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O.Rm.P.Rm. Ramanathan Chettiar Vs. P.S.L. Ramanathan Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1960)1MLJ1
AppellantO.Rm.P.Rm. Ramanathan Chettiar
RespondentP.S.L. Ramanathan Chettiar and ors.
Cases ReferredIn Jagannath v. Ram Dulari
Excerpt:
- - pending the appeal he applied for the stay of execution of the decree but without success. the appellant did not draw the money as he failed to comply with the condition imposed on the drawing of the money. we are, however, satisfied that that case has been, if we may say so with respect, correctly decided. 10. it was next contended that, as the decree had become satisfied by payment of money into court on 24th july, 1947, in accordance with the order in c. that appeal ultimately failed. if, on the other hand, the order imposes a condition on the decree-holder drawing the money like furnishing of security, there would be an impediment to the satisfaction of the decree......of the act would not apply to the instant case, as the decree was not one for the repayment of a debt payable before act iv of 1938 came into force. section 19(2) states that the provisions of sub-section (1) shall also apply to cases where after tip commencement of the act a court has passed a decree for the repayment of a debt payable at such commencement.18. in govindaswami goundar v. ramaswami goundar : (1958)2mlj185 , it was held that the expression 'payable at such commencement would mean payable at the commencement of act iv of 1938, that is 22nd march, 1938.19. the question for consideration would then be whether the debt in respect of which the decree had been passed in the instant case was one payable at such commencement, that is, at the commencement of act iv of 1938.20......
Judgment:
ORDER

Ramachandra Iyer, J.

1. When the above matter was heard by us on receipt of the opinion of the Full Bench, the case for the appellant was presented to us in two aspects : (i) the jurisdiction of the lower Court to grant relief under Section 19(2) of the Act and (ii) the liability of the decree debt to be scaled down under its provisions. For appreciating the contentions urged, it is necessary to set out a few facts.

2. As indicated in the judgment of the Full Bench, the decree was in respect of a claim for return of a deposit made by the appellant's father with the respondent's father. The deposit was made on 11th March, 1926, and was repayable on demand together with interest at the thavanai rate. A demand was made on 2nd October, 1944 and that not having been complied with, the suit was filed a few months thereafter. The respondent's case was that the transaction was a mere loan, and that the claim was barred by limitation. The learned Subordinate Judge held that the transaction amounted to a deposit and overruling the other contentions of the respondent passed a decree for the sum claimed.

3. The respondent, thereupon, filed an appeal, A.S. No. 249 of 1947, to this Court. Pending the appeal he applied for the stay of execution of the decree but without success. The appellant levied execution, and at that stage the respondent came forward with an application to this Court in C.M.P. No. 3112 of 1947, offering to deposit the entire decree amount into Court, and seeking directions to prevent the appellant from taking the money except on furnishing security. This Court by its order, dated 9th July, 1947, acceded to that request and directed that, if the respondent were to deposit the entire decree amount by 20th August, 1947, the appellant would not be allowed to draw out the same in satisfaction of the decree except on furnishing security for its repayment in case the respondent were to succeed in A.S. No. 249 of 1947. The debtor made the deposit on 24th July, 1947, within the time prescribed by the order of this Court. The appellant did not draw the money as he failed to comply with the condition imposed on the drawing of the money. On 14th September, 1951, this Court dismissed the appeal, holding that the transaction was one by way of deposit payable on demand, and that as the demand made in the instant case was within three years of the suit, the claim was not barred by limitation.

4. Mr. R. Gopalaswami Iyengar, the learned advocate for the appellant, contended that as the decree of the trial Court was merged in the decree of this Court in A.S. No. 249 of 1947, the lower Court would have no jurisdiction to grant the relief by way of an amendment of the decree under Section 19(2) of the Act, and that the proper Court to grant the relief would be only this Court which disposed of the appeal. To get over this objection the respondents have filed an application to this Court in C.M.P. No. 571 of 1959 in A.S. No. 249 of 1947 for scaling down the amount due under the appellate decree. The objection of the appellant to that application is that by the time when that application, was filed, the respondents were not agriculturist and would, therefore, be not entitled to the benefit of Act IV of 1938. The question of jurisdiction of the lower Court is, therefore, material for the purposes of this case.

5. Where a decree of a Court is appealed against its finality would be suspended and the decree passed by the appellate Court would supersede it, be it a case of either affirmance, modification or reversal. In all such cases the appellate decree will be the only decree for purpose of execution. It is, therefore, contended that where a decree has been passed by an appellate Court, the original Court would have no jurisdiction to amend the decree. Reference was made in this connection to the cases arising under Section 152, Civil Procedure Code. Section 152, Civil Procedure Code, embothes what in the English Courts was called 'the slip rule'; it gives power to a Court to correct the clerical or arithmetical mistakes in judgments, decrees, etc. The provision contemplates that the decree or judgment would be a valid one and the jurisdiction conferred was only to correct the mistakes of the type mentioned. Where, however, the matter was taken up on appeal the judgment or decree was set at large and all mistakes could be rectified and a proper decree passed by the appellate Court; it would follow that that Court alone will have the power to amend its judgment.

6. But the amendment contemplated by Section 19 of the Act is of a different character. It does not contemplate the subsistence of the decree but contemplates a reopening of the same, scaling down the debt and passing a revised decree in accord-dance with the Act. An amendment under Section 19 of the Act does not, therefore, contemplate a mere correction of an existing decree in regard to slips or mistakes but the passing as it were of a new and revised decree. The jurisdiction for such an amendment of the decree is not one under Sections 152 and 153, Civil Procedure Code, but under Section 19 of the Act. That provision enacts that an amendment of the decree thereunder should be by the Court which passed the decree. If there is no other provision it would certainly mean that where a decree of the trial Court has been superseded by one by the appellate Court, the latter would be the one that passed the decree. But the statute has provided an interpretation of the words 'the Court which passed the decree' in the Explanation to Section 20. Section 20 is complementary to Section 19. That enables an executing Court to stay proceedings till an amendment of the decree has been made by the Court which passed the decree. The Explanation is that the expression shall have the same meaning as in the Code of Civil Procedure. That the Explanation would apply to provisions of Section 19 is clear from the fact that Section 20, to which the Explanation, is added, itself refers to the Court which passed the decree for amending the decree under Section 19. In the Code of Civil Procedure there is no definition of the expression 'Court which passed a decree.' Section 37 of the Code of Civil Procedure states that the expression 'the Court which passed a decree', shall in relation to the execution of decree, unless there is anything repugnant in the subject or context, be deemed to include, where the decree to be executed has been passed in exercise of appellate jurisdiction, the Court of first instance. The fiction enacted by that provision would, on its terms, apply to the case of an execution and not the other matters provided for in the Code. It was contended for the appellant that that fiction could not apply to proceedings under Section 19, which are not proceedings in execution but in the suit itself. Plausible as the argument appears, we cannot accept the same. Section 20 which gives power to an executing Court specifically refers to that Court as the executing Court. Sections 19 and 20 use the expression 'a Court which passed a decree' for the purpose of amending the decree after applying the provisions of the Act. Therefore the Explanation was necessary only to define the Court which was to amend the decree and for no other purpose. There is, therefore, no reason to think that the Explanation under Section 20 referred to the Court only for the purpose of execution. The effect of the Explanation is that a statutory definition has been given to the expression 'the Court which passed the decree'. The Court to amend the decree would be that Court which would be the Court for execution under Section 37 of the Code of Civil Procedure.

7. In Gangaraju v. Ramayya : AIR1939Mad483 , it was held that Sections 19 and 20 of Act IV of 1938 should be read together and the explanation of the expression 'a Court which passed the decree' in Section 20 would apply to Section 19, and that an application to scale down a decree debt and amend the decree could properly be made to the Court of the first instance, although the decree of that Court had been superseded by the decree of an appellate Court. This view was accepted and followed in Periaswami v. Ramaswami : AIR1941Mad113 , and in Lingappa v. Chinnaswami (1955) 1 M.L.J. 1.

8. Mr. R. Gopalaswami Iyengar, for the appellant, contended that those decisions should no longer be held to be correct, having regard to the decisions in Veerappa Chetti v. Sivagami Achi (1941) 2 M.L.J. 964, Palani Mudali v. Athiappa Goundan : AIR1943Mad160 , and Moideen Balcha v. Chidambaram Pillai (1944) 2 M.L.J. 338. In those cases there were decrees passed by the trial Court before the coming into force of Act IV of 1938. Appeals were filed against those decrees, and the appeals were decided after the Act came into force. It was held that the pendency of the appeal suspended the finality of the decree of the original Court, and that, therefor (sic) application under Section 19 of the Act would not lie to the trial Court, although such decrees had been passed before the Act came into force. It was also held that as by the time the appellate decree was passed the Act had come into force, the relief to which a party would be entitled to under the Act would be to urge before the Appellate Court the plea under the Act, before judgment in the appeal and that Section 19 did not authorise the amendment of a decree passed after the Act. None of those cases was concerned with the problem, where if both the original and appellate decrees were passed, before the Act, which of the two Courts would have jurisdiction to amend the decree under Section 19. The principle that the original decree in a case, where an appeal has also been filed,. is suspended, and that the appellate decree would be the only decree between the parties, was invoked in the aforesaid decisions to show that no petition under Section 19 would lie to the original Court, although that Court's decree was passed before the Act came into force. That principle would have no application to a case where the appellate decree was itself capable of being amended under Section 19. To such a case the decision in Gangaraju v. Ramayya : AIR1939Mad483 , would apply. That decision has been accepted and acted upon by this Court for nearly 20 years, and even if we were not convinced of its correctness we would have accepted it if only on the principle of stare decisis. We are, however, satisfied that that case has been, if we may say so with respect, correctly decided. It follows that an application under Section 19(1) or 19(2) has to be made to the Court of the first instance which passed the decree, even though the appellate Court had either affirmed or modified or reversed the decree of that Court. Therefore, the lower Court alone would have jurisdiction to entertain the applications under Section 19(2). C.M.P. No. 571 of 1959 fails and is dismissed.

9. The learned advocate for the appellant tried to raise the question, whether the respondent had made out his status as an agriculturist on the crucial dates, and whether the decision of the lower Court which held that the respondent was entitled to relief under the Act was not sustainable. We declined, however, to hear him on that point as he had conceded before the Full Bench that the respondent was an agriculturist to whom the provisions of the Act would apply.

10. It was next contended that, as the decree had become satisfied by payment of money into Court on 24th July, 1947, in accordance with the order in C.M.P. No. 3112 of 1947, there would be no jurisdiction to amend the decree. The argument was based upon the provisions of Section 16 of Act XXIII of 1948. That enacts that the amendments made by that Act (which had been incorporated in the main Act (Act IV of 1938)) would apply to three categories of cases mentioned therein There is a Proviso to the section which runs thus:

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.

11. The contention on behalf of the appellant was that the amount deposited in pursuance of the order in C.M.P. No. 3112 of 1947 should be deemed to be money paid under Order 21, rule 1, Civil Procedure Code, and when it was paid into Court, there was a pro tanto satisfacation of the decree which would attract the provisions of the Proviso to Section 16. Order 21, Rule 1, prescribes the modes of paying the money under a decree, and states that all money payable under a decree shall be paid into the Court whose duty is to execute the decree or out of Court to the decree-holder or otherwise as the Court which made the decreedirects. Sub-rule (2) of the provision directs that notice of such payment shall be given to the decree-holder. It is conceded that no such notice was given in the present case.

12. The learned advocate for the appellant relied upon the decision in Tata Iron and Steel Co. v. Baidyanath (1921) I.L.R. 2 Pat. 754, where it was held that a payment into Court in satisfaction of the decree created a valid discharge of the judgment-debt, and that the omission to give a notice required by Order 21, rule 1, Sub-rule (2), could not affect the discharge. The question in the present case is (sic) whether the payment was invalid or valid in the absence of a notice under Order 21, Rule 1(2), but whether the payment of the decree-amount on 24th July, 1947, in pursuance of the order in C.M.P. No. 3112 of 1947 would at all amount to a payment under Order 21, Rule 1, as the amount could not be said to have been paid voluntarily or unconditionally. The payments under Order 30, Rule 1, are payments which should be unconditional in their nature. Under the order in C.M.P. No. 3112 of 1947 there was an impediment or a restriction against the decree-holder obtaining the money when deposited in terms of the order. The payment into Court being conditional cannot be held to be one coming under Order 21, Rule 1, Civil Procedure Code. In Sheo Gholum Sahoo v. Rahut Hussein I.L.R. (1878) Cal. 6, a sum of money was paid into Court on behalf of the judgment-debtor in lieu of security for the purpose of setting aside a sale in execution of a decree pending an appeal against an order directing sale. That appeal ultimately failed. It was held that neither the depositor nor the judgment-debtor could claim to have such deposit refunded. The learned Judges held that so far as the money was concerned when the appeal was dismissed, it must be taken to have been transferred to the credit of the decree-holder.

13. In Ramayya Aiyer v. Gopalier : (1918)35MLJ355 , there was an order for the arrest of the defendant before judgment. To obviate the arrest a sum of money was deposited into Court. It was held that the money which was paid into Court to the general credit of the action, was charged with a lien in favour of the plaintiff on the latter obtaining a decree in his favour, and that the judgment-debtor's representative would have rights only subject to the claims of the plaintiff.

14. The two cases referred to above were concerned with the attempts on the part of the judgment-debtor or his representative to take away monies deposited for the benefit of the decree-holder or the plaintiff. It was held that during the pendency of the proceedings or action there was a lien or charge in favour of that person and on his succeeding in the proceedings in Court, the amount stood transferred to his; credit. Another aspect of the matter is involved in the present case, that is, when does the decree-holder become absolutely entitled to the monies? His title would commence only when the judgment-debtor's title ends, that is on the termination of the proceedings in his favour.

15. Where money is deposited under an order of Court, the terms of the deposit would be governed by the order. If, for example, an order grants only a time for deposit with no other restriction, the deposit made would go in satisfaction of the decree. If, on the other hand, the order imposes a condition on the decree-holder drawing the money like furnishing of security, there would be an impediment to the satisfaction of the decree. The mere fact that the decree-holder furnished security would not affect the question as by the order of the Court it could be deemed to have been made only provisionally subject to the result of the pending proceedings. The principle of the decision in Sheo Gholam Sahoo v. Rahut Hussein I.L.R. (1878) Cal. 6, and Ramayya Aiyer v. Gopalier : (1918)35MLJ355 , will, however, apply to these cases and if the proceedings terminate in favour of the decree-holder, the monies would stand transferred to him on the date thereof. The conditions imposed by the order would then cease.

16. In the present case, when the money was deposited on 20th August, 1947, it was done in pursuance of the order in C.M.P. No. 3112 of 1947. That order placed a restriction on the appellant drawing the money. That could not be held to be a deposit under Order 21, Rule 1, Civil Procedure Code, but one under the order of the Court. The money deposited could be deemed to be a payment to or a realisation on behalf of the appellant only on 14th September, 1951, when the appeal was disposed of. By that time the Act XXIII of 1948 had come into force, and therefore the Proviso to Section 16 of that Act would not apply to the case. It follows that the money which was paid by the respondent into Court was realised by the appellant only after the commencement of the Act, and that the Proviso to Section 16 would not apply to such a case.

17. It was next contended on behalf of the appellant that the provisions of Section 19(2) of the Act would not apply to the instant case, as the decree was not one for the repayment of a debt payable before Act IV of 1938 came into force. Section 19(2) states that the provisions of Sub-section (1) shall also apply to cases where after tip commencement of the Act a Court has passed a decree for the repayment of a debt payable at such commencement.

18. In Govindaswami Goundar v. Ramaswami Goundar : (1958)2MLJ185 , it was held that the expression 'payable at such commencement would mean payable at the commencement of Act IV of 1938, that is 22nd March, 1938.

19. The question for consideration would then be whether the debt in respect of which the decree had been passed in the instant case was one payable at such commencement, that is, at the commencement of Act IV of 1938.

20. The term 'debt' has been defined in Section 3(iii) as meaning '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....' Under the definition a debt is one which is due from an agriculturist.

21. The learned advocate for the respondent contended that the debt which was payable in future would be a debt that would be due and in support of that proposition cited Banchharam Majumdar v. Adyanath Bhattacharjee I.L.R. (1909) Cal. 936, where it was held that a sum of money which was certainly and in all events payable was a debt, without regard to the fact whether it was payable then or at a future time. That may be so. But the question in the present case is whether the debt, was one which would come within the provision of Section 19(2) of the Act. Section 19(2) restricts the power of amendment by the Court, to a case where the debt was payable before the commencement of the Act.

22. 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 2nd October, 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 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 a deposit and when it becomes payable.

23. The receipt of an amount by a banker constitutes him a debtor to the depositor and the money deposited would be payable as a debt either on demand or on the conditions stipulated between the parties.

24. In Sheldon on 'The Practice and Law of Banking' 6th Edition, at page 221, it is stated thus:

When a customer pays in money on deposit, the money cannot be considered as a fund held by the banker in trust for the customer. It is merely a loan to the banker and the customer is entitled to no more than the repayment of an equivalent sum at the time which the agreement between the two parties specifies.

A deposit is generally agreed to be paid either (i) on demand, or (ii), on notice of a stipulated period or (iii) after a fixed period. There is no doubt that in the last of the cases mentioned above the money would not become payable except-after the stipulated period. It is contended for the respondent that in the first two cases demand would not be a condition precedent for claiming the money payable as the words 'payable on demand' should be interpreted as meaning payable immethately. We cannot agree with that contention.

25. In Mohammad Akbarkhan v. Attarsingh (1936) 71 M.L.J. 712 : I.L.R. (1936) Lah. 557 , Lord Atkin observed that a demand by a depositor would be the normal condition of the obligation of the depositee to repay. His Lordship stated further:

Was this then a loan or was it a deposit payable on demand? It should be remembered that the two terms are not mutually exclusive. A deposit of money is not confined to a bailment of specific currency to be returned in specie. As in the case of a deposit with a banker it does not necessarily involve the creation of a trust, but may involve only the creation of the relation of debtor and creditor, a loan under conditions. The distinction which is perhaps the most obvious is that the deposit not for a fixed terms does not seem to impose an immethate obligation on the depositee to seek out the depositor and repay him. He is to keep the money till asked for it. A demand by the depositor would therefore seem to be a normal condition of the obligation of the depositee to repay.

26. In Ramaswami Chetti v. Manickam Chetti : (1938)1MLJ56 , it was held that the right to sue in a case of deposit did not accrue till there was a demand and a refusal. The obligation of a debtor in regard to a deposit has been considered by the Privy Council in Suleman Haji Ahmed Umer v. Abdulla Haji Rahimtulla (1940) M.W.N. 1000, where it was held that the test to decide whether the transaction was a loan or deposit, was to ascertain whether on the admitted facts there was an obligation on the part of the debtor to seek out the creditor and repay him, or whether he was to keep the money till the creditor applied for, and whether in a case there was no duty on the part of the debtor to seek out his creditor and repay him but only to do so if and when the creditor requested the payment, the case was one of a deposit. It would follow that there would be no obligation on the part of the depositee to pay the money to the depositor unless the terms of the contract of deposit were fulfilled, and in a case of deposit payable on demand unless a demand had seen made.

27. It was contended on behalf of the respondent that, although the money was payable under the deposit only on demand, there was no prohibition on the depositee from paying the money at any time he chose, and that as the amount so deposited could have been paid by the depositee at any time, it should be held that the money was one that was payable to him immethately after the deposit was made. He contended that the words 'payable before the commencement of the Act' occurring in Section 19(2) of the Act would mean money that could have been paid at the option of the debtor. That is not correct. The word 'payable' in that section would indicate money which the debtor was liable or obliged to pay. A mere option in the banker or debtor to pay cannot render the amount as one 'payable.'

28. It was then contended that in case of a deposit which was payable on demand, no actual demand was necessary as the Courts have entertained suits without the formality of demand or proceeded to attach or issue garnishee orders in respect of deposits in the hands of the depositees at the instance of a creditor of the depositor. In support of the contention reference was made to the decision in Guntur Marasimham v. Nyapati Narayana Rao Gaur (1925) 92 I.C. 405, where Venkatasubba Rao, J., observed that the making of the demand was entirely dependent upon the volition of the plaintiff and the period of limitation may be indefinitely prolonged, and a suit might be instituted without even a demand being made, in which case no question of limitation would arise, and the filing of the suit would itself amount to a demand. In Allah Ditta v. Sadhu Shah (1933) 147 I.C. 338, it was held that in regard to a deposit, even if no demand was made, the plaintiff should not be non-suited in the absence of any demand as the bringing of the suit would itself constitute a demand. In our opinion, these decisions cannot and do not support the proposition contended for, namely, that money in respect of the deposit would become 'payable' without a demand. They only state the proposition that where a suit had been filed the plaint in the suit could be deemed to be a demand, thus emphasising the necessity of a demand in respect of money due in regard to a deposit.

29. Deposits standing to the credit of a debtor could be attached in execution and the issue of a garnishee order would depend on the terms on which the deposit was held. That would depend on the debt being due or accruing due. A deposit payable on demand, on notice for a fixed period which had been given or one repayable at a future date would be attachable.

30. In Joachimson v. Swiss Bank Corporation L.R. (1921) 3 K.B. 110, it was held that the service of a garnishee order nisi was equivalent to a demand. In Jagannath v. Ram Dulari : AIR1956All63 , it was held that the word 'demand' when used in connection with a deposit really meant what it stated, that is, that the deposit was to be paid only when demanded. A demand would, therefore, be essential to make a deposit payable on demand 'payable'. Therefore, in the absence of a demand the debt could not be held to be payable. There is little doubt on the facts of the case that the money entrusted to the respondent's father was a deposit with a banker, which was not made payable until there was a demand therefor. It follows that it became payable on 2nd October, 1944. The provisions of Section 19(2) would not, in our opinion, apply to such a case. The decree in respect of such a transaction would not be liable to be scaled down.

31. The result is that the order allowing an amendment of the decree under Section 19(2) cannot be justified and it is set aside. The appeal is allowed with costs.


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