1. The following three questions have been referred to this Full Bench by Somasundaram and Ramaswami, JJ. :-
1. Whether a debt incurred before 1-10-1937 is not a debt payable by an agriculturist at the commencement of this Act (22-3-1038) within the scope of Section 7 of the Madras Agriculturists Relief Act, IV of 1938 if the due date for payment is later than 22-3-1938.
2. Whether deposit or other sum payable on a demand is a 'debt payable by an agriculturist at the commencement of this Act' notwithstanding that the creditor has not made the demand for payment on or before 22-3-1938.
3. Whether the conditions necessary for the application of Section 19 (2) to a debt in respect of which a decree has been passed are the same or Different from those applicable under Section 7 of the Act.
2. This reference came to be made under the (following circumstances. One Arunachalam Chettiar was carrying on money lending business in partnership with his two sisters and another Subramaniam Chettiar, at Bagale in Burma prior to 1916. After Arunachala died in 1916 Subramania carried on the business with the remaining partners.
The amount due to Arunachala was ascertained as Rs. 10824-3-3 and it was credited in the nadappu account of the firm. Subramania died in 1924 and thereafter the business was continued by his wife in partnership with one Palaniappa and others, Palaniappa in his turn died in 1,930 and thereafter his sons who are defendants 1 and 2 in the suit out of which this litigation emanates were substituted in his place and the business was being carried on. In 1935 disputes arose among the partners.
By this time the sum of Rs. 10824 and odd invested in 1916 as due to Arunachala had swelled into Rs. 55933-15-0. According to an award of the arbitrators passed on 31-7-1935 this amount was apportioned between Arunachala (adopted son of Subramania) and his sister and defendants 1 and 2. Arunachala and his sister got Rs. 34958-4-6 and defendants 1 and 2 got Rs. 20975-3-0. O. S. No. 13 of 1944 on the file of the Sub-Court, Devakottai, was instituted by the adopted son of Arunachala against defendants 1 and 2 who are the sons of Palaniappa, one of the partners of the firm for recovery of Rs. 20975-3-6, with interest thereon. That suit was dismissed. Against the dismissal of that suit A. S. No. 254 of 1946 was preferred to this Court in 19'46 by the plaintiff.
On 9-3-1951 this appeal was allowed and the suit was decreed substantially as prayed for by the plaintiff. On 5-10-1951 I, A. No. 1187 of 1951 was filed in the trial Court by defendants 1 and 2 for the scaling down of the decree debt in accordance with the provisions of Madras Act IV of 1938. That application was dismissed by the trial Court on 26-3-1952. Against that order C. M. A. No. 721 of 1952 was filed to this Court on 4-7-1952. C. M. P. No, 6577 of 1952 was also filed in this Court for the scaling down of the decree debt in the view that if the trial Court had no jurisdiction to scale down the decree debt this Court should do so.
On 25-3-1953 a Bench of this Court dismissed this civil miscellaneous petition and the Supreme Court on appeal reversed that decision and remanded the matter and the civil miscellaneous appeal C. M. A. No. 721 of 1952 for disposal by this Court, Thereupon the Bench dealing with the matters in question Called for findings from the trial Court on four points and accepted the finding submitted by trial Court on the question that the petitioner in C. M. P. No. 6577 of 1952 was an agriculturist entitled to the benefits of the Madras Act IV of. 1938.
3. The next question to be considered by the Bench was whether the debt had to be scaled down under Section 8 (2) or S (1) of the Act, On the strength of the decision of this Court in Ramanathan Chettiar v. Ramanathan Chettiar, (FB) it was contended before the referring Bench that the debt in the present case could not be scaled down under Section 19 (2) of the Madras Act IV of 1938, by reason of the fact that the debt in this case was not payable at the commencement of the Act and could not, therefore, fall within the definition of a 'debt' contemplated under Section 7 of the said Act. As the referring Bench felt a doubt as to the correctness of the ruling in (FB) the questions mentioned at the beginning of this judgment have been referred to us for decision,
4. The salient facts may be stated in order to appreciate the contentions of the parties. The deposit was made in 1916 in a partnership firm. In 1935 this deposit was split up under an award of the arbitrators and the defendants in the suit became liable for the sum of Rs. 20975 and odd, as deposit. On 4-2-1944, the suit was filed and it was dismissed on 18-2-1946. On appeal the suit was decreed in full on 9-3-1951 for the entire claim in the plaint.
It is common ground that the transaction in this case was a deposit and that a demand for payment of the deposit as contemplated in Article 60 of the Limitation Act was made sometime in 1941, that is after the Madras Act IV of 1938 had come into force. Both the learned Advocate-General appearing for the appellant and Mr. Viswanathan appearing for the respondent agreed that question No. 3 referred to us did not really arise separately for consideration.
But the answer to questions 1 and 2 depends upon the interpretation of the phrase "All debts payable by an agriculturist at the commencement of this Act" occurring in Section 7 of the Act. Section 19 (2) of the Act was introduced by the Amending Act XXIII of 1948 which came into force on 25-1-1949 for the specific purpose of enabling Courts to scale down decrees passed after Madras Act IV of I93S had come into force. The expression "a debt payable at such commencement" occurring in Section 19(2) of the Act, it is common ground, merely refers back to the category of debts indicated in Section 7 of the Act, and does not by itself introduce a new classification of debts.
5. Before we advert to the arguments addressed to us we may notice the relevant statutory provisions: Section 3(iii) of the Act defines debt thus;-
" 'Debt' means any liability in cash or kind whether secured or unsecured due from an agriculturist, whether payable under a decree or order of a civil or revenue Court or otherwise but does not include rent so defined in Clause (iv) or kanartham as defined "in Section 3 (1)(i) of the Malabar Tenancy Act, 1929."
Section 7 of the Act so far as is relevant for the purpose of the present case is in these terms.
"Notwithstanding any law, custom, contract or decree of Court to the contrary, all debts payable by an agriculturist at the commencement of this Act, shall be scaled down in accordance with the provisions of this Chapter...."
In indicating the manner of scaling down the debts falling under Section 7 of the Act, Sections 8 and 9 fix the date of the incurring of the debt as the criterion. Section 8 deals with debts incurred before the 1st! October 1932 while Section 9 deals with debts incurred on or after the 1st October, 1932. Section 13 of the Act provides for the rate of interest payable by an agriculturist on new loans. It enacts that all interest due on any debt incurred by an agriculturist after the commencement of the Act shall be scaled down so as not to exceed a sum calculated |at 6 1/4 per cent per annum simple interest .... or at such other rate of interest as may be notified by the State Government in the official gazette from time to time,
6. The learned Advocate General for the applicant contends that the term "debt payable by an agriculturist at the commencement of this Act" (Act IV of 1938) should be construed as a debt owing by an agriculturist on the concerned date irrespective of the fact whether the debt had become eligible or not.
7. Mr. Viswanathan learned counsel for the respondent on the other hand contends that this phrase can only apply to debts which had become exigible at the commencement of the Act, that is 22-3-1938 and he refers to the language of Section 19 (2) of the Act in support of his contention that the phrase "the debt payable at such commencement" could have no reference to liabilities which had not become accrued and in respect of which a cause of action had not arisen.
8. Before referring to the authorities cited on both sides, we may at the outset mention that the term "payable" in connection with a debt has both, a primary and a secondary meaning or in other words, a basic and an extended meaning The moaning of the word "payable" is thus given in the "Shorter Oxford Dictionary", "of a sum of money, bill etc., that has to be paid; due, falling due (usually at or on a specified date or to a specific person)." In the dictionary of English law, by Earl Jowitt the meaning of the word "payable" is thus rendered:-
"A sum of money is said to be payable when a person is under an obligation to pay it. Payable may, therefore, signify an obligation to pay at a future time but when used without qualification, payable means that the debt is payable at once as opposed to owing."
These authorities confirm our opinion that the term "payable" has two meanings (1) owing and (2) payable at a particular point of time, and when this expression is used without any qualification it generally means payable at once. "Due and payable" is a common expression which we find in many of the statutes and the term "due" always connotes a debt being payable or owed. If the basic meaning of the word payable is attributable to the Clause in question we must hold that all debts owing by an agriculturist at the commencement of the Act would be liable to be scaled down under Section 1 of the Act, but if we construe this term in the other sense of being payable that is to say, exigible or enforceable at the commencement of the Act different results would follow.
Where two meanings could be attributed to an expression or phrase occurring in a statute we should have recourse to an interpretation which would give the appropriate meaning in the context in which the phrase occurs. As early as Heydon's case, 1584-3 Co Rep 7a the Court of Exchequer has laid down the following rules for interpretation of statutes and particularly statutes which are beneficial in character; (1) What was the common law before the making of the Act; (2) what was the mischief and defect for which the common law did not provide: (3) what remedy the Parliament had resolved and appointed to cure the disease; and (4) the true reason of the remedy. Occasions for the application of these rules had constantly come up before English Courts and it would therefore be pertinent to refer to a few of the English decisions wherein these rules have been explained. Sir John Nicholl M. R. stated as follows in Brett v. Brett, 1826-3 Add 210 at p. 216:-
"The key to the opening of every law is the reason and spirit of the law; it is the aninus impotents; the intention of the law maker expressed in the law itself taken as a whole. Hence to arrive at a true meaning of any particular phrase in a statute the particular phrase is not to be viewed detached from its context in the statute. It is to be viewed in connection with its whole context; meaning by this as well the title and preamble as the purview or the enacting part of the statute."
In Rein v. Lane, 1867-2 QBD 144 at p. 151', Blaclnmra J. said:
"It is I apprehend in accordance with the general rule of construction that you are not only to look at the words but you arc to look at the context, collocation and the object of such words relating to such matter and interpret the meaning according to what would appear to he the meaning intended to be conveyed by the use of the words under the circumstances."
In re, Regent Street (No. 12) Oxford, 1948 Ch. 735 at p. 746, Jenkins, J. stated thus:
"In the construction of a statute, it is, of course, at all times and under all circumstances permissible to have regard to the state of things existing at the time the statute was passed, and to the evil which as appears from its provisions it was designed to remedy."
We hold that these principles are applicable to this case and in that view we can refer to the purpose of the legislation in question. Undoubtedly, Act IV of 1938 was intended to give relief to indebted agriculturists and to restrict the rate of interest payable by them and the method adopted for achieving the object was to scale down the debt in most cases by giving relief against interest out-standing and in other cases even by wiping of the debt where repayments had exceeded twice the principal sum borrowed. For giving such relief the scheme of the Act created a dichotomy between the debts incurred before the commencement of the Act and those incurred thereafter.
There was also a sub-division of the debts incurred before the commencement of the Act with reference to the date 1-10-1932. Having regard to the various provisions of the Act, the overriding intention of the legislature is clearly discernible and that was to give relief to the agriculturist in respect of his debts, which were outstanding and unextinguished at the commencement of the Act, under the process of scaling down indicated in Ss. 8 and 9 of the Act.
To accept the construction of the term "payable" which commended itself to the Bench which decided, (FB), one should
attribute to that pharse the meaning that the debt in question should be enforceable at the commencement of the Act. The ratio decidendi of the learned Judges who constituted the Bench is contained in the following passage:
"But the question in the present case is whether the debt was one which would come within the provisions of Section 19(2) of the Act, Section 19(2) restricts the powers of amendment by the Court to a case where the debt was payable before the commencement of the Act.
We have already referred to the fact that in the present case the decree was passed on the basis of a deposit made by the appellant's father with the respondent's father and that the demand for the return of the money was made on 2-10-1944. If the debt became payable only on demand it would follow that there was no decree in respect of a debt payable at the commencement of the Act (IV of 1938). To such a case the provisions of Section 19(2) would not in terms apply. It becomes, therefore, relevant to consider the nature of the deposit and when it becomes payable,"
With all respect to the learned Judges, we Consider that in thus posing the question for decision they did not pay attention to the context of the "payable at the commencement of the Act," occurring both in Section 19(2) and Section 7 of the Act. The learned Judges referred to the decision in Joachim-son v. Swiss Bank Corporation, 1921-3 K. B. 110 and other decisions to hold that in the case of a. deposit payable on demand the demand was essential to make the debt payable and enforceable and consequently before the demand was made such a debt could not he said to be payable. We have no quarrel with the proposition of law laid down in Joachimson's case that a deposit which under the terms of the contract was payable only on demand could be used for only after the demand was made.
The scope of the rule in this case was considered in Arab Bank Ltd. v. Barclay's Bank, 1954 A. C. 495. Certain observations occurring in his judgment seem to us to be apposite. In order to under these observations it is necessary to set out the facts of the case briefly: In 1939 the Arab Bank opened a current account with the Barclay's Bank at its Jerusalem branch and deposited a certain sum of money,. The mandate held by Great Britain over Palestine expired by the midnight of May 4, 1948. Immediately thereafter war broke out between Israel and the Arab states and by reason of the hostilities in Jerusalem performance of contract became impossible.
The branch of Barclay's bank at Jerusalem was closed on the day previous to 14th March 1948 and did not reopen until July 1948. In October 1950 the Arab Bank sued ,the Barclay's bank for repayment of the amount standing to its Credit in the current account as money had and received to its use on the ground that the contract had been frustrated by the outbreak of the war. Barclay's bank had paid the amount of the credit balance to the Custodian of the properties of the absentees appointed under the legislation of the State of Israel.
On these facts the House of Lords held that the right to be paid the credit balance survived the outbreak of war, and remained intact subject to the legislation of the State of Israel and that since the amount was legally paid to the custodian it would not be recoverable by the Arab Bank from the Barclay's Bank. After referring to the rule laid down in Joachimson's case, 1921-3 KB 110, the House of Lords held that in spite of the rule which prohibited the bringing of an action for repayment of the deposit before a demand could be made, the right to recover the debt was not destroyed merely because no action could be brought to recover the debt without a previous demand. Lord Reid in speaking of this right of the creditor described it in these terms:
"At one stage of this case the appellants, maintained that they had made a demand for payment before the outbreak of war but they did not now maintain that and therefore the position is that at the outbreak of the war they had no cause of action against the respondents hut in my judgment that does not mean that there was no debt owing to them by the respondents. The sum at their credit was immediately payable to them. It is true that it was only payable in a particular place and that to get the money they had to go there and ask for it but the case is in my opinion quite-different from a case where one party still has to perform some service or fulfil some obligation under the contract in order to earn the money..... But the sum to the credit of a customer on Current account has always been regarded as a debt duo by the bank to the customer."
Jleferring to Joachimson's case, 1921-3 KB 110 the learned Judge observed thus:
"Indeed I think that in Joachimson's case, 1921-3 KB 110 Atkin L. J. recognised that there is a debt before any demand for payment is made."
This decision clearly recognised that a debt may be payable but still not enforceable at a particular point of time. If we understand it aright the rule laid down in Joachimson's Case, 1921-3 KB 110 only serves to obviate the necessity of the customer suing for the return of every item of deposit under peril otherwise of its recovery being barred by limitation. Mr. Viswanathan contended that the term "payable" by itself may be of neutral significance but in the phrase we have to consider it occurs in conjunction with the point of time at which the debt became payable. From this he argued that the term "payable" had been used in this phrase only in the sense of being exigible "or enforceable or recoverable at a particular point of time.
He instanced his argument by referring to a mortgage debt the payment of which was specifically provided by the mortgage deed to be due on a date occurring beyond the date of the commencement of Act IV of 1938 and posed the question how could such a mortgage debt be payable at the commencement of the Act, while the contract itself provided that it was payable at a future date. Our short answer to this argument; is that the term "payable" in the context of Sections 7 and 19(2) of Act IV of 1938 can only mean owing, and not exigible, Mr. Viswanathan referred us to some decisions in connection with the construction of the term "payable". The first decision he referred to is the Delhi Cloth General Mills and Co. v. Harnam Singh, . We are unable to find any assistance from this judgment which does not deal _ with any analogous question. He next referred to I the decision, In re Bihar Bolts, Rivets and Engineering Works, . The question for consideration in that case was whether the words "due and payable" occurring in Section 530(1)(a) of the Indian Companies Act, 1956 would apply to a payment of arrears of sales tax payable by a company in liquidation, Sahai J. held that the word "due and payable" were not synonymous and having regard to the facts of that case he held that the debt in question was entitled to priority under Section 530(1)(a) of the Companies Act, since the arrears of tax became payable within a period of 12 months indicated in that provision, though the debt had accrued long prior to that period.
The words used in this enactment (the Companies Act) have no resemblance to the words used in the sections which we are now called upon to interpret. In innumerable decisions of this court ever since the Act IV of 1938 was put on the statute book this court has taken the view that all debts outstanding and due by an agriculturist whether payable or not in the sense of being enforceable at the commencement of the Act could be scaled down under the Act. Even debts repayable by instalments some of which fell due after the date of the commencement of Act IV of 1938 have been seated down and as an instance we may refer to the decision in E. Pichayya J. G. Venkataranga Rao, 1944-1 Mad LJ 52 : (AIR 1944 Mad 243). To hold that all these decisions of this court were wrongly decreed we must have more convincing reason than the argument of Mr. Viswanathan that the literal interpretation of the words "payable at the commencement of the Act" should be adopted by us in preference to the interpretation which ac-cords with the context and the stated object of the legislation.
To hold otherwise would mean that the provisions of the Act though intended to give relief to agriculturists from their indebtedness is confined to cases where such debts were enforceable in any court of law at the commencement of the Act and that the Act left out of its purview the class of cases in which debts though incurred before the Act became enforceable through the medium of law courts after 22-3-1938.
9. The word "due" occurring in the definition of debt in Section 3(iii) is a term of wide import and according to the dictionary of English law it means'
"anything owing, that, which one contracts to pay or perform to another, that which law or justice requires to be paid or done. As applied to money "due" means either that it is owing or that it is payable. In other words, it may mean that the debt is payable at once or at a future time."
Having regard to this we have no doubt that the term "due" occurring in Section 3(iii) of the Act can only be given its extended meaning and not the restricted meaning.
Consistent with this definition of debt due by an agriculturist we can only apply, the primary meaning of the word payable, in interpreting the phrase "debt payable at the commencement of this Act" occurring both in Sections 7 and 19(2) of the Act. To hold otherwise the learned Judges who decided Ramanathan Chettiar's case, (FB) referred to Govindasami Gounder v. Ramaswami Gounder, 1958-2 Mad LJ, 185, Bancharam Majumdar v. Adyanath, ILR 36 Ca!. 936 (FB) and other cases. In the Govindasami Gounder's case, 1958-2 Mad LJ 185 the suit was laid on a promissory note which was executed subsequent to the commencement of Act IV of 1938-The interpretation placed in that decision upon the expression "payable at such commencement" cannot have any relevance to the point which we are called upon to decide.
In the Bancharam's case, ILR 36 Cal 936 (FB), the question arose whether the debt was in existence when it was still not payable for the purpose of deciding whether a certificate for its collection could be issued under the Succession Act. The Bench distinguished this decision on the ground that the decision merely held that the debt in that case was payable but that had no relevance to the question, whether it was a debt which would come within the provisions of Section 19(2) and Section 7 of the Madras Act IV of 1938.
This decision also, in our opinion, does not touch the point we have to decide. The other decisions relied on by the Bench, viz., Mohammed Akbar Khan v. Attar Singh, 71 Mad LJ 712 : (AIR 1936 PC 171) and Ramaswami Chetti v. Manickam Chettiar, 1938-1 Mad LJ 56: (AIR 1938 Mad 236) are cases which arose under Article 60 of the Limitation Act and dealt with the point whether in the case of a deposit made to a banker under the condition that the deposit would be payable on demand the amount would be payable without any demand being made for it. This is not the point which we are Called upon to decide.
10. In our opinion, (FB) in holding otherwise on
questions 1 and 2 was wrongly decide and we answer questions 1 and 2 in the affirmative.
11. The papers will be returned to the Bench for disposal of C. M. P. No. 6577 of 1952 and the civil miscellaneous appeal C. M. A. No. 721 of 1952 in the light of the opinion expressed by us.
(This case having been called on this day, 3rd May 1960, after the expression of the Opinion of the Full Bench, the Court (Somasundavam and Ramaswami JJ,) delivered the following Judgment.)
12. On the return of the answers of the Full Bench, the only question remaining to be decided is whether Section 8 (2) or Section 8 (1) of the Act will apply to the instant case.
13. That Section 8(2) will not apply is evident from the following circumstances, viz., this is not a case where we can apply Section 47 of the Partnership Act, because the firm is not an agriculturist and the partners are not agriculturists. Therefore, the payment made by the one cannot be deemed to be on behalf of the others also. It is clear therefore that Section 8(1) alone will apply.
14. In regard to Section 8(1), the original principal amount is Rs. 10824-3-3, and in this connection it may be pointed out that in the plaint itself this sum is mentioned as the original principal amount on the foot of which calculations have got to be made. In this, the defendant's 3/8th share is Rs. 4059.07 np. It was sought to be argued that we cannot' make this apportionment. But, as a matter of fact, it is seen that the defendant's 3/8th share has been clearly separated and we cannot make him responsible for the shares of the others.
15. On that amount interest has to be given at Rangoon nadappu bank rate from 1-10-1937 to 1-4-1960, which so far as the information at our disposal goes is 3 per cent. That will add an amount of Rs. 2740.48 np. The total amount therefore due on 1-4-1960 will be Bs. 6799.55 np.
16. To this amount will have to be added costs which have already been granted to the respondent and which, of course, cannot be scaled down.
17. The appellant will be entitled to the costs of the Supreme Court which have already been granted to him and also the costs before us as well as the Full Bench.
18. We issue a decree in these terms m C. M. A. No. 721 of 1952 and this will also govern A. S. No. 254 of 1946. We make it clear that the costs granted to the plaintiffs will stand and no separate costs are being awarded to the respondent therein by means of this order.