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Sri Hari Babu Naidu Vs. S. Alamelu Ammal - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai High Court
Decided On
Reported in(1980)2MLJ115
AppellantSri Hari Babu Naidu
RespondentS. Alamelu Ammal
Cases ReferredRamanathan Chettiar v. Ramasami Pillai
Excerpt:
..... any disposal that the suit hereafter gets must not be inconsistent with the position that at the time the suit was instituted, it was clearly barred by section 3 of the act. the preamble expressed the hope that indebted agriculturists in the state might get a chance to survive the drought and to rehabilitate themselves with the arrival of better times if they were spared, for a while, from the pressures of litigation from their creditors. it was evidently felt that even with a good harvest on hand, indebted agriculturists might not be in a position then and there to repay their subsisting debts all at once. the object was no more than to give a breathing time to agriculturists in order that they may be the better enabled thereafter to dl charge their obligations without any financia..........six months, but at the same time entertained a different institution to the effect that similar suits instituted during the period of the moratorium must nevertheless be dismissed, even after the period of two years and six months had expired. in so far as the substantive rights and liabilities of the parties are concerned and in so far as the nature and object of the statutory moratorium are concerned, i can find no difference whatever between suits which are pending as on the date of commencement of the act and suits laid after the commencement of the act. in both the moratorium must have the same effect and it must have the same duration of time. the basic conception which underlines both sections 3 and 4 is the same and this scheme of the act is further underlined by the avowed.....
Judgment:
ORDER

V. Ratnam, J.

1. This case has posed a problem in giving effect to Section 3 of the Tamil Nadu Agriculturists (Temporary Relief) Act, 1976. This section barred for a short duration, the institution of suits for recovery of debts from agriculturists. The petitioner in this civil revision petition was the defendant in a suit on a promissory note on the file of the Sub-Court, Cuddalore. The petitioner invoked Section 3 of the Act as a bar to the suit. The learned Subordinate Judge tried this issue as a preliminary issue. At the end of the inquiry, he held that the section did not apply to this case and posted the suit for further trial on the remaining issues. This decision is now questioned by the defendant in this civil revision petition.

2. At the hearing before me, there was little or no controversy as to the construction of Section 3 of the Act or even as to its application to the present case. The parties were at variance only on the manner of giving effect to the provision in the context of the present case.

3. As earlier indicated, Section 3 of the Act imposed a moratorium on the recovery of debts by Court process. The section, as amended, read as under:

3. Bar of Suits and applications :--No suit for the recovery of debt shall be instituted, no application for the execution of a decree for payment of money passed in a suit for the recovery of a debt shall be made and no suit or application for the eviction of a tenant on the ground of nonpayment of a debt shall be instituted or made, against any agriculturist in any civil or revenue Court on and from the date of commencement of this Act and before the expiry of two years and six months from the said date.

4. The reckoning of the period of the bar enacted in the section does not involve any feat of calculation, The date of commencement of the Act was 15th January, 1976, as laid down in Section 1(3). Two years and six months from that date would expire on 15th July, 1978. The bar imposed by the section was, therefore, in force on and from 15th January, 1976 until 15th July, 1978, both days inclusive. The suit against the petitioner in this case had been brought on 6th July, 1978, while the bar under the section was still operative. The learned Subordinate Judge's finding to the contrary was therefore quite erroneous. His mistake lay in thinking that the operative period of the bar under the section was only two years He had obviously overlooked an amendment. to the section which had enlarged the bar to two years and six months.

5. The result is that on the preliminary issue it must now be held that the suit against the petitioner was instituted in contravention of Section 3 of the Act. But as I had earlier indicated, the difficulty which the Court faces in this case is not as to the applicability of the bar under Section 3, but as to how the present finding on that issue is to be followed up and given effect to in the suit, which is now pending disposal on the Sub-Court's file. On one thing there can be no two opinions. Any disposal that the suit hereafter gets must not be inconsistent with the position that at the time the suit was instituted, it was clearly barred by Section 3 of the Act.

6. On this aspect of the matter, the defendant's learned Counsel said that the language of Section 3 was clear and in operation. According to his submission, when the section laid down that no suit shall be instituted for the duration of the period mentioned therein, implicit in that prohibition was the necessary consequence that the Court should have no truck with any suit, which was brought in contravention of that prohibition. According to learned Counsel, the court was left with no option and no discretion in such a situation, but to dismiss the suit without further ceremony.

7. Learned Counsel for the plaintiff, however, urged that the provisions of the Act were designed to operate only for a temporary period and it would be totally wrong and out of keeping with the nature of the provisions of Section 3, if the Court were to dismiss the plaintiff's suit at a time when the section is no longer in force to bar its further trial although it did stand in the way of the institution of the suit at the time when it was brought.

8. The controversy has to be resolved, in my opinion, not on a priori reasoning, but by reference to the avowed object of the Act, the history of the Legislation and the general scheme of the Act. As a matter of legislative history, Section 3 of the Act originated in Tamil Nadu Ordinance I of 1975, which took effect on 16th January, 1975. It was later replaced by an Act of the State Legislature, Tamil Nadu Act X of 1975. The avowed object of this legislative measure was set out in a preamble to the Act. The preamble referred to the prevalence of a widespread agricultural drought in the State at that time and the adverse effects which the drought had particularly on agriculturists, who happened to have fallen into debts. The preamble expressed the hope that indebted agriculturists in the State might get a chance to survive the drought and to rehabilitate themselves with the arrival of better times if they were spared, for a while, from the pressures of litigation from their creditors. Section 3, accordingly imposed a temporary prohibition against institution of suits against indebted agriculturists for a period of one year from 16th January, 1975. By the end of 1975, with the onset of the monsoon, the drought conditions in the State had perceptibly eased. Novertheless, the State Government deemed it expedient to extend the temporary respite of one year by some more breathing time. It was evidently felt that even with a good harvest on hand, indebted agriculturists might not be in a position then and there to repay their subsisting debts all at once. It was thought that extension of the statutory stay by another three months might meet with the requirements of the situation. Ordinance No I of 1976 was accordingly promulgated with effect from 15th January, 1976. It provided that no suit for recovery of a debt from an agriculturist shall be instituted before the expiry of three months from the commencement of the Ordinance. This Ordinance could not be replaced by an Act of the State Legislature because the State of Tamil Nadu had been brought under President's rule on 30th January, 1976, and the State legislature itself stood dissolved. At the same time, the Union Parliament too was not in session. In the absence of any competent legislative body which could pass an appropriate Act incorporating the provisions of Ordinance I of 1976 another Ordinance. Ordinance VII of 1976, was promulgated on 3rd March, 1976. This was done by the Governor of Tamil Nadu in exercise of the powers, delegated to him by the President. This Ordinance was deemed to have come into force on 15th January, 1976. It provided that the bar against institution of suits and other proceedings for recovery of debts from agriculturists would continue for a further period of one year from the said date. When Parliament again happened to go into session, it passed Central Act XLI of 1976. under which it delegated to the President the powers of the State Legislature to pass laws for the State of Tamil Nadu. In exercise of this delegated power, the President enacted Tamil Nadu Act XV of 1976. This Act replaced Ordinance VII of 1976, incorporating all the provisions of the Ordinance including Section 3 imposing bar of institution of suits for a further period of one year from 16th January, 1976, The period of one year was, however, enlarged from time to time under subsequent statutory amendments. Under Section 2 of Tamil Nadu Debt Relief Laws (Amendment) Act, 1977(President's Act, No III of 1977 the period of the bar was extended from one year to one year and six months. Subsequently, the Tamil Nadu Legislature enacted the Tamil Nadu Debt Relief Act, (Second Amendment) Act, 1977(Tamil Nadu Act I of 1977) under which the period of the bar was extended from one year six months to two years. The period of two years was ultimately enlarged to two years and six months by the Tamil Nadu Debt Relief Laws (Amendment) Act, 1978, (Tamil Nadu Act II of 1978). Since Act XV of 1976 came into force on 15th January, 1976, Section 3 as it finally stood, imposed a bar against the institution of suits for a period of two years and six months from the said date, that is to say, till 15th July, 1978.

10. This background of legislative history emphasises two important features of Section 3. One is that the bar is to act only as a temporary moratorium. Every time the question was mooted or reviewed, the concerned Legislature or other law-making authority only tended to reiterate and re-emphasise the temporary operation of the bar although on every occasion the duration of the bar was being enlarged little by little. The other feature which emerges from the succession of Ordinances and legislative enactments on the subject relates to the avowed object of the Act. The object was no more than to give a breathing time to agriculturists in order that they may be the better enabled thereafter to dl charge their obligations without any financia enba rrassment or difficulty. The evolution of the statute would have taken a different course, if the idea had been either to destroy the remedy or wipe out the debt itself.

11. The scheme of the Act, as disclosed by other related provisions also points to the same conclusion. The Act was obviously designed to impose a moratorium against recovery of debts from agriculturists by Court process. Section 3 achieved this objective by imposing a temporary bar against institution of suits and other proceedings. The Act also made appropriate provision in Section 4 in regard to pending proceedings, that is to say, suits and proceedings pending at the time of commencement of the Act. This section enacted that all pending suits and execution proceedings against agriculturists shall be stayed for the duration of the same period covered by Section 3. The necessary implication of imposing this stay of a limited duration is that once the period expired, the stay would also get automatically vacated. In practical terms, the result of Section 4 on pending proceedings was that the Court would have to adjourn their hearing. But, once the period under Sections 3 and 4 expired, there was no bar to the Court taking up the proceedings from where they were left off. When this is the effect of Section 4, with reference to pending suits against agriculturists, the position could not possibly have been conceived to be different when Section 3 happened to be enacted in the same statute to subserve the same legislative objective. It would be incongruous to hold that the legislature intended that suits for recovery of debts which were pending against agriculturists at the commencement of the Act should be proceeded with after the expiration of two years and six months, but at the same time entertained a different institution to the effect that similar suits instituted during the period of the moratorium must nevertheless be dismissed, even after the period of two years and six months had expired. In so far as the substantive rights and liabilities of the parties are concerned and in so far as the nature and object of the statutory moratorium are concerned, I can find no difference whatever between suits which are pending as on the date of commencement of the Act and suits laid after the commencement of the Act. In both the moratorium must have the same effect and it must have the same duration of time. The basic conception which underlines both Sections 3 and 4 is the same and this scheme of the Act is further underlined by the avowed object of the Act, to which reference has already been made.

12. Section 5 of the Act is also a pointer to the fact that the bar under Section 3 was not intended to have any effect once the period of two years and six months had come to a close. This section was obviously meant to protect creditors to whom the section might apply or might be thought to apply. It provided that in computing the period of limitation prescribed for a suit for the recovery of a debt, the time during which the institution of the suit was barred by Section 3 or during which the plaintiff or his predeces-sor-in-title, believing in good faith that Section 3 applied to such a suit, refrained from instituting the suit, shall be excluded. The enactment of a provision of this kind implies two things. That the bar imposed by Section 3 can be given effect to by the creditors themselves, and where they desist from bringing suits against their debtors for the duration, nothing in the Act prevents them from laying the suits thereafter. What is more, Section 3 would protect even those persons who bona fide believed that Section 3 applied to their suit claims and in that belief refrained from instituting their suits within time. In all such cases, the period of the moratorium under Section 3 would stand excluded from the computation of the period of limitation for suits instituted after 15th July, 1978,

13. It may be granted that Section 5 would, in terms apply only to those who observe the bar under Section 3 and not to those who prefer their suits even during the period of the bar. But it could not have been beyond the contemplation of the Legislature that there might be a good number of creditors who might not be aware, or might not be willing to admit that their debtors are agriculturists entitled to the relief under the Act. Or, they might rather leave the matter to be decided by the Court anyway, than take a risk. The present suit might have been instituted under any one of these motivations. But the question whether it is barred under Section 3 had to be gone into by the Court, as it has to be in every other case. Although the statute, in terms, merely prohibited the institution of suits during the period of the bar, it had not provided for any machinery to make the prohibition effective and stop every barred suit from entry into the receiving sections of Courts. In the absence of any screening procedure devised to function outside the Court system, suits which are instituted in coatravention of Section 3 must perforce be adjudged as to their entertainability only by the Court, What is more, the stage at which the issue would become ripe for the Court's determination must necessarily arrive in every case only after the defendant enters appearance, and pleads Section 3 as a bar. It is then, and not till then, that the issue would clearly emerge for determination in the context of Section 3 of the Act. Besides, the application of this provision can by no means be mechanical, in every case. Depending on the pleadings between the parties, the Court will have to go into such, jurisdictional facts as to whether the suit claim is for recovery of a debt, whether the defendant is an agriculturist and other related questions. These questions are by no means easy to solve, considering that the Act defines both a debt and an agriculturist under special definitions. The Act includes certain things and persons within the purview of the definitions, and it excludes certian things and persons from the same definitions. In these events the trial of the issue as to the bar under Section 3 can, by no means, be summarily dealt with by the Court. Under present conditions of judicial disposal, it might take a pretty long time for the Court to determine the issue one way or the other. This is without reckoning the further time-lag involved in bringing the matter further up in revision, as had been done in this case. There may, therefore, be cases such as the present one, where by the ' time the Court decides the preliminary issue as to application of time bar under Section 3. the duration of the bar itself might have expired. In all these cases, therefore, it would become a matter of importance to decide how the section has to be administered or enforced by the Court. In eases where the Court holds that the section does not apply, there is no problem, for, the Court will have to get on with the trial of the suit on merits. But in cases, such as the present, where the Court holds that the suit had been instituted in contravention of the bar and the decision on this issue happens to be rendered after the expiry of the period of the bar, there is nothing in the Act to suggest that the Court could not get on with the trial of the suit on other issues, seeing that the section no longer presents any obstacre to such a course. In such a situation, the effect of the Court's finding on the preliminary issue would be only to declare, ex post facto, that the institution is bad. It cannot undo the institution, for, what is instituted and the suit being onfile is a fact which the Court cannot shut its eyes to.

14. Section 3 of the Act does not impose a bar on the jurisdiction of the Court; it only bars the institution of the suit for a short while ; and if the period is over, there is no obstacle to the Court getting on with the suit. The Court could not get on with the suit so long as the period still subsists, because the suit cannot even be instituted during that time, but once the period goes the bar cannot have a longer arm to stop its jurisdiction.

15. It may be said that if the finding of bar under Section 3 is not followed up by a dismissal of the suit, then the section will be administered as a bare machinery of stay. The answer is that if that is the effect that the scope of the section leads to, it cannot be helped. The Act, no doubt, makes a distinction between stay of pending suits and bar of institution of suits, for the duration. But the Act nowhere expressly says that suits should be dismissed for contravening Section 3, In an unreported decision Mohan, J. held that the provision can be given effect to by merely adjourning the suit for the duration of the bar. Vide Palanisami v. Kandasami C.R.P. No. 1806 of 1976, dated 8th July 1977. In that case, a suit was filed during the subsistence of a similar bar against the institution of suits imposed by Section 4 of Tamil Nadu Ordinance VIII of 1975. This section was pleaded in defence as a bar to the Court entertaining the suit. The District Munsif upheld the plea, but did not accept the contention of the defendant that the Court should dismiss the suit on the basis that it was instituted in contravention of the bar under the Ordinance. What he did was to stay the suit for the duration of the bar enacted in the Ordinance. When the matter came up in revision, Mohan, J., upheld the action of the trial Court holding that the Ordinance did not bar the jurisdiction of the Court, but only disabled the matter from being proceeded with for the duration of the period provided for in the Ordinance. In the present case, no question of adjournment of the suit can arise, because even at the time when the learned Subordinate Judge had decided the preliminary issue, the period of the bar under Section 3 had expired by efflux of time.

16. Learned Counsel for the petitioner cited a decision of a learned single Judge of this Court under a different, but comparable legislation as an authority for the position that the Court must dismiss the suit once it holds that its institution is in contravention of the statute. The decision is reported in Ramanathan Chettiar v. Ramasami Pillai : AIR1957Mad780

17. Technically, that decision is not binding on me, because the present case arises under a different statute. The section may be in part materia, but that does not make the decision under a different Act a binding precedent. If I apply the ruling in that case, to the present case, I could only do so per incuriam. For, in that that decision. Rajagopalan, J., accepted without question a parallelism drawn between the Act enacting a temporary bar on the institution of a suit and the Limitation Act which prescribes a period of limitation for institution of suits. The two enactments are poles apart. The Limitation Act enacts that suits shall be instituted, within certain periods of time. The present Act says that suits cannot be instituted during a certain period. The Limitation Act expressly insists that a suit laid after the expiry of the period of limitation shall stand dismissed by the Court and no fresh suit shall lie for the same relief. In other words, the Limitation Act bars the remedy permanently and irretrievably. What is more, in certain kinds of cases, the permanent loss of remedy is also expressly enacted to result in permanent loss of the substantive right itself (vide Section 27). These are by no means the consequences contemplated by Act XV of 1976. There is no express provision for dismissing a suit. Indeed, if regard is had for a literal understanding of Section 3 the Court nowhere comes into the picture. A creditor might well implement the section by not instituting the suit for the duration and Section 5 is intended to protect such creditors. It is only where a creditor either because he is ignorant of the bar or does not accept the section applies or because he would rather have the Court to decide the question, that Section 3 would at all come up for determination by the Court. Section 3 does not say that the Court should dismiss the suit. The question has, therefore, to be decided as a matter of construction to find out if as a matter of necessary intendment, that is the consequence of application of Section 3. This question of construction must therefore, be decided by looking to the words of Section 3, in the context of the whole structure and scheme of the Act and the object of the enactment and the history of legislation. I have already touched upon these aspects and these show that the relief is intended only to be a temporary duration for a limited purpose. To dismiss a suit because its institution is in contravention of the Act, is to misunderstand the object of the Act and to misconstrue and misapply its provisions. By so doing, the Court will not only be infusing permanent life into a temporary legislative measure, but also make the Act into a weapon of destruction of creditor's right to recover a debt, when it is only a temporary postponement of Court process of recovery. The Court would also, in the process, be abdicating its own jurisdiction to take cognizance of civil suits when there is nothing to bar such jurisdiction. For all the above reasons, I am satisfied that although the institution of this suit, at the time it was instituted, was barred under Section 3 of Act XV of 1967, the Court's jurisdiction, to try the suit, subsequent to 15th July, 1978, is by no means barred. Accordingly, while reversing the findings of the learned Subordinate Judge on the preliminary issue, J uphold his discretion in posting the suit for further trial on the remaining issues. This civil revision petition is dismissed. No costs.


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