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K. Jagannatham Chetty Vs. V. Parthasarathy Iyengar (Dead) and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberC.S. No. 42 of 1933 and Appln. No. 2844 of 1950
Judge
Reported inAIR1953Mad777; (1952)2MLJ385
ActsDebt Law; Madras Agriculturists' Relief (Amendment) Act, 1948 - Sections 16; Madras Agriculturists' Relief Act, 1938 - Sections 7, 8 and 19
AppellantK. Jagannatham Chetty
RespondentV. Parthasarathy Iyengar (Dead) and ors.
Appellant AdvocateT.G. Aravamudha Iyengar, Adv.
Respondent AdvocateD. Ramaswami Iyengar and ;K. Srinivasa Rao, Advs.
DispositionApplication dismissed
Cases ReferredColonial Sugar Refining Co. v. Irving
Excerpt:
.....made by act shall apply to suits instituted before commencement of amendment act in which no final decree passed before such commencement - in present case final decree already passed and only execution proceedings are pending - application dismissed. - - in any event, the present execution proceedings commenced after the commencement of the act, that being an application of 1949. 4. learned counsel for the applicants contends that in any event the applicants will come under the ambit of clause (iii) of section 16. clause (iii) says that theamendments made by this act shall apply to all suite and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this act (amendment act 23 of 1948). if it refers to a suit..........of the judgment debtors. preliminary decree in the above suit was passed on 31-7-1934, and the final decree was passed on 12-2-1935. there was a balance of rs. 6,759-5-0 claimed under the decree. the mortgage property was brought to sale and the proclamation was settled on 25-4-1950. the sale has been stayed by my order in view of this application. the judgment-debtors took out application no. 1147 of 1938 under section 19 of act 4 of 1938 and an order was made on 4-9-1939 scaling down the debt. an appeal was preferred, o. s. a. no. 57 of 1940 by one of the judgment-debtors against the order scaling down the debt and on 28-2-1941, the appellate court found on scaling down the debt that a sum of rs. 3,391-3-0 was due on 1-10-1937 and further ordered the judgment-debtors to pay.....
Judgment:
ORDER

Krishnaswami Nayudu, J.

1. This application is for scaling down the mortgage decree debt in C. Section No. 42 of 1933, and the applicants are some of the judgment debtors. Preliminary decree in the above suit was passed on 31-7-1934, and the final decree was passed on 12-2-1935. There was a balance of Rs. 6,759-5-0 claimed under the decree. The mortgage property was brought to sale and the proclamation was settled on 25-4-1950. The sale has been stayed by my order in view of this application. The judgment-debtors took out application No. 1147 of 1938 under Section 19 of Act 4 of 1938 and an order was made on 4-9-1939 scaling down the debt. An appeal was preferred, O. S. A. No. 57 of 1940 by one of the judgment-debtors against the order scaling down the debt and on 28-2-1941, the appellate Court found on scaling down the debt that a sum of Rs. 3,391-3-0 was due on 1-10-1937 and further ordered the judgment-debtors to pay interest thereon at 6 per cent per annum from 1-10-1937 with proportionate costs of the parties. The amount now under the proclamation of sale represents the said sum of Rs. 3,391-8-0 with interest and costs of further proceedings.

2. Objection is raised to this application on the-ground that the decree debt having once been scaled down by virtue of an order of this Court in O. S. A. No. 57 of 1940, there can be no further application for scaling down. The applicants contend that by reason of the amending Act (Act 23 of 1848) they have become entitled to apply and if the amended provisions as to the method and principles are applied for the sealing down, there will be nothing due under the decree and the whole amount at it stood on 1-10-1937, would stand wiped out. Learned counsel for the applicants relics on Section 16, Clauses (ii) and (iii) of the amending Act (Act 23 of 1948) and states that he is entitled to maintain this application and if this application is held, to be maintainable, by virtue of the application of the provisions of Explanation 1 which hare been newly incorporated in the amending Act, the amounts paid towards the decree must be appropriated towards the principal and if so appropriated there will be nothing due, since under Clause (i) of Section 8, all interest due up to 1-10-1937 must be deemed to have been discharged.

3. The first point for consideration is whether the present suit out of which this application is taken out comes under that class of suits mentioned in Section 16 of the amending Act 23 of 1948. Clause (ii) of Section 16 states that the amendments made by this Act shall apply to 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 passed has not become final, before such commencement. This clause is relied upon and it is submitted that even though, the decree in C. S. No. 42 of 1933 has become final before the commencement of this Act, still the execution proceedings are pending and as such they have not become final and that therefore the applicants are entitled to maintain this application for scaling down. I am unable to agree with the learned counsel that execution proceedings are contemplated in the word 'proceedings' in Clause (ii) The proceedings in Section 16 must relate to proceedings instituted for repayment of a debt and not to execution proceedings which are for enforcement of a decree or order. That by 'proceedings' execution proceedings are not intended is also clear if'' reference is made to Clause (3) when execution of a decree or order arising out of a suit or proceeding is separately contemplated. In any event, the present execution proceedings commenced after the commencement of the Act, that being an application of 1949.

4. Learned counsel for the applicants contends that in any event the applicants will come under the ambit of Clause (iii) of Section 16. Clause (iii) says that theamendments made by this Act shall apply to all suite and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act (Amendment Act 23 of 1948). If it refers to a suit instituted before the commencement of the Act and the decree has not been satisfied before the commencement of the Act, namely, before January 1, 1949 the date of the coming into force of Act 23 of 1948, then the applicants will be entitled to apply and get the benefit of the extended provisions of Section 8. Learned counsel for the respondent has drawn my attention to a Bench decision of this Court in -- 'C. M. A. Nos. 316 and 391 of 1947 (A)' in which the scope of Section 16 of the amending Act was considered. Their Lordships in the course of the judgment state as follows:

'Section 16 deals with three categories of proceedings. Clause (i) deals with suits and proceedings after the commencement of the Act. Clause (ii) with suits and proceedings instituted before the Act but the decree or order had not become final, and Clause (iii) with suits and proceedings instituted before the Act but the decree or order was not fully satisfied. This clear-cut classification indicates that clauses (ii) and (iii) are distinct and mutually exclusive and are not intended to overlap. If the argument of Mr. Ramachandra Rao be accepted, Clause (ii) of Section 16 would become unnecessary as all possiblecases coming under Clause (ii) would equally be covered by Clause (iii). On the other hand, the contention on behalf of the decree-holder would give effect to all the provisions of the Act, at the same time avoiding conflict between the various clauses of the section. If under Clause (ii) suits and proceedings wherein decrees ororders have become final are excluded from the operation of the Act, it would be unreasonable to hold that under Clause (iii) they are brought in On the other hand, it would be giving full effect to Clause (iii) and avoiding conflict between the provisions if it was confined to suits and proceedings in which the decree or order had not become final. In other words the section, gives retrospective operation in regard to suits and proceedings before the Act in which the decrees or orders had not become final and also had not been fully satisfied. If the decree or order has become final Clause (iii) has no application, as Clause (ii) saves such decree or order. We therefore hold that under Section 16 the retrospective operation of the Act is only confined to suits and proceedings before the Act in which decree; or orders have not become final and also not fully satisfied'

In view of this Bench decision the applicants are out of Court, since it is a case where the decree had become final before the commencement of the Amending Act though not fully executed. What the learned Judges say is that the section gives retrospective operation only in regard to suits and proceedings before the Act in which the decrees or orders had not become final and also had not been fully satisfied.

In -- 'Ramaswami Pilial v. Sankara Mudaliar', : AIR1951Mad635 (B) which is another decision of the same Bench, the scope of Section 16 of the amending Act was considered; but not fully as had been considered in the judgment which has been referred to. In that case there was a prior mortgage decree in 1934 to which the second mortgagee was added as a party defendant. A decree was passed in favour of the mortgagee plaintiff and the amount that was due to the second mortgagee was declared under that decree at the sum of Rs, 6,933-6-0. But by reason of sale proceeding after payment to the mortgagee decree holder a sum of Rs. 3,417-18-8 alone was available for payment to the second mortgagee defendant. The second mortgagee, after appropriating the said amount which was paid out of the balance of the sale proceeds in pursuance of the mortgage decree, crediting a portion of it towards interest and a portion to the principal, and for the balance of the sum due under his mortgage as declared in the earlier mortgage suit, he Instituted a fresh suit in 1944 long after the decree in the earlier mortgage suit was executed and properties sold. By the time the matter came up on appeal the amending Act (Act 23 of 1948) had been passed and the question arose there on behalf of the judgment-debtors whether, under Section 16 of the Act, it would be open to them to to re-open the payment of money and the appropriation of the same made in the earlier suit. In the course of the judgment the learned Judges state as follows:

'Mr. Bashyam Iyengar's argument was that in so far as the payment of Rs. 3,477-13-8 was concerned it was paid in execution of the decree in O. Section No. 50 of 1934 (earlier suit) and that the decree was satisfied and therefore it could not be re-opened. Some of the relevant facts may usefully be recapitulated.....There is an underlying, fallacy in the argument of Mr. Bhashyam Iyengar. For the purpose of Section 16 the suit we are concerned with is the suit wherein we are asked to apply the provisions of the Madras Agriculturists relief Act and therefore Clause (2) of Section 16 directly applies. The only question with regard to those proceedings is whether the pendency or the closure of the proceedings in O. S. No. 50 of 1934 has any bearing on the application of Section 16. The only question with regard to those proceedings is whether the payment of money and the appropriation of the amount by the creditor can be reopened under the Madras Agriculturists' Belief Act or whether this Court is precluded from doing so by virtue of some principle other than that contained in the provision's of the Madras Agriculturists Relief Act. We cannot, see any principle which compels us to hold that the appropriation made in O. S. No. 50 of 1934 cannot be re-opened in this suit, if Explanation (I) applied; nor Mr. Bashyam is able to suggest one.'

While stating that what they were called upon to consider was the scaling down of the decree, the learned Judges at the end of the judgment observe as follows:

'Assuming that Bhashyam's argument is sound, even then, it would not advance his case any further. As we have already stated, the decree was for a sum of Rs. 6,933-6-0 (decree in the earlier suit) but what was paid towards the decree was only Rs. 3,477-13-8 and therefore there was a large amount still due to the decree-holder. Clause (3) of the Act would apply to all suits and proceedings in which the decree or order passed has not been executed or satisfied, in full before the commencement of the Act. As the decree has not been satisfied in full, the Act applied.'

The learned Judges were apparently referring to the decree in the earlier suit O. S. No. 50 of 1934 when they made these observations, holding Impliedly that Clause (3) of the Act related not only to suits which had become final but also to all suits instituted prior to the commencement of the Act, but so long as the decrees had not been executed or satisfied, in full. By virtue of their observations in the last paragraph, the learned Judges were of opinion that Clause (3) of the Act has an extended scope which covers all such suits. There is 3, conflict of the conclusions arrived at in -- : AIR1951Mad635 (B)' with the subsequent Judgment in -- 'C. M. A. Nos. 316 and 391 of 1947 (Mad) (A)'. But as already pointed out the latter Judgment is a considered Judgment on the scope and extent of Section 16.

5. It is, however, contended by Mr. Aravamuda Ayyangar that the position as taken In -- : AIR1951Mad635 (B)' is the correct one in view of the language of Clause (iii) of Section 16. There was no re'ason, it is urged and there is force in the argument for the enactment of a separate sub-clause, sub-clause (iii) if it were intended that what was contemplated in Sub-clause (iii) had already been covered by Sub-clause (ii). There is equally force in the observations of the learned Judges in --'C. M. A. Nos. 316 and 391 of 1947 (Mad) (A)' that: 'Clause (ii) of Section 16 would become unnecessary as all possible cases coming under Clause (ii) would equally be covered by Clause (iii).' It is enough to state that Clause (iii) as it is worded doss not prima facie exclude the class of cases referred to by the learned counsel for the applicants namely, all suits and proceedings in which decrees or orders are passed instituted before the commencement of the Act or in which the decrees or orders passed have not been satisfied in full before the commencement of the Act. In view of the Bench decision, I do not propose to give any opinion on. the construction of the Act, but I proceed to consider the application on the assumption that it comes under either Clause (ii) or Clause (iii) of Section 16.

6. An agriculturist debtor is entitled, under Section 19(1) of the Act, to make an application to apply the provisions of the Act to any decree passed before the commencement of the Act (Act 4 of 1938) and ask that the decree may be amended consequent on the application of the provisions of this Act. Such an application had been made by the applicants in application No. 1147 of 1938 and the order had become final, by virtue of the final order in O. S. A. No. 57 of 1940. A sum of Rs. 9,000/-was paid prior to the date of the application No. 1147 of 1938 towards the decree, and the question that called for decision in that appeal was in what manner the said amount was to be appropriated. The learned Judges held that in respect of Rs. 8,500/- Rs. 5,000/- was to be appropriated toward the principal and Rs. 3,500 towards the interest. But there was the question of appropriation towards costs and it was observed that it was equitable that the amount appropriated towards principal and the amount appropriated towards interest should contribute rateably in making up the amount required for reappropriation towards costs. There has therefore been a conclusive finding as to how the appropriation ought to be made in respect of payments already made, namely Rs. 9,000/- before the date of the application, i.e., the application for scaling down was heard and applying the provisions of Act 4 of 1938, the debt was scaled down and the decree was directed to be amended with the findings thereon.

7. Learned counsel for the applicants relies on Explanation I to Section 8 and wants the same to be applied to the present application. The question is whether, after an application under Section 19 of the Act had been taken, heard and decided finally, it would be open to the applicants to file a similar application subsequently, taking advantage of certain amendments in the method of scaling down which have been introduced by the later amending Act. It may be pointed out that neither Section 16 of the amending Act nor Explanation I to Section 8 of Act 4 of 1938 gives in express terms retrospective operation to matter; which have been decided prior to the date of the amendment. It is a well established principle which is stated succinctly in Broom's Legal Maxims: (1) that no statute shall be construed so as to have retrospective operation, unless its language is such as plainly to require that construction and this involves the subordinate rule that a statute is not to be construed so as to have a greater retrospective operation than its language render; it necessary.

I do not think the language of either Section 16 or Explanation I to Section 8 compel me to construe that these provisions have a retrospective effect. In the absence of a retrospective effect, would it be necessary, or even proper, to apply this provision so as to re-open and unsettle matters which have been finally concluded by judgment of the court? The following passage from the judgment of Lord Robson in -- 'Lemm v. Mitchell, (1912) A G 400 (C) may be quoted: 'In the absence of appeal the judgment was a final determination of the rights of the parties and the ordinary principle that a man is not to be vexed twice for the same alleged cause of action applies unless it be excluded by the Legislature in explicit and unmistakable terms ......This language is only an expansion in rather emphatic terms, of the statement of principle affirmed by Tindal C. J. and is subject to the same qualification or exception as he expressed, namely, that it must not be taken to deprive persons of vested rights acquired by them in actions duly determined under the repealed law. It would require language much more explicit than that which is to be found in the Ordinance of 1908 to Justify a Court of law in holding that a legislative body intended not merely to alter the law; but to alter it so as to deprive a litigant of ft judgment rightly given and still subsisting.'

These observations have been cited with approval in -- 'Lakshman Krishnaji v. Balkrishna Rangnath', 36 Bom 617 (D) where the legal proceeding on a mortgage bond was rejected as the mortgage bond was held to be invalid & not enforceable, because it was attested by only one witness and not by two AS required by Section 59, Transfer of Property Act. That plaintiff, thereupon, brought a suit in the year 1905 for a declaration that his mortgage bond was valid and operative according to law and therefore enforceable. The suit came up in second appeal to the High Court which finally decided that the plaintiff's mortgage was void and therefore Inoperative under Section 59, Transfer of Property Act. In the meanwhile, the Government of Bombay issued a notification exempting certain Districts including the Poona District in which the mortgaged property was situate, from the operation of Section 59, Transfer of Property Act. The notification was given a retrospective effect from 1-1-1893. On the strength of the said notification, the plaintiff applied to the High Court for review of judgment and his application being rejected he, in the year 1910, instituted the suit to enforce his mortgage and both the lower Courts haying rejected the claim on the ground of res judicata, the plaintiff preferred a second appeal. It was held in that case

'that the decree passed by the High Court in 1908 still subsisted and was not affected by the Government notification although the notification had retrospective effect. The notification could not abrogate rights which had been judicially declared and had been merged in the decree.'

Chandavarkar, Acting C. J. in the course of his judgment observes at page 621 as follows:

'But the Government Notification cannot have a higher operation than a legislative enactment, which repeals a previous law either partially or wholy, the principle Js that it cannotaffect vested rights acquired under decrees. Thatprinciple, enunciated by Tindal C. J. in -- 'Kayv. Goodwin', (1830) 6 Bing 576 (E), has beenfollowed recently by the Privy Council in --(1912) AC 400 (C)'

Citing Tindal C. J. with approval, their Lordshipsof the Judicial Committee of the Privy Councilsay in -- (1912) AC 400 (C)', thatexplicit language on the part of the legislature isnecessary to warrant a Court

'in holding that a legislative body intended notmerely to alter the law, but to alter it so as todeprive a litigant of a judgment rightly givenand still subsisting.'

As to the scope of retrospective operation of the statute certain observations of the Privy Council in -- 'Delhi Cloth and General Mills Co. v. Income Tax Commissioner, Delhi (P), may usefully be extracted:

'The principle which their Lordships must apply in dealing with this matter has been authoritatively enunciated by the Board in -- 'Colonial Sugar Refining Co. v. Irving', (1905) AC 369 (G), where it is in effect laid down that, while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. Their Lordships can have no doubt that provisions which, if applied retrospectively, would deprive of their existing finality orders which, when the statute came into force were final, are provisions which touch existing rights.'

Here the order in O. S. A. No. 57 of 1940 having become final, the present applicants want to deprive the finality of that order and, in the words of their Lordships of the Privy Council such interference would touch the existing rights which had accrued to the respondent by virtue of the judgment of the appellate Court.

8. It is however stated by Mr. Aravamuda Ayyangar relying on Section 7 of the Act that effect may be given to the words 'Notwithstanding any law, custom, contract or decree of Court to the contrary', and 'decree of Court to the contrary'--would include the decree or order of the appellate Court in O. S. A. No. 57 of 1940. But so far as Section.? is concerned, the decree that is referred to in Section 7 is a decree passed prior to 'he commencement of the Act as regards payment of money due by any debtor to a creditor and it does not relate to any order passed after the commencement of the Act. Even if a preliminary mortgage decree had been passed prior to the commencement of the Act and has not become final, it has been held that the final decree cannot come within the scope of a decree in Section 7 as a final decree has nothing to do excepting to direct the sale of property and taking of accounts. But the language of Section 7 is clear and it has been held by decision of this Court that the decree in Section 7 refers to decrees passed prior to the commencement of the Act for repayment of a debt. Section 19 of the Act a it stood, only enabled the applicants judgment debtors to apply for scaling down of a debt in respect of a decree passed before the commencement of the Act. That was the reason why Clause (2) to Section 19 has been enacted by virtue of the amendment Act, XXIII of 1948, whereby the provisions of Sub-section (1) are also held to apply to cases where, after the commencement of this Act a Court has passed a decree for repayment of a debt payable at such commencement. The decree that was referred to either in Section 7 or in Section 19 was not a decree or order passed as a result of invocation of the provisions, of this Act, or as a result of an application made under Section 19 to decrees of Courts passed either before the commencement of the Act or after the commencement of the Act.

Here what is final is an order passed by this Court on an application made under Section 19 and not a decree passed by any Court either before or after the commencement of the Act relating to the repayment of a debt. There is nothing express or implied in the language of either Section 16 of the amending Act or in Explanation (1) to Section 8 of the Act to warrant or justify any number of applications being made under Section 19. I therefore consider that it is not open to the applicants, by virtue of the order in O. S. A. No. 57 of 1940, to file another application, they having already exercised their right in filing an application and having the decree scaled down.

9. It is further argued on behalf of the respondent that either Section 16 or Explanation I to Section 8 does not confer any new right, that the right, if any, is conferred under Section 19 and that right having already been exercised, no new rights are conferred the only right conferred now is under Section 19 (2) which however, does not apply to the present case, and that in any event, the application is unsustainable. I agree with Mr. Ramaswami Ayyangar learned counsel for respondent, that Explanation (1) to Section 8 does not confer any new right. Explanation (I) only states that instead of leaving the question of appropriation to be worked out in accordance with the principles of general law, a particular mode of appropriation should be made whereby every payment made by a debtor shall be credited towards the principal unless he has expressly stated in writing that such payment shall be in reduction of interest. There is specific mode of appropriation that is provided, for and directed to be followed under Explanation (I). It does not confer any new right. If there was a right to be exercised for the first time after the amending Act of XXIII of 1948, certainly it would be open to such an applicant to invoke the provisions of Explanation (I) and apply the same towards appropriation and not leave the matter to be decided by the general law as it was a case prior to the amendment. Excepting a sum of Rs. 425/- which has been paid after 1-10-1937 and adjustments of some small amounts which, however, would go towards the costs which have accrued since that date there is nothing which could be appropriated. The sum of Rs. 9,000/- paid had been directed to be appropriated and by reason of the direction, the decree having been amended, it is not open to the applicants to re-open the question of adjustment and appropriation.

10. In the result, the application is dismissedwith costs. Advocates fee is fixed at Rs. 100/-.


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