1. The question in this civil revision petition is whether the petitioner, who gave a surety bond undertaking to satisfy any decree which might be passed against respondents 2 and 3, can be deemed to be a judgment-debtor entitled to scale down the decree which was ultimately passed, by the procedure laid down in Section 19 of Madras Act IV of 1938.
2. The matter arises out of a suit brought by the first respondent against respondents 2 and 3 on two promissory notes, one dated 31st July, 1929 and the other dated 27th June, 1931. A decree was passed ex parte and subsequently there was an application to set aside the ex parte decree. The defendants were required to give security as a condition precedent to the setting aside of the decree and the present petitioner gave a bond on 4th July, 1934 in which he undertook to satisfy any decree which might be passed against the respondents 2 and 3. The ex parte decree was therefore set aside and the suit reopened and on 10th September, 1934, a compromise decree was passed in favour of the first respondent against respondents 2 and 3 for a sum of Rs. 603-10-0 with interest at 12 per cent, on Rs. 500 from the date of the plaint to the date of the decree and Rs. 83 costs and subsequent interest at six per cent. After this compromise decree was obtained, the decree-holder proceeded to execute the decree against the surety. The surety contended that he was not bound to satisfy the decree because it was based on a compromise. This contention was overruled both in the executing Court and in two appellate Courts. After the appeals had failed, the surety filed applications under Sections 19 and 20 of Act IV. The application under Section 19 was dismissed in limine on the ground that the surety was riot a judgment-debtor entitled to maintain the application. Against this order the civil revision petition is preferred.
3. It is contended that by reason of Section 145 of the Code of Civil Procedure the decree becomes executable against the surety and for purposes of execution he is in fact in exactly the same position as a judgment-debtor and that there is no reason why to the extent to which he is an agriculturist entitled to relief under Act IV, he should not claim that relief by asking that the decree be scaled down under Section 19. Now it seems to us quite manifest that the surety, assuming that he is entitled to take proceedings under Section 19, must be limited to the relief which he can get with reference to the actual decree debt. But he cannot treat that decree as a renewal or inclusion in a fresh document of a previous debt due from himself and therefore there is no occasion for going into the origin of the two promissory notes upon which the decree was passed. The surety executed his bond in 1934 and it was in 1934 that the liability against him first became crystalised in the form of the decree which he had undertaken to satisfy. The liability of the surety therefore falls under Section 9 of Act IV and the proviso to that section has no bearing on the case.
4. Under Section 7, all debts payable by an agriculturist at the commencement of the Act must be scaled down in accordance with the provisions of the Chapter, notwithstanding any law, custom, contract or decree of Court to the contrary. From this it follows that on the admission that the surety is an agriculturist, he is entitled to a remission of interest on the decree debt to the extent laid down in the first part of Section 9. The only question is : what is the procedure by which the relief shall be given? Two courses might be open. It might be possible for the surety to plead in bar of execution the statutory relief to which he has become entitled; or it might be open to the surety to claim to be treated as a judgment-debtor and to get the decree amended under Section 19 by the Court which passed the decree, by the reduction of interest in accordance with Section 9. The respondents here have relied upon two judgments of a single Judge which seem to suggest that the proper procedure is by pleading the Act in bar of execution. The two cases are C.R. Ps. Nos. 1965 of 1939 and 1869 of 1939. We think the latter case has no bearing because it was a case in which the surety was a non-agriculturist. The former case does contain an observation that the surety cannot apply to have the decree amended under Section 19 though he might have a right to a reduction of interest on the amount treating it as a debt under Section 9. But the question really agitated in that case was not the procedure whereby the surety could get the decree for interest reduced, but the right of the surety to apply under Section 19 to get the substantive liability scaled down on the basis of the antecedent debt. To the extent to which the observations in C.R.P. No. 1965 of 1939 appear to indicate that the procedure under Section 19 is not available to an agriculturist-surety, against whom a decree is being executed, to get the interest embodied in the decree reduced, we are of opinion that they are misleading. Since the surety is, for the purposes of execution in the position of a judgment-debtor, we see no reason why he should not be given the benefit of the procedure laid down in Section 19 for agriculturist judgment-debtors to the limited extent of the reduction or scaling down of interest under the decree with reference to the appropriate section of the Act having regard to the date on which the liability of the surety himself was incurred. In the present case, the matter is simple. Both the bond and the decree came into being in the course of 1934. It follows that the surety is entitled to the benefit of the first part of Section 9; that is to say, the amount of the debt both for costs and for the substantive portion of the decree will bear interest not at the rate of six per cent, as laid down in the decree but at the rate of five per cent, with effect from the date of the decree to 22nd March, 1938, subsequent interest being at the decree rate of six per cent.
5. The decree will be amended accordingly. As the petitioner has failed in his attempt to go behind the decree and scale down his liability with reference to the original notes, we think it proper to order that each party should bear his own costs.