Case: P. S. L. Ramanathan Chettiar &amp; Ors Vs. O. Rm. P. Rm. Ramanathan Chettiar

The respondents, father made a deposit of Rs. 5,000 with the appellants father in 1926 repayable with interest at Rangoon Nadappu rate. A demand was made for re-payment on 1944 and a suit for recovery of the amount was filed on March 16, 1945. The trial court decreed the suit in the year 1946 for Rs. 11,459-14-0. The appellants father preferred an appeal therefrom to the High Court and pending disposal of the same deposited Rs. 3,500 in court on April 16, 1947. The High Court confirmed the decree on September 14, 1951. There is some dispute about the actual date but there is no contest that the appellants father deposited Rs. 11,098-10-2 to obtain stay of execution of the decree. On August 20, 1947 the court passed an order to the effect that the decree-holder would be allowed to draw out the amount on furnishing security. Although an Act styled. the Madras Agriculturists Relief Act, 1938 was passed on 22nd of March of that year wherein provision was made for giving relief to agriculturist debtors, inter alia, by scaling down decrees passed against them, no attempt was made by the defendants to take advantage thereof either in the trial court or before the court of appeal. On execution proceedings being commenced, the judgment-debtors filed an application under the aforesaid Act for scaling down the decree under Section 19 (2) thereof. The decree-holder raised various objections thereto. The Subordinate Judge who heard the application in the first instance turned down the contentions of the decree-holder and modified the decree. An appeal therefrom was preferred by the decree-holder to the Madras High Court. There being conflicting decisions in the High Court as to whether a judgment-debtor who had not claimed relief under the Act before the passing of the decree, could do so subsequently thereto, the appeal was directed to be heard by a Full Bench. An appeal from another decision of the same High Court embracing the identical question was disposed of by this Court in Narayana Chettiar v. Annamalai Chettiar, 1959 Supp 1 SCR 237 = (AIR 1959 SC 275  ). Thereafter referring to the Act of 1938 as also to Section 16 of Madras Act XXIII of 1948 amending the Act of 1938, it was held that"the appellant was entitled to the benefit of S. 19 (2) of the Act read with Section 16 Clause (ii), of the Amending Act."3. The Full Bench of the Madras High Court constituted for the purpose of hearing the appeal from the order of the Subordinate Judge held that the lower court was competent to give relief under Section 19 (2) of the Act by way of scaling down the decree passed by the High Court, and referred the matter back for decision by a Bench. The Bench decided inter alia that the application was properly presented before the Subordinate Judge i. e., the court which passed the decree. It refused to go into the question as to whether the plaintiff was an agriculturist in view of the concession before the Full Bench. It further negatived the plea that the decree had become satisfied by payment of money into court on July 24, 1947. It however reversed the order of the Subordinate Judge by holding that the money entrusted to the plaintiffs father being a deposit with a banker was not payable until there was a demand for it: the money became payable only on 2nd October, 1944 i. e., after the coming into force of Act IV of 1938 and consequently the provisions of Section 19 (2) of the Act were not applicable and that the decree was not liable to be scaled down. The present appeal is against this order.

Court's reasoning:
9. On behalf of the respondent, it was argued that the word debt implied a preexisting loan and as such it could not apply to a deposit. The definition in S. 3 (iii) clearly negatives such a proposition. If loans alone were meant to be covered by the use of the word debt, there was no reason to exclude rent from the purview of the expression. In that case there would have been no need to mention expressly revenue tax or cess or liability arising out of a breach of trust or in respect of maintenance under a decree of court or otherwise" in S. 412. On principle, it appears to us that the facts of a judgment-debtors depositing a sum in court to purchase peace by way of stay of execution of the decree on terms that the decree-holder can draw it out on furnishing security, does not pass title to the money to the decree-holder. He can if he likes take the money out in terms of the order, but so long as he does not do it, there is nothing to prevent the judgment-debtor from taking it out by furnishing other security, say, of immovable property, if the court allows him to do so and on his losing the appeal putting the decretal amount in court in terms of Order 21 Rule 1 C. P. C. in satisfaction of the decree13. The real effect of deposit of money in court as was done in this case is to put the money beyond the reach of the parties pending the disposal of the appeal. The decree-holder could only take it out on furnishing security which means that the payment was not in satisfaction of the decree and the security could he proceeded against by the judgment-debtor in case of his success in the appeal. Pending the determination of the same, it was beyond the reach of the judgment-debtor14. The observations in Chowthmulls case, ILR 51 Cal 1010   = (AIR 1925 Cal 416  ) (supra) do not help the respondent. In that case, the appeal was not proceeded with by the Official Assignee. Consequently, the decree-holder could not be deprived of the money which had been put into court to obtain stay of execution of the decree as but for the order, the decree-holder could have levied execution and obtained satisfaction of the decree- even before the disposal of the appeal15. The last contention raised on behalf of the respondent was that at any rate the decree-holder cannot claim any amount by way of interest after the deposit of the money in court. There is no substance in this point because the deposit in this case was not unconditional and the decree-holder was not free to withdraw it whenever he liked even before the disposal of the appeal. In case he wanted to do so, he had to give security in terms of the order. The deposit was not in terms of Order 21, Rule 1 C. P. C. and as such, there is no question of the stoppage of interest after the deposit.