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Pechiammal Vs. Punnaivanan Chettiar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberAppeal No. 65 of 1975 and C.M.P. No. 1320 of 1975
Judge
Reported inAIR1979Mad140
ActsTamil Nadu Agriculturist Relief Act, 1938 - Sections 8; Tamil Nadu Debt Relief Act, 1972 - Sections 2(3), 7(1), 7(2) and 7(3)
AppellantPechiammal
RespondentPunnaivanan Chettiar
Cases ReferredRamanathan Chettiar v. Oomanathan Chettiar
Excerpt:
.....8 of tamil nadu agriculturist relief act, 1938 and sections 2 (3), 7 (1), 7 (2) and 7 (3) of tamil nadu debt relief act, 1972 - suit for recovery of sum - whether suit mortgage bond executed by appellant in favour of original mortgagee for consideration of rs. 4500 was not supported by consideration - whether appellant entitled to benefits of act of 1972 - trial court found that mortgage was fully supported by consideration of rs. 4500 and appellant not entitled to benefit of act of 1972 - in appeal found that appellant entitled to benefit of act of 1972 - liable to pay only balance due on principal as on 01.03.1972 after appropriation of all payments already made towards principal due - respondent entitled to recover of rs. 1035 with interest at 9% per annum from 01.03.1972 - appeal..........as rs. 4500. the appellant further claimed that he was entitled to the benefits of the tamil nadu debt relief act 1972 (tamil nadu act 38 of 1972). consequently he claimed that the amounts paid towards the three mortgages should be appropriated towards the principal of rs.6500 he further stated that he would be liable to pay the balance of the principal amount only with interest at 9 per cent per annum. the two main issues raised by the court below for decision are as follows-1. whether the suit mortgage bond executed by the defendant in favour of the original mortgagee veerammal for a consideration of rs. 4500 on 2-12-1966 (third mortgage bond) is not supported by consideration to an extent of rs.2500? 2. whether the defendant is entitled to the benefits of the tamil nadu debt.....
Judgment:

1. The defendant in O.S. No.49 of 1973 on the file of the Court of the Subordinate Judge, Sivaganga is the appellant. The plaintiff-respondent filed the suit for recovery of a sum of Rs.11206-30 due on Exs.A.1 10 A 3 deeds of mortgages executed by the appellant in favour of one Veerammal. Ex. A.1 dated 8-5-1961 is for Rs.3000. Ex A.2 dated 12-4-1962 is for Rupees 1500. Ex. A.3 dated 2-12-1966 is for Rs. 4500. Under Exs.A.4, dated 1-6-1972, the original mortgage Veerammal; assigned her rights under Exs. A.1 to A.3 in favour of the plaintiff for a sum of Rs.11790. The rate of interest payable under the three mortgage documents is 12% per annum. The plaintiff respondent has further averred that the appellant had paid a sum of Rs. 1680 towards interest due till 31-12-1966 and the whole amount of interest due till 1-9-1969 and the necessary endorsement therefor had been made on Ex. A.1. It is further admitted that the respondent had received Rs.100 each on 6-9-1970, 17-10-1970, 10-12-1970and 8-2-1971, though the said payments had not been endorsed on the mortgage documents. As regards Ex. A.2 it is admitted that the appellant had paid Rs.100 each on 1-3-1971, 20-4-1971, 7-6-1971, 7-7-1971, 5-9-1971 and a further sum of R.60 on 22-5-1971, without making any endorsement. As regards Ex. A.3 interest has been similarly paid till 1-11-1969 and necessary endorsement made on A.3. The original mortgagor also paid Rs.100each on 15-10-1971. 8-11-1971, 6-12-1971 and 8-2-1972, but they have not been duly endorsed on Ex. A.3. Thereafter on 1-6-1972, the original mortgage assigned her rights under Exs. A.1. to A.3 to the appellant under Ex. A.4. dated 1-6-1972, for Rs.11,790 subsequent to the assignment the appellant himself paid a sum of Rs.100 on 13-8-1972 towards Ex. A.1 Rs. 100 0n 13-1-1973 towards Ex. A.2. and Rs.100 each on 10-2-1973 and 12-3-1973 towards Ex. A.3. th0ugh the respondent issued a notice on 13-7-1973 under Ex. A.5. the appellant had not paid the balance due under the three mortgage documents. Its is further averred in the plaint that the defendant is not an agriculturist entitled to the benefits of the Tamil Nadu Agriculturist Relief Act (Tamil Nadu Act 4 of 1938)as amended by Tamil Nadu Act 8 of 1973.

2. The appellant in his written statement admitted having received the consideration of Rs.3000 under Ex. A.1, and Rs.1500 under Ex. A.2. He however pleaded that Ex. A.3mortgage was not fully supported by consideration to the extent of Rs.4500 but that the same was supported by consideration only to the extent of Rs. 2000. The sum of Rs. 2500 as per Ex. A.3. represented the outstanding of interest on Exs. A.1 and A.2. upto the date of Ex A.3 and that was how the consideration for Ex A.3. came to be stated as Rs. 4500. The appellant further claimed that he was entitled to the benefits of the Tamil Nadu Debt Relief Act 1972 (Tamil Nadu Act 38 of 1972). Consequently he claimed that the amounts paid towards the three mortgages should be appropriated towards the principal of Rs.6500 He further stated that he would be liable to pay the balance of the principal amount only with interest at 9 per cent per annum. The two main issues raised by the court below for decision are as follows-

1. whether the suit mortgage bond executed by the defendant in favour of the original mortgagee Veerammal for a consideration of Rs. 4500 on 2-12-1966 (third mortgage bond) is not supported by consideration to an extent of Rs.2500?

2. whether the defendant is entitled to the benefits of the Tamil Nadu Debt Relief Act (38 of 1972)?

3. On issue No.1 the trial court found that Ex. A.3 mortgage was fully supported by consideration to the extent of Rs. 4500 and not merely to the extent of Rs.2000 as pleaded by the appellant. On issue No.2, the trial court found that the appellant is not entitled to the benefits of the Tamil Nadu Debt Relief Act 1972.

4. Before me Mr. S.V. Jayaraman, learned counsel for the appellant, made a feeble attempt to challenge the finding of the trial court (and contented that Ex. A.3. was supported by consideration only to the extent of Rs.2000 and not Rs.4500. The trial court stated that the appellant did not adduce any evidence to substantiate the plea that the third mortgage bond was devoid of consideration to the extent of Rs. 2500. It is further significant to notice that learned counsel for the appellant in the court below made an endorsement that he was not pressing issue No.1 in view of this endorsement, it is not possible to entertain any arguments from learned counsel for the appellant that the finding of the court below that Ex. A.3 is fully supported by consideration is wrong. I therefore confirm the finding of the court that Ex. A.3 is supported by consideration to the extent of Rs.4500.

5. On the second issued Mr. S.V. Jayaraman, raised the following two contentions-firstly, he contended that the finding of the lower court that the appellant was not debtor within the meaning of the Tamil Nadu Debt Relief Act, 1972 (Tamil Nadu Act 38 of 1972) on the ground that he fell within proviso (iii) to the definition of debtor in section 2(3) of the said Act is not correct. According to learned counsel Ex. A.6 is the extract from the property tax payment register for the year 1973-74 relating to door No.16/1 in S.No.108-A standing in the name appellant. similarly Ex. A.7 is the extract from the property tax register for the year 1973-74 relating to door No.16/1 in S.No.110 also standing in the name of the appellant. Learned counsel for the appellant submits that Exs.A.6 and A.7 related to a period subsequent to the relevant dates mentioned and proviso (iii) to S.2 (3) of the Said Act. Under the said proviso, we are concerned with four half-years immediately preceding 1st March 1972, and consequently merely because under Exs.A.6 and A.7, the annual rental value came to more than Rs.1200 it could not assumed that the annual rental value would have been more than Rs.1200 for the four half-years immediately preceding 1-3-1972, at the same time, the appellant himself produced in the lower count only Ex.B.3 which is the property tax payment register for 1973-74 relating to door no.16/1 S. No. 110. On the same reasoning Ex. B.3 also cannot be of any help to the appellant.

6.The appellant has however field in this court the property tax payment registers pertaining to door No. 16/1 S No.110 standing in the name of the appellant for the half of years 1968-69,1969-70 I and II, 1970-71 I and II; 1971-72 and 1972-73, along with C.M.P.1320 of 1975 praying for the reception of the said documents in additional evidence under O.41, R.27, C.P.C. Mr. Thiagarajan, appearing for the respondent, perused the documents filed in additional evidence along with C.M.P.1320 of 1975, and did not dispute the fact that these documents related to the house property belonging to the belonging to the appellant. These documents being public documents, Mr. Thiagarajan did not seriously oppose my receiving he said documents in additional evidence. I therefore allow C.M.P.No. 1320 of 1975 and receive the said documents a additional evidence. They are marked as Ex. A-8 series. In the light of Ex.A-8 series which conclusively establish that the appellant has not been assessed to property tax in respect of buildings or land other than the agricultural lands for an annual value if more than Rs.1200 I hold that the appellant is entitled to the benefits of the provisions of the Tamil Nadu Debt Relief Act 1972 (Tamil Nadu act 38 of 1972). In fact, Mr. Thiagarajan, learned counsel for the respondent, fairly conceded before me that once the additional documents are received in evidence he could not assert that the appellant is not entitled to the benefits of the Tamil Nadu Debt Relief Act 1972.

7. The further contention of Mr. Jayaraman for the appellant is that once it is accepted that the appellant is entitled o the benefits of the said Act, all the payments made towards Ex. A.1 to A.3 prior to 1-3-1972 should be appropriated towards the principal and that in other words, the respondent plaintiff would not be entitled to any interest at all on Exs. A.1 to A.3 till 1-3-1972, Mr. Jayaraman however has not been able to cite before me any precedent on this question which had directly arisen under the Tamil Nadu Debt Relief Act,1972. He however relied upon the Bench decision of this Court in Ramanathan Chettiar v. Oomanathan Chettiar : (1974)1MLJ221 , and he decision of the Full Bench in Akilandam Ammal v. Indrani, : AIR1977Mad145 Both these citations referred to the question whether the entire interest upto 1-3-1972 had been wiped out under the Tamil Nadu Agriculturists, Relief Act (Tamil Nadu Act IV of 1938) as amended by the Tamil Nadu Agriculturists Relief Act (Tamil Nadu 8 of 1973)

8. According to Mr. Jayaraman, the provisions of Ss.8(2), 8 (3) and 8 (4) and Explanation I of Tamil Nadu Act 4 of 1938 as amended by Tamil Nadu Act 8 of 1972 are in pari materia with the provision of sections 7 (1), 7 (2) and 7 (3) and Explanation I of the Tamil Nadu Debt Relief Act. 1972, and that consequently the principles of interpretation adopted by this Court in the two cases referred to above should be applied to this case and if so applied the irresistible conclusion will be that even under Tamil Nadu Act 38 of 1972, the entire interest up to 1-3-1972 will be wiped out.

9. The relevant provisions of the two acts are given below for comparison;-

Section 8 of Tamil Nadu Act IV of 1938, as amended by Tamil Nadu Act 8 of 1973;-

8. Debts incurred before the (1st March 1972) shall be scaled down in the manner mentioned hereunder namely;-

(2) Where an agriculturists has paid to any creditor twice the amount of the principal whether by way of principal or interest or both, such debt including the principal shall be deemed to be wholly discharged,

(3) Where the sums repaid by way of principal or interest or both fall short of twice the amount of the principal such amount only as would make up this shortage or the principal amount as or such portion of outstanding whichever is smaller, shall be repayable.

(4) Subject to the provisions of Ss. 22 to 25, nothing contained in sub-secs. (2) and (3) shall be deemed to require the creditor to refund any sum which has been paid to him or to increase the liability of a debtor to pay any sum in excess of the amount which would have been payable by him if this Act has not been passed.

Explanation I: In determining the amount repayable by a debtor under this section every payment made by him shall be credited towards the principal (notwithstanding that he has expressly stated in writing that such payment shall be in reduction of interest)

Section 7 of Tamil Nadu Act 38 of 1972.

7. Debts incurred before the 1st March 1972, shall be scaled down in the manner mentioned hereunder namely;-

(1) Where any debtor has paid to any creditor twice the amount of the principal whether by way of principal or interest or both such debt including the principal, shall be deemed to be wholly discharged.

(2) Where the sums repaid by way of principal, or interest or both fall short of twice the amount of the principal such amount only as would make up such shortage or the principal amount or such portion of the principal amount as is outstanding, whichever is smaller, shall be repayable.

(3) Subject to the provisions of Ss. 18 to 21, nothing contained in Cls.(1) and (2) shall be deemed to require the creditor to refund any sum which has been paid to him or to increase the liability of a debtor to pay any sum in excess of the amount which would have been payable by him if this Act had not been passed.

Explanation; I; In determining the amount repayable by a debtor under this section, every payment made by him shall be credited towards the principal, notwithstanding that he has expressly stated in writing that such payment shall be in reduction of interest'.

From the above it will be seen that the said provisions of the two acts are in pari materia. In Ramanathan Chettiar v. Oomanathan Chettiar : (1974)1MLJ221 , Ismail J. Speaking for the Bench elaborately considered the entire question in his lucid judgment. Referring to the amended Explanation i to Act 4 of 1938, the learned Judge stated as follows:

'The effect of this Explanation is to put an end to all the appropriations already made either with reference to Ss. 59 to 61 of the Indian Contract act before the introduction of Explanation I, for the first time, to S.8 by the amendment Act XXIII of 1948 or with reference to Explanation I to S.8 as introduced by the Amendment Act XXIII of 1948 and to statutory and compulsory appropriate all payments mad by a debtor to a creditor only towards the principal. As a matter of fact, the appropriations already made have to be reopened for the purpose of applying the provisions of the Act and for finding out the amount repayable by a debtor........ However, by virtue of explanation I, as amended by the 1973 act, this position is completely changed. Since all payments made by a debtor to the creditor have now to be appropriated only towards the principal outstanding will always be smaller than the difference between twice the principal amount minus all the payments. In other words, the principal amount minus all payments will always be smaller than twice the principal amount minus the said payments. Sub-section (3) as it stands, contemplates the possibility of either of the two figures being the smaller than the other. By virtue of the amendment made to Explanation I, by the 1973 Act this possibility is nullified, because the principal amount minus all payments will always be smaller than twice the principal amount minus, all payments and therefore there is no chance of twice the principal amount minus all payments being in any case smaller than the principal amount minus all payments. In other words, the contingency contemplated by sub-section (3), namely, that in some cases the difference between twice the principal amount minus all payments can be smaller than the principal amount or the portion of the principal amount outstanding becomes unreal and has no significance whatever in view of the amendment made to explanation I by he 1973 Act.'

After a further discussion of the question, the leaned Judge observed as follows;-

'Under these circumstances, we have come to the inevitable conclusion that if the amended Explanation I is given effect to, as we ought to, with reference to sub-sec (3) of S.8 of the Act, the principal amount alone in case no payment whatever has been made will be repayable by a debtor, because that will be smaller than twice the principal amount and such portion of the principal amount as is outstanding alone will be repayable in case where some payments have been made and those payments have been appropriated towards the principal, since that portion of the principal amount will be small than twice the principal amount minus the said payments'

Again in para. 35 the learned Judge states as follows-

'In this particular case, as we have pointed out already, no other construction which will simultaneously give effect to Explanation I as amended by the 1973 Act as well as to the entire language of sub-sec (3) of S.8 was suggested, by any one appearing before us. Under such circumstances, only two alternatives are possible. one is to give effect to explanation i as amended by the 1973 Act and to hold on that basis that under sub-section (3) a creditor will be entitled to the principal amount or such portion of the principal amount as is outstanding, because that is smaller than the difference between twice the principal amount minus the payments made by a debtor. The second is to ignore the amendment made to explanation I by the 1973 act altogether on the ground that if it is given effect to, it will wipe out all interest outstanding and such was not the intention of the legislature inasmuch as it has deliberately omitted sub-sec (1)of S.8 for the reasons already indicated by us, it is certainly not open to the court to have recourse to the second alternative. As pointed out by as already, explanation I constitutes the key provision in the application of sub-s (3) and it also constitutes a statutory command from which courts have no escape. A statute must be construed so that the intention of the legislature may not be treated as vain or left to operate in the air. If the second alternative referred to by us is adopted, the deliberate amendment to explanation i made by the Legislature will have to be treated as in vain and sub-sec (3) of S.8 has to be applied without reference to the said Explanation I, notwithstanding the fact that the said Explanation directly and vitally affects and controls the operation of sub-sec. (3) of section 8......

The theoretical construction of sub-sec. (3) leads to the inference that the Legislature contemplated either of the two figures compared therein being smaller than the other. But the operation of the amended Explanation I is to make one figure always smaller than the other. Consequently, the actual working of the said sub-section along with the amended Explanation I does not give rise to any difficulty and it produces, a definite, clear a defective result. Therefore, we are of the opinion that the result we have reached is the only result that is possible, having regard to the language of the amended Explanation I and its mandatory character'.

10. This identical question dealt with by the division Bench in Ramanathan Chettiar v. Oomanathan Chettiar : (1974)1MLJ221 in relation to Tamil Nadu Act 4 of 1938 again came up for consideration before the full Bench in Akilandam Ammal v. Indrani, : AIR1977Mad145 Kailasam C.J. (as he then was) speaking for the Bench laid down the law as follows (at p. 147 of AIR1977 Mad) :-

'The effect of the amendment of Explanation (1) to S.8 is that whatever payment has been made, it is adjustable only towards he principal would automatically get reduced whenever any such payment is made. Thus, only the principal outstanding is payable under sub-sec. (3) of S.8. As this section specifies the principal which is payable, the Legislature omitted S.8 (1) as there was no necessity for providing for the wiping out of the interest. Under Section 8 (3) of the Act before the amendment in 1973, the amount payable was either the amount which fell short of twice the amount of he principal or the principal as was outstanding on that day, It is, therefore, clear that the framers of the Act never intended that the creditor should get any thing more than the principal. The refinement that has been made after the amendment is that whatever amount has been paid will be adjusted towards the principal which will reduce the principle. The result will be that the creditor will lose the interest as all payments will have to be adjusted towards the principal and the principal will get reduced. The change that has been brought about is that through under the Act before the amendment, the interest paid under certain circumstances was not adjusted towards the principal and thus the principal still remained payable, by virtue of the amendment to the Explanation to Sec.8, all payments are adjusted only towards the principal, thus reducing the principal amount payable. The result would be that even in the absence of sub-sec (1) of S.8, the interest would stand wiped put.'

11. The Full Bench approved of the decision in Ramanathan Chettiar v. Oomanathan Chettiar, (1974) MLJ 221. Therefore, the position with regard to Tamil Nadu Agriculturists' Relief Act (Tamil Nadu Act 4 of 1938) as amended by Tamil Nadu Act 8 of 1973 is that under Explanation 1 to Sec 8 of the Said Act, the entire interest due under the debt as on 1-3-1972, will stand wiped out.

12. As is already seen from a comparison Ss.8 (2), 8 (3) and 8 (4) and Explanation I of Tamil Nadu Act 4 of 1938, as amended by Tamil Nadu Act 8 of 1973, are in Pari materia with Ss. 7 (1), 7 (2) and 7 (3) and Explanation I of Tamil Nadu Debt Relief Act of 1972. Respectively following the above Bench decision and the Full Bench decision already referred to by me. I hold that by a construction of S.7 (2) and Explanation I of the Tamil Nadu Debt Relief Act, 1972 (Tamil Nadu Act 38 of 1972). The entire interest due under the deed up to 1-3-1972 would stand wiped out and whatever payments that have been already made will be appropriated towards the principal and the appellant will be liable to pay only the balance of principal due if any.

13. In the result, I hold that thee appellant is entitled to the benefits of the Tamil Nadu Debt Relief Act, 1972 (Tamil Nadu Act 38 of 1972) and that he will be liable to pay only the balance due on the principal as on 1-3-1972, after appropriation of all payments already made towards the principal due under Exs. A.1 to A.3.

14 Counsel for the appellant and counsel for the respondent have filed an agreed statement of the amounts already paid by the appellant and the amount due as on 1-3-1972. As per this statement the total amount due on the three mortgages comes to Rs.9000. The amount paid up to 1-3-72 which is now to be appropriated towards the principal as per my finding that the appellant is entitled to have the interest due up to 1-3-1972 wiped out. comes to Rs.7965. According to this statement the balance due as on 1-3-1972, by the appellant to the respondent under the three mortgages is Rs.1035. As I have already stated, there is no dispute that if once I hold that the appellant is entitled to the benefits of the Tamil Nadu Debt Relief Act 1972 (Tamil Nadu Act 38 of 1972) and that all payments made up to 1-3-1972, should be appropriated towards the principal, then the balance of the principal due as on 1-3-1972 is Rs.1035. I therefore set aside the judgment and decree of the trial Court, partly allow the appeal and pass a decree in favour of the respondent for the recovery of sum of Rs.1035, with subsequent interest thereon at 9 per cent per annum from 1-3-1972. Since the question involved is an interpretation to be placed upon the provisions of the Tamil Nadu Debt Relief 1972 (Tamil Nadu Act 38 of 1972), I make no order as to costs in the appeal.

15. Appeal allowed.


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