S. Ramachandra Iyer, C.J.
(1) This is an appeal from an order of the Subordinate Judge, Salem, scaling down a mortgage decree by applying the provisions of S. 13-A of the Madras agriculturists Relief act, 1938 (to be referred hereafter as the Act). Substantially, two questions fall for determination in the appeal: the first of them has given rise to this reference. They are:
1. Whether S. 13-A of the Act, which provides for a ceiling rate of interest, in regard to a debt payable by a certain category of non-agriculturist debtors, will apply to debts incurred by such persons prior to its Act;
2. Whether the provisions of S.19(2) of Act can be availed of by a non-agriculturist debtor coming within the scope of S. 13-A, in order to scale down a decree passed against him.
It is not disputed that the respondent, who applied to the lower court for relief under the provisions of the Act, owns an interest in agricultural lands and she would come within the definition of an 'agriculturist' as defined in S. 3(ii)(a) of the Act but for the fact that her case fell within clauses (B) and (C) of the proviso to that sub-section, in as much as she had been assessed to property period.
(2) Section 13-A was introduced into the Act by the Amending Act XXIII of 1948. That section says:
'Where a debit is incurred by a person who would be an agriculturist as defined in S. 3(ii) but for the operation of proviso (B) or proviso (C) to that section, the rate of interest applicable to the debt shall be the rate applicable to it under the law, custom, contract or decree of court under which the debt arises or the date applicable to an agriculturist under S. 13, whichever rate is less.'
The effect of this provision is to give the benefit of the reduced rate of interest to debtors who have an interest in agricultural lands as defined in S. 3(ii) but who could not avail themselves of the benefit either because they pay profession or property tax over a specified amount to a Local Authority.
(3) The facts giving rise to the present appeal are these. Kalia Pillai, the husband of the respondent, executed between the years 1929 to 1931, three mortgage deeds in favour of the first appellant and his father to secure three sums of money, in all amounting to Rs 70,000, advanced by the latter. Kalia Pillar had created a security under the documents over a large extent of agricultural lands. The mortgages bore interest at 9% per annum with three monthly rests, there being an agreement to pay interest at 15 per cent per annum in case of default. Although a considerable sum of money, amounting a little over Rs. 87, 000, had been paid either in cash or by sale of certain items of mortgaged properties to the mortgagees, it was found that a sum of Rs. 1,46,561-15-6 was due by the year 1948, and a suit (O. S. No. 8 of 1948) was instituted by the appellants in the lower court for realising that amount. Even two years earlier, the respondent, wife of the debtor Kalia Pillai, had purchased the mortgaged properties in execution of a money decree against her husband. She was impleaded as a party to the mortgage suit along with her husband. Neither Kalia Pillai nor his wife was an agriculturist entitled to the benefits of Act IV of 1938, at the time when the suit was instituted, though, as we shall show presently, the amendment introduced into the Act during the pendency of the suit entitled either or both of them to certain reliefs under S. 13-A.
(4) On 31-7-1950 the suit was compromised between the parties on the following terms. The debtor were to pay a sum of Rs. 70,000 towards principal and interest thereon at 71/2 per cent per annum from 2-10-1943 in three equal instalments within a period of six months. In case of default, the debtors should pay the sum of Rs. 70,000 with interest thereon at 9 per cent per annum. These amounts were to be added to the costs decreed, the appellants being entitled to recover the amounts due by sale of the mortgaged properties. In this basis, the sum due to the appellants was ascertained to be Rs. 1,11,738-7-0, inclusive of interest and costs upto 31-7-1950; there was a mortgage decree for it. The debtors did not pay as stipulated in the compromise, and a final decree was passed on 6-4-1951. Shortly there after, Kalia Pillai died.
(5) During the pendency of the mortgage suit and even before the passing of the preliminary decree in the terms of the compromise, the Madras Legislature introduced certain amendments, by Act XXIII of 1948, into the main Act, S. 13-A being one of them The amendments came into force on 25-1-1949. Section 16 of the Amending Act, which alone remained unincorporated into the main Act, provided for the categories of cases to which the benefit conferred by the amendment would apply. That section states:
'The amendments made by this Act shall apply to the following suits and proceedings, namely:
(i) all suits and proceedings instituted after the commencement of this Act;
(ii) all suits and proceedings instituted before the commencement of this Act, in which no decree or order has been passed, or in which the decree or order has not become final, before such commencement;
(iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act;
Provided that no creditor shall be required to refund any sum which has been paid to or realised by him before the commencement of this Act.' It has now been settled that the three clauses referred to above are disjunctive, each of them relating to a distinct category, so that a case fallen under one head will not fall under another; Vide Narayanan Chettiar v. Annamalai Chettiar, : AIR1959SC275 and Ramanathan Chettiar v. Ramanathan Chettiar, : AIR1960Mad207 (FB). As we stated, in the instant case, the preliminary decree was passed subsequent to the coming into force of the amendments introduced by Madras Act XXIII of 1948. The said decree not having yet been satisfied, the case would be covered by sub-clause (ii) of S. 16 of the Amending Act.
(6) The respondent, who did not claim the benefit of S. 13-A at the time of the passing of the preliminary decree, applied in the year 1957 in I. A. 670 of 1957, purporting to do so under S. 19(2) of the Act, for amendment of the compromise decree conformably to Sec. 13-A. She claimed that the amount due under the three mortgage deeds, which was later superseded by the compromise decree, should be scaled down by applying the provisions of S. 13-A, and that, after giving credit to the payments made a balance of Rs. 927-8-0 alone should be treated as still due under the decree. The application was contested on several grounds by the decree-holders. The learned Subordinate Judge, however, accepted the application and scaled down the Deere accordingly.
(7) The procedure adopted by the learned Subordinate Judge had the effect of even annulling the appropriations to interest made at the contract rate, which had been made by the appellants prior to the coming into force of S. 13-A. We are by no means sure that this can be done.
(8) It was contended before the lower court on behalf of the appellants that the respondent being the owner of Muthalapatti Mitta and Alagiagoundan Palayam inam village, in respect of which there was a payment of Beriz of Rs.879-5-3 per year, she would not be an agriculturist by reason of proviso (D) S. 3(ii) of the Act. The learned Subordinate Judge overruled the contention for the reason that the respondent was not the sole owner of the two Inam villages, and that the Mitta has since been taken over by the Government under the Estates Abolition Act.
(9) Before us, an application C. M. P. No 6636 of 1961 has been filed by the appellants to receive certain additional documents as evidence in appeal, to prove that the respondent had admitted that she was the sole owner of the Mitta. There is no satisfactory explanation as to why these documents were not filed in the lower court. We are not, therefore, prepared to admit the documents C. M. P. No. 6636 of 1961 will be dismissed.
(10) Before the learned subordinate Judge it was contended on behalf of the appellants that S. 13-A would govern only debts contracted after the coming into force of the Act, and that as in the present case the mortgage liability commenced as early as 1929, the restrictions imposed by that section, in regard to stipulation for interest, would not apply. The learned Subordinate Judge did not accept the contention and his view is supported by a decision of a Bench of this court in Govindaraja Nadar v. Namadevar Reddiar, 1956-2 Mad LJ 425. It was held in that case that the provisions of S 13-A will apply not merely to debts incurred after the Act. but also to those incurred prior thereto.
(11) It will be seen from the terms of the section, which we have quoted at the beginning, that it applies only to cases where a debt 'is incurred' by the class of debtors specified in that section. The learned Judges came to the conclusion that the literal and plain meaning of the words 'where a debt is incurred by a person' was 'a debt which had been incurred.' But no reasons have been given in the judgment as to why such substitution of the words are necessary for a proper understanding of the section.
(12) The words 'is incurred' are precise, plain and unambiguous. It will, therefore, be the duty of the court, which is called upon to interpret the section to adhere to the ordinary grammatical meaning of the words and no to modify the same on any assumed theory of legislative intention or of beneficent interpretation. In Bellantine's Law Dictionary the word 'incur' is interpreted to be 'become subject to or liable for, by one's act or by operation of law'. Thus, the clause 'where a debt is incurred by a person' occurring in S 13-A can only refer to a present or future liability. Prima facie, therefore, the section can only relate to a monetary transaction coming into existence subsequent to the passing of the Act. The decision in In re Pulborough Parish School Board Election; Bourke v. Nutt, 1894-1 QB 725 furnishes a useful guidance in regard to the matter. Under the Bankruptcy Act, 1883, a debtor who is adjudged bankrupt' shall be subject to certain disqualification's therein specified. It was held by a majority of the Judges in the court of appeal, that the specified disqualifications could not attach to a person who had already been adjudged a bankrupt before the passing of the Act. Lopes L. J. pointed out that if the words 'where a debtor is adjudged bankrupt' occurring in the section were to be read as including a case of adjudication made prior to the Act it would really be to distort the ordinary and natural meaning of words. Davey L. J. observed:
'............reading those words alone, and apart from considerations arising out of the subject matter of the section in which they occur, I should certainly understand them (according to the ordinary use of the English language) to mean, if any man shall or may hereafter be adjudged bankrupt; and unless there be some controlling context in the Act or in the section, I hold that to be the meaning of the words. It has been suggested that the words may be read as meaning 'where a man is an adjudicated bankrupt'. The answer seems to me to be that those are not the words before us, and that the words we have to construe are grammatically different. I think the words 'is adjudged' are the verb, whereas in paraphrase suggested the word 'adjudicated' would be an adjective. The one form of sentence points to an event to happen, whereas the form suggested predicates a certain quality of the subject which may just as well attach to him by a previous adjudication as by a subsequent one. Now, is there any context to be found in the Act itself which should control what Hold to be the prima facie meaning of the words?'
We shall presently consider whether there is anything in the Madras Agriculturists Relief Act to compel us to construe the words 'is incurred' as equivalent to 'has been incurred'.
(13) The rule of interpretation laid down in the decision referred to above, was adopted by a Full Bench of this court in Palaniswami Gounder v. Davanal Ammal, : (1956)1MLJ366 : ((S) AIR 1956 Mad 337 where a question arose about the interpretation of the words 'if he marries again' in S. 2(4) of the Hindu Married Women's (Right to Separate Residence and Maintenance) Act, 1946. Previous to that decision there was a sharp divergence of opinion as to whether the words 'if he marries again' would apply to cases of second marriage solemnised even before the commencement of that Act or whether it would only apply to case of second marriage taking place after the commencement of the Act. The full Bench accepted the latter interpretation.
(14) Section 13-A does not itself say, either expressly or by way of implication, that it should apply to debts incurred prior to the Act. There is nothing in it to warrant an interpretation different from what the use of the present tense implies.
(15) Mr. Ramamurthi Aiyar appearing for the respondent argues that if the legislature had intended a mere prospective operation to S. 13-A, it would have used words like 'any debt incurred after the commencement of this Act', as it did in S. 13 and that, therefore, the difference in the language employed in Ss. 13 and 13-A should be assumed to reveal an intention on the part of the legislature to make the latter section applicable to all debts, whenever incurred by the class of persons specified in that section.
(16) It is, however, not possible to draw any inference from the difference in the language employed in the two sections; they were not enacted at the same time. Again it could be argued with equal force that if the legislature really meant that the latter provision should apply to all debts incurred by the persons specified therein, it could have certainly used appropriate words. It must be remembered that the primary object of the Act was to give relief only to indebted agriculturists--non-agriculturist contracts were outside the original enactment. The relief granted to them varied with the extent and accumulation of the liability. For example, with respect to debts incurred prior to 1-10-1932, the entire interest outstanding was statutorily wiped out. There were also provisions for reopening renewals of debts and scaling down the liability of the agriculturist debtor with reference to the original debt. In respect of debts incurred after 1-10-1932, but before 22-3-1938, (the date when the Act came into force) the creditor was declared entitled to recover only interest at 5 per cent per annum or at the contract rate, whichever was less. Section 13 relates to debts incurred by an agriculturist after the coming into force of the Act, providing that in respect of debts incurred by an agriculturist after the Act the interest stipulated shall not exceed 61/4 per cent per annum. That rate was later reduced to 51/2 per cent per annum.
The Act in its original form did not, in terms, afford relief to any person other than an agriculturist. But the application of it enabled certain non-agriculturist debtors to obtain fortuitous benefit by reason of the statutory wiping out of the debts payable by an agriculturist debtor to obtain fortuitous benefit by reason of the statutory wiping out of the debts payable by an agriculturist debtor. That was purely as a result of the operation of the provisions of the Act in favour of the agriculturist. The amending Act XXIII of 1948, for the first time, enabled certain class of non-agriculturist debtors to abstain certain benefits. That legislation came into force more than ten years after the original act and it could not in any sense, be regarded as a part of the scheme of relief envisaged by the original Act.
(17) Section 13-A is, in essence, a separate enactment giving relief to certain owners of agricultural lands who did not come within the purview of the main Act. No inference can therefore be drawn by reason of the difference in language employed in that section and those contained in the main Act before its enactment.
(18) It is a well recognised principle in the construction of statutes that they should operate only prospectively that is, to cases and facts which come into existence after the date of the statute, unless a retrospective effect is intended. This rule will have particular application in a case where the statute is expropriatory in its operation Section 13-A imposes a new restriction on the procedure of contract in favour of debtors, who are not agriculturists. Unless, therefore, the statute clearly indicates that it should govern contracts entered into prior to the coming into force of that section it can be read as applying only to transactions coming into existence after the Act. Even if one were to assume that S. 13-A is either obscure or ambiguous, the rule of construction will be the same namely, that there will be a presumption against retrospectively. It is now a well-settled rule that where the words of a statute admit of two constructions, that construction which produces a prospective, rather than a retrospective, effect should alone be adopted. Now let us consider the power of the court to construe a statute by modifying its terms or importing words thereto. Craies on 'Statute law ' 5th Edn. states at page 82:
'It is clear that 'if'' as Jervis C. J. said in Abley v. Dale, (1850) 20 LJCP 33 'the precise words used are plain and unambiguous, we are bound to construe them in their ordinary sense, even though it does lead to an absurdity or manifest injustice. Words may be modified or varied where their import is doubtful or obscure, but we assume the functions of legislators when we depart from the ordinary meaning of the precise words used, merely because we see, or fancy we see, an absurdity or manifest injustice from an adherence to their literal meaning.'
Again at page 84:
'The general rule' said Willes J in Christopherson v. Lotinga, (1864) 33 LJCP 121 'is stated by Lord Wensteydale in these terms--viz. to adhere to the ordinary meaning of the words used, and to the grammatical construction, unless that is at variance with the intention of the legislature, to be collected from the statute itself or leads to any manifest absurdity or repugnance, in which case the language may be varied or modified so as to avoid such inconvenience but no further' 'I certainly' continued Willes J. 'subscribe to every word of the rule, except the word 'absurdity' unless that be considered as used there in the same sense as 'repugnance' that is to say, something which would be so absurd with reference to the other words of the statute as to amount to a repugnance'
The plain words used in S. 13-A 'where a debt is incurred' indicating as they do the incurring at present or in future a liability, cannot, by any means, be said to be either obscure or one where if their literal meaning were applied would lead to manifest injustice of repugnance to the scheme of the statute. On the other hand, there are sufficient indications in Act XXIII of 1948, of which S. 13-A formed part (being S. 9 therein), to show that it was intended only to have a prospective operation. We have earlier referred to S. 16 of that enactment, which applied the amendments introduced by it to cases of decrees which had not been satisfies. In regard to agriculturist debtors, S. 10 of the Amending Act provided for amendment of decrees passed prior thereto. That section has now been incorporated as S. 19(2) in the main Act, and it runs
'The provisions of sub-section (1) shall also apply to cases where after the commencement of this Act, a court has passed a decree for the repayment of a debt payable at such commencement'. It has now been accepted that the expression 'after the commencement of this Act' in S. 19(2) refers to the original Act of 1938, and hence the benefit of scaling down of decrees under S. 19(2) of the Act will be applicable only to decrees passed after the date of the original Act with respect to a liability existing at the commencement of that Act, that is, 22--3-1938. Again, sub-section (1) and (2) of S. 19 apply to agriculturist debtors alone. If it was the intention of the legislature that agriculturists who cease to be so by reason of clauses (B) and (C) of the proviso to S. 3(ii), were entitled to the benefit of scaling down of their debts contracted prior to the coming into force of the Act, that is, 22-2-1938, it would not have restricted the operation of S. 19 to agriculturist alone. Again in other words the intention of the legislature that S. 13-A is not to apply to debts contracted earlier than the Act is manifest as S. 19 is not made applicable to the debts due by that class of debtors. It is therefore highly probable that the legislature did not intend that the benefit conferred by S. 13-A should apply to debts contracted prior to the Act.
(19) Section 13-A itself is placed in the statute book next to S. 13, which applies to liabilities incurred after the coming into force of the Act. Though this circumstance cannot be of much significance, it does, in view of what we have stated above, acquire some importance for the present discussion. In Ramachandra Mudaliar v. D. Tondamar, 1963 2 MLJ 338 referring to amendments of an enactment by introducing a section with a capital letter, it has been observed:
'A section introduced by way of amendment by the use of a capital letter added to the pre-existing numeral, cannot necessarily mean that it is a part of the main provision which bears the same numeral as the one subsequently introduced. The question whether the two sections are complementary to each other or that the latter is an exception to the former or they were independent provisions has not to be decided with reference to the subject matter dealt with by them.'
The considerations to which we have made reference earlier, compel us to hold that S. 13-A can relate only to the category of debts specified in S. 13, the benefit as to the rate of interest contained in that section being extended by it to a particular class of agriculturists who could not come under S. 13.
(20) We are therefore unable to accept that : (1956)2MLJ425 has been correctly decided. In our view the provisions of S. 13-A can be applied only to cases of debts incurred after the coming into force of Act IV of 1938.
(21) This view however, does not appear to dispose of the present case. Although the origin of the debt was under the three mortgages referred to earlier, there was a compromise of the claim on which a decree followed. The decree in terms of the compromise is, in effect, a decree on contract superseding the original debt upon which the suit was laid. By reason of the compromise the old obligations must be held to have merged into one under the compromise, which created fresh obligations. In other words, by reason of the agreement between the parties, there has been a discharge, as it were, of the pre-existing liability by the substitution of a new liability under the compromise decree. That would amount to a fresh debit except in cases where by statute a reopening of it is made permissible. That debit having been incurred after the coming into force of the Act, S. 13-A will apply to it. Under S. 13-A there is no question of tracing back the liability to an original debt. The section itself contemplates the application of its provisions to a decree. The decree in the instant case having been passed subsequent to the Act,. the rate of interest applicable to it will be governed by that provision subject to the question of res judicata to which we shall advert later. The respondent, therefore, will be liable to pay interest only at the statutory rate on the principal sum of Rs. 70,000 from 2-10-1943.
(22) The question then is, whether relief on that basis could be given to her in these proceedings.
(23) This leads us to the second question formulated at the beginning. The respondent applied to the lower court under the provisions of S. 19(2). That provision cannot obviously, apply to her case, as the debt in question (in the decree) could not be regarded as one due at the commencement of the Act, and, secondly, the respondent is not an agriculturist entitled to apply under that provision. In Venkatanarayana Rao v. Champalal Savansukha, : AIR1952Mad126 a debtor situate similar to the respondent herein was held not entitled to apply under Section 19-A for determination of the debt due by him. It was held that Section 13-A, while it had the effect of giving a reduced rate of interest to persons who would not be agriculturists within the definition contained in S. 3(ii), did not confer any new procedural right on him who did not have that right before the insertion of that section.
(24) Learned counsel for the respondent would, however, contend that in as much ad act XXIII of 1948, which enacted S. 13-A also enacted S. 19(2), the procedure provided in the latter section should be available to those claiming benefits under the former section. We are unable to accept that argument, as it runs counter to the very terms of Section 19(2). We are, therefore, of opinion that it would not be open to the respondent to apply for such relief, as she might be entitled to under the provisions of S. 13-A, by the amendment of the decree under S. 19(2) of the Act.
(25) Mr. Ramaswami Aiyangar, appearing for the appellants contends that in as much as it was open to the respondent to claim the benefit of the act in her defence to the suit, she, not having done so but having compromised the same, should be held to be precluded, by the principle of constructive res judicata, from agitating that claim over again. In : AIR1959SC275 the Supreme Court repelled a similar contention as being contrary to the terms of S. 16 of the amending Act. That decision is sought to be distinguished on the ground that S. 19(2) which applied to that case entitled the party to obtain his rights by amending the decree, notwithstanding any rule of res judicata. In the view we have taken, namely, that the compromise decree in the present case, which has for its basis the contract embodied in the compromise, was a fresh debt incurred by the respondent to the appellants, no question of constructive res judicata might perhaps arise as the compromise, on its terms, provides for payment of a sum of Rs. 70,000 together with interest at 9 per cent per annum. To that compromise, S. 13-A must apply. It is therefore needless to consider whether in respect of the original mortgage debt the benefit of that section can be claimed by the respondent in the circumstances of the case where a decree has been passed thereon.
(26) The statute has declared, that the liability to pay interest in respect of a debt contracted after the Act cannot exceed the rate specified in the section. Section 16(ii) of the Amending Act expressly says that the amendments introduced by the enactment will be available to a judgment debtor so long as the decree remained unsatisfied. But, unfortunately, there is no machinery provided under the Act for giving effect to the provisions of section 13-A. That the term of a decree as to interest has to be modified with reference to S. 13-A, whenever the case comes within it, can be held to be reasonably plain from the terms of that section itself.
(27) Again whenever a right is created by a statute, a remedy should exist under the law unless the statute itself has pointed out an exclusive remedy for working out the right so created. The following oft-quoted and classical passage in the judgment of Willes J. in Wolverhampton New Waterworks Co. v. Hawksford, (1859) 6 CB (NS) 336 may be usefully quoted in this connection.
'There are three classes of cases in which a liability may be established founded upon a statute. One is where there is a liability existing at common law and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of case is, where the statute gives the right to sue merely, but provides no particular form of remedy there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it-the remedy provided y the statute must be followed and it is not competent to the party to pursue the course applicable to cases of the second class.'
On our conclusion that the machinery provided by S. 19(2) will not be available to a party entitled to the benefits of S. 13-A, for scaling down the decree, the case must come under the second category of cases mentioned in that eminent Judge's judgment just now quoted. The respondent will, therefore, have the remedy in the ordinary courts for obtaining relief granted to her under the statute. It is some what doubtful whether the executing court can entertain a plea of this kind, contrary to the terms of the decree. But there is a duty on the decree-holder to reduce his claim in conformity with S. 13-A. If, however, the decree-holders do not reduce the amount of their claim in accordance therewith, but execute the decree according to the tenor of the decree, it must undoubtedly be open to the respondent to sue for damages, on the analogy of cases where a decree-holder proceeds to execute the decree without giving credit to a payment by the debtor which had not been certified. But the precise nature of the remedy available to the respondent to obtain relief, so for as the rate of interest on the decree amount is concerned, does not fall to be considered now and it is needless for us to investigate the matter further.
(28) We answer the two points which we set down for determination at the beginning of this judgment in the negative. The appeal, therefore, succeeds. We prefer not to make any order as to costs, having regard to the circumstances of the case, where the decree-holders have claimed more than what they are entitled to.
(29) Appeal allowed.