A. Mohammad Sheriff and Company, Limited and Others vs A.P.N. Abdul Jabbar and Others

Veeraswami, J.—These are connected appeals, one by the Plaintiff and the other by the Defendant, arising out of the same decree in a suit

for recovery of Rs. 50,462-87 nP. equivalent of 32,452 dollars. The Plaintiff claimed this amount on account of the price of the sales of goods to

the Defendant from his firms at Singapore between December 9, 1952 to February 13, 1953 and at Kuala Lumpur between August 6, 1952 and

June 8, 1953. The Plaintiff was carrying on business in both the places under the name and style of A. Mohammad Sheriff and Company, Limited.

and so too the Defendant in both carried on business under the name and style of Abdul Jabbar and Company. The Plaintiff instituted Suit No.

1532 of 1953 against the Defendant in the High Court at Singapore to recover the amount due to him. Though the summons was served on the

agents of the Defendant, the suit was not contested and was decreed ex parte on September 24, 1953 for 40,125 dollars and 54 cents including

costs. The Plaintiff had since received 7,673 dollars and 53 cents and the present suit was to recover the balance without claiming any interest in

accordance with the personal law of the parties. The suit having actually been instituted on December 7, 1957, the Plaintiff maintained that it was

within time, as, according to him, it was filed within six years of the date of the decree of the Singapore High Court and the son of the Defendant

had also acknowledged the debt in September and October 1954.

The suit was resisted by the Defendant on various grounds. He contended that as he had suffered loss and damage during the Japanese war, he

had to return to India on September 10, 1952 after closing down his business, and that his agents had authority only to wind up and close the

business, and sell the remaining stock but no authority to purchase any fresh stock. He had no notice of the suit transactions, even of the suit or of

the decree in the Singapore High Court and this decree is also bad in law. Further on October 29, 1953, at the instance of the Plaintiff and two

other creditors, a composition arrangement was entered into under which they acted as trustees and guarantors and sold the Defendant''s

properties through an auctioneer realizing considerable sums of money and that under this arrangement they had each agreed to accept 35 per cent

of their debts in full satisfaction. If what had been realized by the Plaintiff and appropriated by him in that way is taken into account, the entire debt

under the composition arrangement due to the Plaintiff would stand, wiped out and satisfied. The suit is, therefore, not maintainable. It was not

clear to the Defendant whether the suit was based on the judgment of the Singapore High Court or on the original transactions. If it was on the

foreign judgment, he would plead that it was not one on merits and could not form the basis of the suit claim u/s 13 of the Code of Civil Procedure.

In any case, the suit claim, asserted the Defendant, is barred by limitation since the last supply of goods from either of the places was more than

three years prior to the date of the plaint and there was no acknowledgment valid or otherwise by him. The Defendant also denied that he was an

agriculturist and stated that he had been assessed to income tax during the relevant years.

On these pleadings, the trial Court framed a number of issues and came to the conclusion that the suit dealings were true, valid and binding on

the Defendant that the composition arrangement put forward by the Defendant did not fructify, that the suit should be treated as one essentially on

the original cause of action and that the foreign judgment was not one on merits. On the question of limitation, it found that the acknowledgment of

the debt pleaded by the Plaintiff was not made out and that the suit claim, except in respect of four items of the transactions at Kuala Lumpur

between May 26, 1953, and June 8, 1953, was barred by limitation. On that view, it granted a decree for Rs. 7,412-67 nP. and dismissed the suit

in respect, of the balance of the claim. In the circumstances, both the Plaintiff and the Defendant have appealed to this Court to the extent the

decree is against the one or the other.

At the outset may be disposed of the question whether the suit claim was based also on the foreign judgment. We are unable to agree with the

trial Court that the foreign judgment has only been incidentally mentioned in the plaint. As we read it as a whole, in our view, there can be no doubt

that the Plaintiff rested his claim on the foreign judgment as well. The plaint has fully set out the facts on which that judgment was obtained. If the

Plaintiff had not relied on it, there was no need for him to state in the plaint that the summons in the Singapore suit was duly served on the agents of

the Defendant and that the suit was not contested but was decreed ex parte. This passage in the plaint is particularly significant:

This suit is in time since it is filed within six years of the date of the decree of the High Court of Singapore.... The cause of action for the suit arose

on September.24.1953, when the debt due by the Defendant to the Plaintiff was decreed by the High Court of Singapore.

This shows that the Plaintiff in his plaint relied on the foreign judgment not only as the cause of action therefore but also for the purpose of

computation of limitation. It is manifest that the plaint claim is based on the foreign judgment and, in the alternative, on the original cause of action.

Such a claim in the alternative, we think, is undoubtedly permissible, because there is no merger of the original cause of action in the foreign

judgment. It is well known that a foreign judgment has no force and does not operate as such. But it is regarded by a fiction of law as constituting a

contractual debt furnishing a cause of action for its recovery in native jurisdiction. But this contractual debt so deemed to come into existence by

reason of the foreign judgment is not in super session of the original cause of action. Thus is stated the law in VII Halsbury''s Laws of England

(third edition) at page 141:

Since the foreign judgment constitutes a simple contract debt only, there is no merger of the original cause of action, and it is therefore open to the

Plaintiff to sue either on the foreign judgment or on the original cause of action on which it is based, unless the foreign judgment has been satisfied.

The law is not different in this country and this English principle of Private International Law has been followed and applied in Nil Ratan

Mukhopadhayya v. Cooch Behar Loan Office, Ltd. ILR (1941) Cal. 171, 174. The learned Judges there said:

It is a well established principle of Private International Law that a foreign judgment only creates a new obligation to pay but does not extinguish

the original cause of action for the debt. A foreign judgment involves no merger of the original cause of action....

We hold that the suit claim has also been based on the alternative cause of action.

On that view, the further questions as to whether the foreign judgment is one within the meaning of Section 13 of the CPC and if it is not so,

whether the suit, in respect of the balance of the claim on which the Plaintiff had lost in the Court below, is within time, have to be considered The

trial Court proceeded on the basis that Counsel for the Plaintiff had conceded before it that the foreign judgment was not one on merits. Mr.

Ahmed Meeran for the Plaintiff-Appellant denies that there was any such concession. He contends that the judgment of the Singapore High Court

must be regarded as one on merits. Section 13 of the CPC makes a foreign judgment conclusive as between the parties thereto or their legal

representatives or such others as litigating under the same title, in respect of any matter which is directly adjudicated upon between them. But this

conclusive effect given to such a judgment is subject to certain exceptions one of which is Section 13(b) where it has not been given on the merits

of the case. A foreign judgment has been defined by the Code as a judgment of a foreign Court, and a judgment, as the statement given by a Judge

of the grounds of a decree or order. In order, therefore, for a foreign judgment to be one on merits it must be a statement given by a foreign Judge

of the grounds of his decree and such grounds should concern the merits of the case. When we speak of the merits of a case, what is generally

implied is the factual and the legal basis for assertion of a claim for a decree and its denial in pleadings of parties and evidence at trial. A judgment

based on no grounds or rested on a formal basis as for instance, as a penalty for striking off defence for certain permissible reasons or failure of

appearance on the part of a Defendant or failure to file a written statement and defend can hardly be an adjudication on the merits of the case in the

sense we mentioned. A foreign judgment cannot claim conclusiveness unless the adjudication is shown to be on a judicial consideration of the

tenability or justness of the claim in relation to the material on which it is based. In the application of this principle to a variety of cases, there would

normally be no difficulty, though decided cases do not appear to present a uniform picture.

In the instant case, however, we think we are relieved of a further discussion on the scope of Section 13(b) as the ratio of Mohamed Kassim

and Co. v. Seeni Pakir Bin Ahmed ILR (1926) Mad. 261, 271 (F.B.) seems directly to be applicable to it. That was a case of a judgment of the

Supreme Court of Penang. The Defendant was properly served of the summons in the case but did not appear to contest; not even a written

statement would seem to have been filed. There was no trial and no evidence was taken. A decree, however, followed as a matter, of course, on

the basis of which the Plaintiff there sought to obtain a decree from the Court of the Subordinate Judge of Ramanathapuram at Madurai. The suit

was dismissed, the Subordinate Judge being of the view that there was no proper service of the Defendant through the foreign Court and that the

judgment was also against natural justice. On appeal two learned Judges of this Court considered the service by the foreign Court on the

Defendant to be proper but referred for the decision of a Full Bench of three Judges the question. Does a suit lie in this country on a foreign

judgment given on default of appearance of the Defendant on the plaint allegations without any trial or evidence? The Full Bench answered the

question in the negative. Observed Courts Trotter C.J., thus:

It seems to me impossible to argue that that is not clearly within the decision and even the wording of the Privy Council in Keymer v. Visvanatham

Reddi ILR (1916) Mad. 112 (P.C.). It was argued-and very likely correctly argued-that the English law was different. The answer to that is we

are bound by the statute on which the decision of Keymer''s case was based. That statutory provision is Section 13(b) of the CPC under which an

exception to the conclusiveness of a foreign judgment in a British Indian Court is where it has not been given on the merits of the case.

The learned Judges declined to accept an argument that where the Defendant did not appear at all, notwithstanding, the service of summons on

him it was a clear intimation by him that he had admitted the validity of the Plaintiff''s claim and that this was just as good as if the Plaintiff had

actually proved it by evidence, and thought that the decision of the Privy Council impliedly excluded any such distinction. Krishnan J., agreeing with

the Chief Justice, expressed himself thus:

...For this case is clearly one where the decision was given without any evidence at all, but under the rules governing the Penang Court under

which, where the Defendant does not appear, a decree is given as a matter of course.

The position is precisely the same in the case before us because the Singapore High Court simply passed the decree as a matter of course

without any trial and without any evidence but only stating, the Defendant who had been served with summons did not appear; and the suit was

decreed. We agree with the trial Court, therefore, that the judgment of the Singapore High Court, though a foreign judgment as denned by the

Code, is not one on the merits of the case and cannot for that reason have conclusive force in the Courts of this country.

Mr. Ahmed Meeran for the Plaintiff-Appellant has argued, however, that in view of the circumstances showing that the Defendant submitted to

the jurisdiction of the Singapore High Court, the said submission would make the judgment one on merits of the case and that for this purpose the

submission might even be after passing of a decree. In support, learned Counsel has referred us to Narappa Naicken v. Govindaraja Naicken ILR

(1934) Mad. 824, Oomer Hajee Ayoob Sait Vs. Thirunavukkarasu Pandaram and Another, and R. Viswanathan Vs. Rukn-Ul-Mulk Syed Abdul

Wajid, . In our opinion, the contention has no substance and receives no support from the authorities relied on. The circumstances on which

learned Counsel based his argument are (i) the composition arrangement entered into between the Defendant and three of his creditors providing

for payment of the Plaintiff''s foreign decree at thirty-five per cent of its value in full satisfaction; (ii) the fact that the Defendant applied to the

Singapore High Court in the light of such composition for satisfaction of the foreign decree in question; (iii) the fact that after the dismissal of this

application, the Defendant instituted a suit, though unsuccessfully to enter up satisfaction of the decree, and (iv) the admission in the evidence on the

Defendant''s side that the suit claim was due. It is stated that these circumstances show that the Defendant, though he did not appear, submitted or

must be deemed to have submitted to the jurisdiction of the Singapore High Court and accepted the justness of the decree passed by that Court

and that such submission and acceptance though subsequently, will make the judgment, originally not on merits, as one on merits. We have no

hesitation in rejecting this argument. There is no question here of the Defendant submitting to the jurisdiction of the Singapore High Court. The

Defendant''s agents were still residing within its jurisdiction when it passed this decree after serving summonses on them. That Court had, therefore,

jurisdiction over the Defendant. It was not as if neither the Defendant nor his agents were within the jurisdiction of that Court; and no question was

ever raised, when the decree was passed, that it was without jurisdiction. If we understood learned Counsel for the Plaintiff-Appellant aright,

apparently what he tried to convey was that the conduct of the Defendant, as appearing from the circumstances relied on by Counsel, made it clear

that he accepted the judgment as a just and proper one and that it should, therefore, be regarded as one on merits. In our view, that does not

satisfy the requirement of Section 13(b), Code of Civil Procedure. It is one thing a judgment is given as a matter of course without a trial and

without evidence and without enquiring whether the claim is at all tenable and it is quite another that the judgment has been impliedly accepted by

the Defendant. The conclusiveness of a foreign judgment cannot be rested on the latter but depends on the former and on the question whether the

adjudication itself was given on the merits of the case, that is to say, after a consideration whether the plaint claim was well founded. Narappa

Naicken v. Govindaraja Naicken ILR (1934) Mad. 824 had nothing to do with Section 13(b), Code of Civil Procedure. The question there

before an executing Court in British India related to the validity of a decree obtained in a Court of Travancore having no jurisdiction over the

Defendant. He never appeared at the trial. But it was argued that his submission could be inferred from the fact that in the executing Court, he did

not repudiate the decree but took time to have the decree set aside as being ex parte in the Travancore Court. It was pointed out that to give

jurisdiction and, therefore, validity to the decree there must be submission before judgment was pronounced and that subsequent submission had

no more effect than supporting an inference that there was submission before. Oomer Hajee Ayoob Sait Vs. Thirunavukkarasu Pandaram and

Another, also arises out of proceedings in execution in British India of a decree passed by a Cochin Court. The question was whether the

Defendant there had submitted to the jurisdiction of that Court. There was an attachment before judgment ordered by the Cochin Court and when

the Plaintiff in that case brought it to the notice of the Defendant, the latter did not demur to it but wanted a concession by his letter. This Court was

of the view that submission to the jurisdiction of the Cochin Court could be inferred from that letter. No doubt the learned Judges said that the

Defendant there must be deemed to have remained ex parte because the claim was a just one. But this had no reference to a question whether the

judgment there was one on the merits of the case. Both these cases related to submission to jurisdiction but were not concerned with Section 13(b)

of the Code of Civil Procedure. The Supreme Court judgment cited was also not concerned with a judgment being on merits. We, therefore, reject

the contention of Mr. Ahmed Meeran that the Defendant''s submission to the jurisdiction of the Singapore High Court made the judgment in

question as one on the merits of the case.

That takes us now to the question of limitation. We may first dispose of an argument based on Article 117 of the Limitation Act. That article

provides for a period of six years for a suit upon a foreign judgment as defined in the CPC from the date of that judgment. We agree with Mr.

Ahmed Meeran that for purposes of this article the foreign judgment need not be one on merits of the case if it satisfies the definition of the term in

Section 2(6), Code of Civil Procedure. Vide Baijnath Karnani Vs. Vallabhadas Damani, and Baijnath v. Vallabhadas AIR 1933 Mad. 511. But

the article is of no assistance to the Plaintiff because, as we have held, the suit itself is not based on a foreign judgment within the meaning of

Section 13(b).

Mr. Ahmed Meeran contends that even on the basis of Article 52 of the Limitation Act, the suit in respect of the disallowed claim too will be in

time on the ground that the Defendant is an agriculturist and the Plaintiff is entitled to rely on his acknowledgment of liability and the benefit of the

provisions of the Madras Agriculturists Relief Act, 1938, as amended in 1953, 1954 and 1955. In the plaint the acknowledgments relied on are of

September and December 1954. The Plaintiff pleaded that the Defendant''s son Pakkiri Mohammed, the power of attorney agent of the Defendant

agreed and consented to the payment of the debt from the surplus amount available under the composition arrangement and that in the last week of

December 1954, the Defendant himself wrote to the managing director of the Plaintiff''s firm agreeing to settle and satisfy the debt at an early date.

The Defendant''s communication of December 1954, was not marked in evidence as it was said to be lost. The trial Court did not express its

definite opinion in regard to this communication and we are in no better position in the absence of the communication sent or an authenticated copy

thereof. The Plaintiff, however, relied upon exhibit A-55, dated September 9, 1954, a letter written by the Defendant to the Plaintiff and exhibit, B-

3, dated October 29, 1953, which was a circular issued to all creditors of the Defendant by A.P.N. Abdul Jabbar and Company represented by

its managers. The circular was also signed by certain guarantors. The trial Court held that there was no plea in the plaint based on these two

documents and that exhibit A-55 amounted to a conditional acknowledgment. We think the trial Court was right in taking that view. Mr. Ahmed

Meeran conceded that the Plaintiff did not plead in his plaint any acknowledgment based on exhibits A-55 and B-3. We are of the view that the

Plaintiff cannot be allowed to plead, at a later stage, an exemption from the bar of limitation, on a ground not mentioned in the plaint, unless, of

course, he is permitted to amend it. Cornish J. held in Palani Chetty Vs. A.R.S.V. Sevugan Chetty, that Order VII Rule 6 CPC made no exception

to the general rule that a Plaintiff must plead the facts on which he relied for his case and that if he had failed to state in his pleadings the ground on

which he claimed he was entitled to exemption from limitation, he could not be allowed to prove it at the trial. Walsh J. was of the same view in

(Baghvatham) Mahadeva Sastrigal Vs. Kariyakara Marulai Reddiar and Others, . In Ramaswami Chetti Vs. Anaiya Padayachi and Others,

Venkataramana Rao J. held:

It is obligatory as a matter of pleading to show the ground upon which exemption from limitation is claimed. Consequently unless the plaint is

amended, it will not be open to a party to rely on an exemption not pleaded in the plaint.

With respect we accept this view of the law as correct.

Mr. Ahmed Meeran, however, sought permission to suitably amend the plaint so as to enable him to plead acknowledgments based on

Exhibits A-55 and B-3. Even if we granted it, as we already indicated, we are not satisfied that they contain any clear acknowledgment of the

debt. Exhibit A-55 was written by the Defendant from Koothanallur to the Plaintiff in the context of the composition arrangement by which

according to the Defendant it was agreed between him and his creditors that by payment of thirty-five percent of the debts out of the surplus of the

proceeds of the Defendant''s properties at Singapore and Kualalumpur, they should be taken as fully satisfied. In that letter he wanted the Plaintiff

to write to his firm A.P.N. Abdul Jabbar and Company enclosing a draft sale deed on certain terms authorizing the guarantors to sell his properties

subject to the subsisting mortgage in order to discharge the entire debts contracted at Singapore and Kualalumpur inclusive of those due to the

guarantors of whom the Plaintiff was one. Exhibit B-3, as we mentioned, was a circular to all the creditors issued by the manager of A.P.N. Abdul

Jabbar and counter-signed by the guarantors which referred to the creditors having accepted a composition of thirty-five percent of the debt in full

discharge and contained certain terms on which the guarantors would undertake to pay the composition in instalments to creditors. To the circular

was attached a statement of the debts due from the Defendant and the first item in this statement showed a balance of 41,242 dollars and 42 cents

in favour of the Plaintiff and that thirty-five per cent thereof payable to him amounted to 14,434 dollars and 85 cents. The circular wanted each of

the creditors including the Plaintiff to sign it in token of his acceptance of the composition. It may be seen, therefore, that while the Plaintiff now

claims the entire balance, these two documents proceed on the basis that the Plaintiff had agreed to receive thirty-five per cent thereof in full

satisfaction. In other words, the Defendant cannot be taken to have admitted or acknowledged by these documents that he was liable to pay the

entire balance due to the Plaintiff. In fact, the Defendant would have it that by the agreement he would only be liable to pay thirty-five percent of

the debt. This depended on whether there was a valid and completed agreement relating to the alleged composition. The trial Court has found that,

as a matter of fact, the attempted composition did not fructify because some of the creditors had not accepted it. Though this finding is canvassed

by the Defendant, we have come to the conclusion that it is correct. In the circumstances, we are unable to hold that there is anything in Exhibit A-

55 and Exhibit B-3 constituting acknowledgments of the debt due to the Plaintiff. We are also of opinion that, in any case, the acknowledgments, if

at all, contained in them, are not unconditional.

On that view even giving the Plaintiff the benefit under Ordinance No. V of 1953, Madras Act V of 1954 and Madras Act I of 1955 of

exclusion of a total period of one year, six months and twenty-six days in computing the period of three years under Article 52 of the Limitation

Act, the Plaintiff cannot succeed in his appeal. In fact, Mr. R. Gopalaswami Ayyangar for the Defendant who is the Appellant in the other appeal

argued that the Plaintiff was not entitled to this exclusion on the ground that the suit had been instituted after Madras Act I of 1955. But he failed to

satisfy us on the point. It should be noted that the four items of sales in respect of which the trial Court has granted a decree to the Plaintiff like the

other items of sales, were earlier to December 5, 1953 when Ordinance V of 1953, came into force.

Mr. Ahmed Meeran has next urged that in view of Section 4(1) of Madras Act I of 1955, the entire suit claim would be within time. He says

that on account of this provision, the integrality of the debt has been broken and in effect split up into four debts, each constituting a cause of action

by itself and giving rise to a fresh start of limitation. If this is the effect of Madras Act I of 1955, the entirety of the suit claim would undoubtedly be

within time. In support of his contention, Counsel relied on certain decisions of this Court which require consideration. The Madras Agriculturists

Relief Act, 1938, was enacted to provide for the relief of indebted agriculturists in the then province of Madras. Madras Ordinance No. V of

1953, Madras Act V of 1954 and Madras Act I of 1955, extended to the agriculturists certain further relief of which the main was the bar of suits

for recovery of debts until the expiry of a stated period. The total period under the Ordinance and the Acts during which the bar operated came to

one year six months twenty-six days which fell between December 5, 1953 and July 1, 1955. Each of these enactments directed exclusion, from

the period of limitation for a suit for recovery of debt, of the time during which its institution was barred. Section 4(1) of Madras Act I of 1955,

provided for repayment by an agriculturist of his debt in four instalments, the first within four months of the commencement of the Act, namely,

March 1, 1955 and each of the rest on July 1 of each of the succeeding years with interest due on such instalments up to that date. This provision

is to operate notwithstanding any law, custom, contract, or decree of Court to the contrary. Two other Sub-sections in Section 4 deal with suits

filed after or at the commencement of the Act and direct that the Court shall, in decreeing a suit, provide for immediate payment of such instalments

as would have become payable under Sub-section (1) and the balance in further instalments as specified therein. Construing Sub-section (1) of

Section 4 this Court in some of the decided cases took the view that its effect was to split a debt into different causes of action each of which with

a fresh start of limitation. The first of these cases appears to be Gopal Udayar v. Mangala Udayar (1961) 74 L.W. 601 which arose out of a suit

on a promissory note executed on August 3, 1950 and which bore two endorsements of payment, dated November 16, 1952 and July 1, 1955.

The suit was instituted on January 22, 1959 which was dismissed by the trial Court as barred by time. On a revision from the small cause suit

Srinivasan J., held that the suit was within time in respect of the last three instalments payable u/s 4(1). This was on the view that the provision for

payment in instalments would itself give rise to a separate cause of action in respect of each installment. The learned Judge also proceeded on the

basis that he could find no prohibition in the Act against the filing of a suit in respect of each installment. One of us sitting alone in Samanna v.

Thiruvengada ILR (1964) Mad. 535 applied that interpretation. Ramachandra Ayyar C.J., and Anantanarayanan J., in Bichal v. Muthuramalingam

ILR (1962) Mad. 1144, 1148 expressed their view of Section 4(1) in these terms:

But where a special enactment, which is invested with an overriding power with regard to any other law, creates this effect of a liability to pay the

debt only in instalments, it is a reasonable interpretation to hold that each installment will furnish a distinct cause of action. At least for the purpose

of limitation, and the right to sue, the integrality of the debt must thus be held severed into distinct parts.

On that view, they held that the suit was in time in respect of the last three instalments. Ganapatia Pillai J., in Ganapathia Pillai Vs. Ekambara

Mooppan and Another, held that the effect of Section 4(1) of Madras Act I of 1955, was not to attract Article 74 of the Limitation Act. The

learned Judge observed:

The fact that the debt due by an agriculturist has been made payable by instalments by the Legislature would not convert the promissory note or

bond into one payable by instalments within the meaning of Article 74, which deals with the classification of the instruments under which money is

payable and has no relevance to subsequent legislative enactments which make a debt payable in instalments which is otherwise payable in lump-

sum.

The promissory notes on the basis of which the suits were filed on June 4, 1957 in that case were dated July 8, 1952 and August 9, 1952 and

the trial Court dismissed the suits as barred by limitation and as not being within the extended period of one year six months and twenty-six days.

Ganapatia Pillai J., accepted that conclusion. It maybe seen that if the interpretation of Section 4(1) in the case we referred to were applied the

suits at least in respect of the last three instalments under that section should have been held as in time. But Ganapathia Pillai Vs. Ekambara

Mooppan and Another, was distinguished by Gopal Udayar v. Mangala Udayar (1961) 74 L.W. 601 on the ground that the particular aspect of

the interpretation of Section 4(1) as splitting up the integrality of the debt was not before Ganapatia Pillai J. Ramachandra Ayyar C.J. and

Anantanarayanan J. in the case we mentioned did not also consider that Ganapathia Pillai Vs. Ekambara Mooppan and Another, was an authority

for the view that a special enactment could not have the effect of splitting up the debt covered by promissory note into several components by

directing the debt as repayable by instalments.

With great respect it seems to us that the effect of Section 4(1) has to be construed in the light of the bearing which the rest of the provisions,

especially Section 9, in the Act will have on it. Section 2 defines a debt as any liability in cash or kind, whether secured or unsecured, due from an

agriculturist, whether payable under a contract or decree or order of a Court. We have already mentioned what Section 4(1) has provided for.

Section 3(2) says that if a creditor sues for recovery of a debt during the period specified and when an agriculturist is entitled to pay his instalments

u/s 4(1), the Plaintiff should not only bear his own costs but should also pay the costs of the Defendant who is an agriculturist. We are unable to

see anything in this provision to suggest that the creditor could file a separate suit for recovery of each of the instalments. On the other hand, Sub-

section (3) of Section 4 dealing with a suit after the commencement of the Act visualizes a suit for the recovery of the entire debt, though, of

course, the Court in decreeing the suit should provide for immediate payment of such instalments, as would have become due under Sub-section

(1) of Section 4 and the balance in further instalments as specified therein. More or less to a similar effect is Sub-section (4) of Section 4 which

also contemplates recovery of a debt by a suit pending at the commencement of the Act. Section 5(1), which is supplemental to Section 4(1),

provides that an agriculturist may deposit any of the instalments into Court having jurisdiction and the following Sub-section, for recording part

satisfaction of the debt. Section 8 enacts for exclusion, for the purpose of limitation, of time during which the bar to a suit operated. Then comes

Section 9 which is important for our present purpose. It speaks of the effect of the payment u/s 4 or Section 5. It says:

Where a debt is payable by an agriculturist either by himself or jointly or jointly and severally with a non-agriculturist and where the agriculturist

makes payment or deposits amount towards that debt as provided for in Section 4 or Section 5, a fresh period of limitation shall be computed

from the time when the payment or deposit was made both against the agriculturist and non-agriculturist.

The section deals not merely with a debt owed by an agriculturist by himself but also a debt due from him jointly or jointly and severally with a

non-agriculturist. But what is of the essence is that under this section for computation of a fresh period of limitation, payment u/s 4 or Section 5 is a

condition. This is in entire accord with Section 19 of the Limitation Act. It cannot be said that the purpose of Section 9 is merely to provide for the

case of a debt jointly and severally due from both an agriculturist and a non-agriculturist. In our view, it is also implied by Section 9 that by reason

of Section 4(1) itself no change in limitation is intended. It would be contrary to Section 9 if Section 4(1) is read in such a manner that the debt

itself is split up into several parts, each of which giving rise to a separate cause of action with an independent and fresh start of limitation. If that

were the intention of Section 4(1) at least in respect of limitation, Section 9 would to that extent be wholly mis-placed and unnecessary. So far as

the situation u/s 4(1) creating a right in favour of an agriculturist to pay a debt by instalments as provided for therein is concerned, it has nothing to

do with limitation which is entirely governed by Section 9 in the context of payment u/s 4 or Section 5. Where a debt is covered by a decree to

which Section 4(1) applies, the provisions of that Sub-section, as under Sub-section (7), should be deemed to be a subsequent order of Court for

purposes of Section 48(1)(b) of the Code of Civil Procedure. The effect of Madras Act I of 1955, therefore, comes to this. A suit for the recovery

of a debt due from an agriculturist shall not be instituted before the expiry of four months from the commencement of Act, namely, March 1, 1955.

The bar to a suit for recovery of the entire debt ends there. But even if a suit were filed during the period the bar is in force, the only consequence

would be that the Plaintiff will be deprived of his costs and further he will be liable to pay the costs of the agriculturist-Defendant. That would also

be the consequence, if the suit has been filed after an agriculturist has paid or deposited into Court the instalments specified by Section 4(1) or

during the period when the agriculturist is entitled to pay his instalments under that provision. Section 4(1) does not provide for and have the effect

of splitting a debt into several debts. It leaves the contract of debt unaffected except for the direction that the repayment of the debt shall be by

four instalments as provided therein. The provision for repayment in that manner does not necessarily mean that the debt ceases to be single and

entire. Just like a decree providing for instalment payments, so a debt repayable in specified instalments still retains its character as a single debt.

Merely becasue the debt is repayable in instalments u/s 4(1), it does not follow that a separate suit will lie for recovery of each of the instalments.

Execution is a different matter which has been specifically provided for. As a matter of fact, Sub-sections (3) to (6) would suggest that when a suit

is brought, it has to be for the entire debt and it is on that basis, the Court is directed to pass a decree for immediate payment of instalments

already become due and payment of the balance by instalments as provided by Section 4(1). Where a debt was incurred prior to the Act, the

creditor for the purpose of limitation would be entitled to exclude the time during which the bar to a suit operated. This is on the same lines as in

Ordnance V of 1953 and Madras Act V of 1954. If an agriculturist pays each of the instalments within the time specified u/s 4(1), the creditor

would be entitled u/s 9 to a fresh period of limitation from the date of payment of each of such instalments. If there is no such, payment by the

agriculturist, the creditor apart from the exclusion the time for limitation has to bring the suit within the period of limitation provided under the

Limitation Act. The provisions of Madras Act I of 1955, construed in that way which, as we think, is the only reasonable and possible

construction, do not in any way provide for limitation different from that provided under the Limitation Act. As we said, Section 9 of the former

Act is in consonance with Section 19 of the Limitation Act. A division Bench of this Court in Subbaraya Gounder v. Easwaramoorthy Gounder

(1962) 75 L.W. 727 held at page 730:

The true effect, in our opinion, of Act V of 1954 and Act I of 1955 is merely to exclude from the computation of the period prescribed for a suit

under the Limitation Act a certain period as indicated in them.... They did not purport to prescribe a special period of limitation for such suits

different from the period prescribed under the Indian Limitation Act.

Though these observations were made in the context of the question whether an endorsement made after the expiry of the three years period

but within the extended period covered by the three enactments would save limitation, we find ourselves in entire agreement with the view that it is

not in the contemplation of Madras Act I of 1955, to provide a period of limitation different from that contained in the Limitation Act or in any way

modify the application of the Limitation Act to suits for recovery of a debt. As we said, Section 9 of Madras Act I of 1955, is but a reiteration of

the effect of Section 19 of the Limitation Act.

Even assuming that Section 4(1) as construed by Gopal Udayar v. Mangala Udayar (1961) 74 L.W. 601 and Bichal v. Muthuramalingam ILR

(1962) Mad. 1144 splits up the integrality of a debt by providing for instalmental payment thereof within the specified time, the provision for

instalmental payment does not, especially in view of Section 9, involve the implication of giving a fresh start of limitation for each of the instalments

regarding the same as a separate cause of action. If, however, each instalment is taken as constituting a separate cause of action, so far as limitation

is concerned, the creditor, will, in our view, be entitled to a fresh start of limitation only in terms of Section 9. But this section and its effect m the

context of Section 4(1) do not appear to have been brought to the notice of the Court in Gopal Udayar v. Mangala Udayar (1961) 74 L.W. 601

and Bichal v. Muthuramalingam ILR (1962) Mad. 1144 and in view of this, with respect we have not considered it necessary to make a reference

of the question to a Full Bench.

On our view of the scope of Section 4(1) and Section 9, it follows that the Court below is right in its finding on the question of limitation. That

means the Plaintiff''s appeal should fail.

In the other appeal by the Defendant, the only point urged on his behalf by Mr. Gopalswami Ayyangar is as regards the composition of the

debt at thirty five cents in a dollar and the alleged satisfaction of the debt by payment at that rate. The finding of the Court below is, as we said, that

the composition arrangement put forward by the Defendant did not fructify. We must observe that learned Counsel for the Defendant-Appellant,

beyond stating the point has not invited our attention to the evidence relating to it and seriously canvassed the finding. We are, however, satisfied

that the trial Court has given cogent reasons for its finding. One of the terms of the attempted com position arrangement was that the Defendant''s

properties in Singapore and Kuala Lumpur should be made over by him to the guarantors so that they could, m their turn, sell them and from the

proceeds pay each of the creditors thirty-five cents in a dollar in full satisfaction after discharging the outstanding mortgages. But it is not the

Defendant''s case now that this term was complied with. As a matter of fact, it appears that the properties were brought to sale by the mortgagees

who, after paying themselves remitted the balance of the proceeds to the solicitors of the Defendant and that the non-hypothecated properties

were sold through Court. That apart, at least two out of the forty eight creditors of the Defendant did not agree and sign the composition

arrangement in token of their acceptance. As a matter of fact, the Defendant himself applied to the High Court of Singapore for entering up

satisfaction of the Plaintiff''s decree on the basis of the composition arrangement but his application was dismissed. Subsequently the Defendant

instituted a suit for the same purpose but again with the same result. There is, therefore, no reason to interfere with the finding of the trial Court in

this regard. We may add that though at the trial, the Defendant would appear to have contested that he was an agriculturist, the finding of the trial

Court against him on that point has not been attacked before us.

The appeals are dismissed with costs.