges are added to the existing indebtedness at the end of one half year and the whole sum brought down as a debit item at the beginning of the next half year so that interest is charged on the last half year's interest, the charges have been paid. The ordinary man, would, I think, say that so far from being paid they are added to the ordinary indebtedness because they are not paid and Ifcan see no reason why the law should say anything different.

* * * * * It would seem that the members of t!ie Court of Appeal in Holder's case considered that there was a line of authority which led them to the conclusion that in these circumstances the interest must in law be deemed to have been paid, I do not think that this is the result of the cases.

The other members of the House expressed the same view. In the light of this authoritative exposition, it must be held that the decision in Palaniappa Mudaliar v. Narayana Aiyar (1942) 3 M.L.J. 753 is not good law.

8. The result is that in scaling down the decree debt the amounts mentioned in the deposit receipts should not be taken as the principal but the process should be carried further back and the amount properly payable to the respondent should be ascertained after applying the appropriate provisions of the Act.

9. The order of the lower Court is set aside and the case is remitted for disposal in the light of this judgment. Parties will pay and receive proportionate costs in that Court. The respondent will pay the costs of the appeal. The memorandum of objections is dismissed with costs.


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