Case: S. Pl. Narayanan Chettiar Vs. M. Ar. Annamalai Chettiar

2. The facts which have led to this appeal are that a partnership firm, briefly described as M. Ar. Firm, whose partners were Arunachalam Chetty, his two sisters and Subramaniam Chetty, was carrying on the business of money lending. On the death of Arunachalam Chetty on 6-7-1916, Subramaniam Chetty, one of the surviving partners, took over the assets of the dissolved partnership firm at a valuation of Rs. 25,000 and carried on the business under the name and style of Pl. S. firm of which the partners were Subramaniam Chetty, Vellachi Achi, his two daughters and in 1919 Palaniappa, Chetty, father of the appellant, joined the partnership. The amount of Rs. 25,000 was credited in the accounts of the new partnership. On 19-4-1919, the accounts showed a balance of Rs, 16,369-12 as being due to the share of the decease Arunachalam Chetty which by the year 1935 swelled up to a figure of Rs.Subramaniam Chetty died in 1924 and the business was carried on after his death by his widow Lakshmi Achi and her daughter and Palaniappa Chetty. In l930 Palaniappa Chetty died and his sons joined the business in his place. Disputes arose between the partners in 1935 which were referred to arbitration and under an award given on 31-7-1935, Arunachalam Chetty and his sister were directed to pay to the estate of M. Ar. Rs. 34,958- 11-6 and the defendants, now appellant and his brother, a sum of Rs. 20,975-3 and corresponding entries were made in the account books of PI. S, Firm. In 1944 the plaintiff, now respondent, as the adopted son of Arunachalam Chetty filed a suit for recovery of the amount which the award had directed the defendants to pay. The defendants were the two sons of Palaniappa Chetty. They denied the adoption of the respondent to Arunachalam Chetty and also pleaded the bar of limitation.3. The trial Court held the adoption to be invalid and upheld the plea of limitation. The plaintiff took an appeal to the High Court which held the adoption to be valid and also held the suit to be within limitation. It remitted the case to the trial Court for determining certain issues and after the findings were received, the suit was decreed on 9-3-1951, for a sum of Rs.The appellant applied to the High Court for leave to appeal to this Court and also applied for stay. Leave was granted but stay was refused; as no security was furnished under the rules, the High Court later revoked the certificate granting leave.During the pendency of the appeal in the High Court, the Act of 1938 was amended by the amending Act by which new reliefs were given to agriculturist debtors. On 5-10-1951, the appellant made an application to the trial Court for scaling down the decretal debt under S.19 (2) of the Act which was added by the amending Act. The trial Court held that the decree could be scaled down under S.19 (2) of the Act, but it had no jurisdiction to grant that relief as the decree sought to be scaled down had been passed by the High Court. Against this order the appellant took an appeal to the High Court on 4-7-1952, and also made a separate application in the High Court for scaling down the decretal debt under S. 19 (2) of the Act. The High Court dismissed the application on 25-3-1953. The appellant then applied for leave to appeal under Art.133 of the Constitution but this was refused on 6-10-1953, and this Court granted special leave on 19-4-1954.5. The ground on which the High Court refused relief tinder S. 19 (2) of the Act was that "the retrospective operation of S. 19 (2) was controlled by S. 16 of the Act XXIII of 1948" and that cl. (ii) of S.16 applied and as the appellant whose appeal was pending at the commencement of the amending Act did not apply for scaling down before the decree was passed although he had the opportunity to do so, his application subsequent to the decree was barred by the principle of res judicata. The provision of S.19 (2) of the Act which gave the right to obtain relief of scaling down notwithstanding the provisions of the Code of Civil Procedure to the contrary was held inapplicable, because S.19(2) of the Act was itself "limited by the provisions of S. 16 of Act XXIII of 1948." The High Court observed that although the appellant had filed an additional written statement claiming relief under the Burma Debt Laws, no prayer was made for any relief under the Act. The High Courtparty who had an opportunity to raise a plea but did not raise the plea is precluded by principles of res judicata from raising the plea over again at a subsequent stage. But it is said that the principle of res judicata has no application to the present case as S.19 (1) which is incorporated by reference in S.19 (2) says that a petitioner would be entitled to the relief given to him under that section notwithstanding anything stated in the Code of Civil Procedure. But this argument ignores the fact that the scope of S. 19 (2) is itself limited by the provisions of S. 16 of Act XXIII of 1948."The High Court then referred to the Full Bench judgment in Sriramreddi v. Sriramreddi, ILR (1942) Mad. 346 ; (AIR 1941 Mad. 929  ), where at p.354 (of ILR Mad.) : (at p. 932 of AIR,) it wasit the application is not made before the judgment is delivered, it will be too late for a judgment-debtor to raise the question. The final judgment and the decree must be drawn up in accordance therewith."

Court's reasoning:
Unfortunately, the language of S.16 is not very clear and lends itself to difficulties of interpretation.We agree with the High Court that S. 16 of the amending Act in the amendments made by that Act in the sense that those amendments apply to the suits and proceedings described in the three clauses of S.Sub-section (2) of S. 19 was one of the amendments which was inserted by the amending Act and therefore the appellant-debtor must establish that he is entitled to relief under sub-s. (2) of S. 19 because his case comes under one of three clauses of S.The High Court held that cl. (ii) of S. 16 applied in the present case but the appellant-debtor could and should have raised the plea for relief under thethe appeal was pending in the High Court and as he did not do so, he was barred from claiming relief under S.19 (2) on the principle of res judicata. We do not think that this view is correct and our reasons are the following.7. The three clauses of S. 16 are independent of each other and(1) refers to suits and proceedings instituted after the commencement of the amending Act, the relevant date being January25.Clause (i) has no application in the present case and need not be further considered.Clause (iii), it seems clear to us, applies to suits and proceedings in which the decree or order passed had become final, but had not been executed or satisfied in full before January 25, 1949: this means that though a final decree or order for repayment of the debt had been passed before January 25, 1949, yet an agriculturist debtor can claim relief under the Act provided the decree has not been executed or satisfied in full before the aforesaid date. It should be remembered in this connection that the word debt in the Act has a very comprehensive connotation. It means 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. etc. It is, therefore, clear that the word debt includes a decretal debt. On the view that cl. (iii) applies in those cases only where a final decree or order for repayment of the debt had been made before January 25, 1949, it has no application in the present case; because the decree for repayment of the debt was passed on March 9, 195l., which was after January 25, 1949.8. We then go to cl. (ii ), This clause is in two parts and talks of two different situations; one is when no decree or order has been passed and the other is when the decree or order passed has not become final. There is, however, a common element, and the common element is that cl. (ii) refers to suits and proceedings instituted before January 25,do not think it necessary to consider the alternative argument of learned counsel for the appellant;because we are of the view that having regard to the other provisions of the Act, the words "decree or order" occurring in cl.(ii) must mean decree or order for repayment of a debt. What then is the position before us ? As we see it, the position is this. Here is a suit which was instituted before the commencement of the amending Act, namely, JanuaryThe suit was pending on that date and no decree or order for repayment of the debt had been made by that date. The decree for repayment of the debt was made some two years after, on March 9, 1951 Therefore, the two conditions laid down for the first part of cl. (ii) are present and it clearly applies to the present case. The High Court recognised this, but thought that the appellant-debtor could ask for relief at only one stage, namely, when the appeal was pending and before a decree had been passed and if the appellant-debtor did not do so, he was barred from claiming any relief on the principle of res judicata. It is here, we think with great respect, that the High Court has gone wrong. The relief under S. 19 (2) in, terms, is a relief which can be claimed after a decree for repayment of the debt has been passed. It says that the provisions of sub- s.(1) shall apply to cases where, after the commencement of the Act, a court has passed a decree for the repayment of a debt payable at such commencement. The commencement of the Act referred to in S. 19 (2) is the commencement of the main Act, (Mad. IV of 1938). It is not disputed that the debt in the present case was payable at such commencement and the court had passed a decree for repayment of that debt after such commencement. Section 19 (2) in terms applied, and by reason of the provisions of(1) of S.19 which were also attracted to the present case, the appellant-debtor was entitled to the relief asked for notwithstanding anything contained in the Code of Civil Procedure, 1908. It is true that the doctrine of res judicata is a doctrine of wide import- and S. 11 of the Code of Civil Procedure is not exhaustive of it. There is high authority for the view that the principle of res judicata may apply apart from the limited provision of the Code of Civil Procedure, but the question before us, as we see it, is no so much the application of the principle of res judicata, as the proper construction of S. 19 of the Act and cl. (ii) of S. 16 of the amending Act. In our opinion, S. 19 in express terms entitles the appellant-debtor to claim a relief under the provisions of the Act when court has passed a decree, after the commencement of the Act, for the repayment of a debt payable at such commencement.are of the view that cl. (ii) of S. 16 describes the nature of suits or proceeding in which the amendments shall apply and the pendency of a suit or proceeding on a particular date after January 25, 1949 is not the true test. The true test is whether the suit or proceeding was instituted before January 25, 1949 and whether in that suit or proceeding no decree or order for repayment of a debt had been passed before that date. That test having been fulfilled in the present case, cl. (ii) of S. 16 of the amending Act did not stand in the way of the appellant when he asked for relief under S. 19 (2) of the Act.concur in the view expressed above that cl. (iii) of S. 16 applies to decrees or orders which, though they had become final before 25th January 1949; are still in the stage of unfinished execution and at the stage at which satisfaction has not been fully received, and cl. (ii) applies to suits and proceedings which were instituted before 25th January 1949, but in which no decree or order had been passed or the decree or order passed had not become final before that date.We consider it unnecessary in the present case to go into the further question whether cl. (ii) refers to decrees and orders of a declaratory nature, which are not executable but which have become final before 25th JanuaryThat is a question which does not fall for decision in the present case and we express no opinion thereon.These are our reasons for holding that the view taken by the High Court is not correct and the appeal must, therefore, be allowed and the case sent back to the High Court for consideration on merits in accordance with law. The appellant will get his costs of this Court; costs incurred in the High Court before and hereafter will be dealt with by the High Court at the time of the final decision.