Case: Lakshmi Achi And Others Vs. T.V.V. Kailasa Thevar And Others

This is an appeal by special leave from the judgment and order of the Madras High Court dated December 2, 1955 by which the said Court set aside the order of the learned District Judge of East Tanjore dated August 30, 1950 passed on an application made by the 1st respondent herein, under s. 19 of the Madras Agriculturists Relief Act (Act IV of 1938), hereinafter called the principal Act, as amended by the Madras Agriculturists Relief (Amendment) Act of 1948 (Act XXIII of 1948). By the said order the learned District Judge dismissed the application as unsustainable in law. The High Court set aside that order on the ground that the respondents application for the scaling down of the decree passed against him should not have been dismissed in limine and the learned District Judge should have gone into the question whether the respondent was an agriculturist entitled to the benefit of the principal Act as amended in 1948The material facts are not very much in controversy, but this is one of those cases in which a long history must be stated for the appreciation of a very short point involved in the case. The short point involved is, whether the application made by the 1st respondent herein to the District Judge of East Tanjore in O.S. No. 30 of 1934 on December 6, 1950 was unsustainable in lawWe may now state the long history. The appellants before us are the representatives of the original plaintiffs who as mortgagees instituted a suit (being O.S. No. 30 of 1934) in the court of the District Judge, East Tanjore for the enforcement of a mortgage against respondent No. 1, who was defendant No. 1 in the suit, and six other persons. The mortgage bond upon which the suit was brought was executed by defendant No. 1 for himself and his minor undivided brother, defendant No. 2, and also as authorised agent on behalf of defendants 3 to 7, who were interested in a joint family business. The suit was contested by all the defendants, except defendant No. 1 against whom it proceeded ex parte. A preliminary decree was passed on May 15, 1937 by which a sum of Rs. 1, 08, 098/- was directed to be paid by defendant No. 1 and defendants 3 to 7, in default of which the plaintiffs were declared entitled to apply for a final decree for sale of the mortgaged property and the suit was dismissed as against defendant No. 2 Against this decree, two appeals were taken to the Madras High Court, one by defendants 3 to 7 (being Appeal No. 48 of 1938) who contended that the mortgage was not binding on them or on their shares in the joint family property; and the other by the plaintiffs (being Appeal No. 248 of 1938), who challenged the propriety of the judgment of the trial Judge in so far as it dismissed their claim against defendant No. 2. During the pendency of these appeals the principal Act came into force and applications were made by defendants 2 to 7 to the High Court praying that in the event of a decree being passed against them, the decretal debt might be scaled down in accordance with the provisions of the principal Act. Defendant No. 1 who did not appeal at any stage of the proceedings did not make any such application. The High Court forwarded these applications to the lower court for enquiry and asked for a finding on the question whether the applicants were agriculturists and if so, to what extent the decretal dues should be scaled down. The District Judge made the necessary enquiry and submitted a finding that the applicants were agriculturists and that the debt, if scaled down would amount to Rs. 49, 255/- with interest thereon at six percent per annum from October 1, 1937 exclusive of costs. On receipt of this finding the appeals were set down for final hearing and by their judgment dated March 25, 1942 the learned Judges of the Madras High Court accepted the finding of the court below and held that defendants 2 to 7 were entitled to have the debt scaled down, but as no application had been made on behalf of defendant No. 1 he was held entitled to no relief under the principal Act. A decree was drawn up in accordance with this judgment. The amount due by defendants 2 to 7 was stated to be Rs. 49, 255/- with interest thereon at six per cent per annum, while so for as defendant No. 1 was concerned the decree of the trial Judge was affirmed subject to a slight modification regarding the rate of interest. Defendant No. 1 thereupon filed an application in the court of the District Judge, East Tanjore, claiming relief under the principal Act alleging that he too was an agriculturist and hence entitled to the benefits of the Act. This application was dismissed on February 25, 1943 on the ground that as a decree had already been passed by the High Court definitely negativing his claim to any relief under the principal Act, such application was not entertainable by the lower court. The next step taken by defendant No. 1 was to file an application in the High Court itself praying for setting aside the ex parte decree which excluded him from the benefits of the principal Act. This application was rejected by the High Court on December 13, 1943. As no payment was made in accordance with the preliminary decree passed by the High Court, a final decree in terms of the same was passed by the District Judge on September 25, 1943. Proceedings for execution of this final decree were started on August 16, 1944 when an execution petition was filed in the court of the District Judge, East Tanjore. Some of the mortgaged properties were sold and purchased by the decree-holders for a total sum of Rs. 12, 005/- and part satisfaction of the decree was entered for that amount. In the course of these proceedings certain terms of settlement were offered by the judgment-debtors. The estate of the decree-holders was then in the hands of the receivers, and it appears that the receivers agreed, with the sanction of the court to receive Rs. 24, 000/- only from or on behalf of defendant No. 2 and release him and his share of the mortgaged property from the decretal charge. Likewise the receivers agreed to receive Rs. 48, 000/- from defendants 3 to 7 and to release them and their properties from the decretal debt. With regard to defendant No. 1 also the receivers agreed to accept Rs. 37, 500/- and it was agreed that if one Yacob Nadar paid the amount on behalf of defendant No. 1 on consideration of the decree against defendant No. 1 being assigned to him, the receivers would accept the same. No such payment was however made on behalf of defendant No. 1. But a sum of Rs. 24, 000/- was paid on behalf of defendant No. 2 and his properties were exonerated from the decree. Defendants 3 to 7 also paid a sum of Rs. 48, 000/- and odd in two instalments in discharge of their decretal debt. The three amounts paid by defendants 2 to 7 totalled Rs. 72, 610-12-0. On March 6, 1947 defendant No. 1 deposited in court a sum of Rs. 3215/- and put in a petition under s. 47 and Order XXI r. 2 C.P.C. praying that the amount deposited by him together with the payments already made by defendants 2 to 7 completely wiped off the amount due under the decree as scaled down by the High Court in favour of defendants 2 to 7; defendant No. 1 prayed that as the decree was one and indivisible, full satisfaction of the decree should be recorded exonerating the mortgaged property and also defendant No. 1 himself from any further liability in respect of the decretal debt. The position taken up by defendant No. 1 in substance was that the mortgage debt was one and indivisible and even though different amounts were mentioned as payable by two groups of defendants in the decree, the decree-holders were bound under the terms of the decree to release the entire mortgaged property even on payment of the amount directed to be paid by defendants 2 to 7. This contention of defendant No. 1 was negatived by the District Judge, but was accepted by the High Court on appeal which allowed the application of defendant No. 1 and directed that the court below should enter full satisfaction of the mortgage decree. The decree-holders then came up to this court in appeal (C.A. No. 32/1950) and the judgment of this court is reported in V. Ramaswami Ayyangar and others v. T. N. V. Kailasa Thavar [[1951] S.C.R. 292.]. This court held that though the general law undoubtedly is that a mortgaged decree is one and indivisible, exceptions to the rule are admitted in special circumstances where the integrity of the mortgage has been disrupted at the instance of the mortgagee himself. This court further held that there was nothing wrong in law in scaling down a mortgage decree in favour of one of the judgment-debtors while as regards the others the decree way kept intact; the principal Act was a special statute which aimed at giving relief not to debtors in general but only to a specified class of debtors, namely, those who are agriculturists as defined by the Act and to this extent it trenched upon the general law. The result of the decision of this court was that the decree stood unscaled as against the 1st defendant. When the appeal in the Supreme Court was pending, the amending Act of 1948 was enacted and it came into force on January 25, 1949. We shall presently read the provisions of this amending Act. On the strength of these provisions defendant No. 1 made an application again to scale down the decretal debt. This was application No. 79 of 1950. It was this application which the learned District Judge held to be unsustainable in law. On appeal, the High Court held that the application was sustainable and an enquiry should be made whether defendant No. 1 is an agriculturist within the meaning of the principal Act. The present appeal is directed against this order of the High Court.

Court's reasoning:
In the case before us cl. (iii) of s. 16 clearly applies because the final decree which was passed on September 25, 1943 had not been satisfied in full before the commencement of the amending Act, 1948, that is, before January 25, 1949. Therefore, by reason of cl. (iii) s. 16 of the amending Act of 1948 respondent No. 1 was entitled to the benefit of sub-s. (2) of s. 19, and he cannot be deprived of that benefit because prior to the new right given to him by the amending Act of 1948 his applications for getting relief under the principle Act had been rejectedWe have, therefore, come to the conclusion that the view expressed by the High Court is the correct view and respondent No. 1 is entitled to the benefit of sub-s. (2) of s. 19 read with cl. (iii) of s. 16 of the amending Act of 1948, provided he establishes that he is an agriculturist within the meaning of the principal Act.