ambati Ramayya and Another vs Subbayya and Others

Umamaheswaram, J.—This appeal raises a difficult ques-of law. The Plaintiffs are the Appellants.

filed a suit for recovery of Rs. 993/12/-{oot of a mortgage executed by R. Tippanna, father of Defendant 1 and the husband of dent 2 in favour of the Plaintiff''s father on 1925. Defendant 3 was impleaded as the pur of the mortgaged properties.

The Plaintiffs scaled down the amount under provisions of Madras Act 4 of 1938 and clairn-t Tippanna was liable to pay a sum of Rs.

1956 Andkra D.F/12 GO being the cash borrowed under the promis-fy notes preceding the mortgage. He also claim-'' interest thereon at He. 0-0-1 per He. 1/- per mefcem from 1-10-1937. Defendants 4 and 2 contended that they were not liable as the personal liability under the mortgage document was barred by limitation, and as the mortgaged properties had been purchased by Defendant 3. Defendant 3 pleaded that if the mortgage debt was properly scaled down no amount would be clue by him.

The District Munsif of Anantapur upheld the contention of Defendants 1 and 2 that they were not liable to pay any amount. He followed the decision in - ''Nachiyappa Chettiar v. Marappa Goundan'', 1942 Mad 412 (AIR v. 29) (A) and held that Defendant 3 was liable to pay the principal amount due under the mortgage bond and was not entitled to trace back the debt to the amount borrowed under the promissory notes. As the Plaintiffs had claimed only a sum of Rs. 600/- ami not the full principal .amount due under the mortgage bond, he restricted the decree to tire sum prayed for.

On appeal, the Subordinate Judge ot Anantapur held that Defendant 3 was entitled to trace the debt to the amounts lent under the original promissory notes that as the Plaintiffs had-not produced their account books and had failed? to prove what amounts were originally lent "the presumption that double the amount of the original debt has been paid by the mortgagor to the mortgagee has to be drawn against the Plaintiffs." In the result he dismissed the suit. The Plaintiffs have consequently filed the second appeal.

The learned Advocate for the Appellants Sri M.S. Ramachandra Rao contended that the decision in AIR 1942 Mad 412 (AIR -V 29) (A) directly governs this case. I have carefully perused the decision and I am of the opinion that it requires reconsideration by a Full Bench of this Court. Periunna Goundan v. Sellappa Goundan AIR 1933 Mad 186 (187) (AIR v. 26) (B) it was held that the purchaser of the mortgaged properties was entitled to claim relief under Madras Act 4 of 1938.

The contention that the liability of the purchaser of the hypotheca was not a ''debt'' withiw the meaning of S. 3(3) of the Act was negatived on the ground that it was not necessary that the Petitioner should be personally liable. Dealing with this contention the learned Judges observed as follows:

We are unable to read the definition in this limited sense. There are no words in the definition clause justifying any such restriction. The clause speaks of ''any liability'' and word ''due'' does not necessarily imply that it must be recoverable by the imprisonment of the debtor....It coul not therefore have been the intention of the Legislature to limit the relief under the Act to cases where a person was personally liable. Its avowed-" pnrpo.se was to enable agriculturists to retain heir property and prevent such property passing creditors or execution pur-of into the hands chasers.

They further held that the reference to liability in el. 3 was wide enough to cover every porsow "who is in any manner liable either because he is personally liable or because he is liable on account of the possession of the property.

At page 187 they pointed out that the liability'' was traceable to, the original mortgage and that his purchase was not/ the basis of any new liability.

Ths decision was approved by the Supreme Court in - Cheruvu Nageswaraswami Vs. Rajah Vadrevu Viswasundara Rao and Others, Mukherlf-o J. held that Defendant 6 who purchased'' the equity-of redemption on 20-1-1939 would be entitled to.

Under Section 7 of the Act if the mortgagors were agriculturists entitled to relief at the time of the passing of the Act. The observations at page 372 are very apt and are as follows:

It is not necessary that the applicant for relief himself should be liable for the debt on the date the Act came into force. The right to claim relief as is well settled by decisions (vide Perianna Goundan Vs. Sellappa Goundan and Others, of the Madras High Court is not confined to the person who originally contracted the debt but is available to his legal representatives and assigns as well; nor is it necessary that the applicant should be personally liable for the debt.

The liability of a purchaser of the equity of redemption to pay the mortgage debt undoubtedly arises on flhe date of his purchase; but the debt itself which has its origin in the mortgage bond did exist from before his purchase, and if it was payable by an agriculturist at the relevant date the purchaser could certainly claim the privilege:.; of the Act if he himself was an agriculturist at the date of his application. The material question, therefore, is whether the mortgage debt was payable by an agriculturist on 22-3-1933.

Adopting the above observations the only question that has tto be determined is as to what amount the mortgagors are liable to pay under the mortgage debt. If the mortgagors are entitled to trace back their debt to the original amount borrowed under the promissory notes the purchaser would be equally entitled to do so.

In - Venkatammal Vs. K.V. Ramaswami Aiyar and Others, it was held by Wads-worth and Patanjali Sastri JJ., that when both the mortgagor and the purchaser are agriculturists the purchaser can claim to have the debt scaled down on the basis that the mortgage debt for which he became liable was itself a renewal of an earlier debt in favour of the same creditor. At page 63,.they observed as follows:

There is no difficulty on the present lael''s in holding that the whole of the liability under the compromise was nothing else than a renewal of tlie previous mortgage liability. Provided (hat this debt was the debt of an agriculturist the liability is one which must be deemed to be a liability of the purchaser which lie being an agriculturist can seek to scale down as against the mortgagee (vide AIR 1939 Mad 180 (AIR v. 2(0 OJ) ).

There has been some discussion before us of the question whether the fact that the purchaser is under a liability which can be traced back to the liability under the mortgage makes available to the purchaser the plea which would be open to the original mortgagors that the mortgage debt is itself a renewal of an earlier debt. The question is not free from difficulty and we have been referred to no previous decision directly covering this question.

But the judgment of Varadachariar J., in Perianna Goundan Vs. Sellappa Goundan and Others, assumes that an heir-at-law is under the same liability as the person to whom he inherits and is entitled to the same remedy under the Act and the learned Judge treats the purchaser of the mortgaged property as under the same liability as his vendor.

It would appear to follow that if the debt for which the purchaser is liable is essentially the same debt as the debt of the original mortgagor and the latter debt is a renewal of an earlier debt in favour of the same creditor the purchaser will be entitled to claim that the liability which he has Incurred is a renewal and that the principal must be the principal originally advanced together with the amounts subsequently advanced as principal.

If the reasoning in this case is adopttU should be held that the purchaser of the ltypftts in tihis Seconc theca, Defendant 3, would We entitled to the relief as the mortgagors would be entitled to, in other words he can trace back the debt to amounts lent under the promissory notes tnough he is not personally liable and the ami is recoverable only from the mortgaged pn ties.

But in AIR 1942 Mad 412 (AIR v. 29) (A) same learned Judges however held that the I lity cannot be.scaled down with reference to antecedent promissory notes. At page 412 stated that the liability of the purchaser was a property, liability and that the debt shoul fixed with reference to the date of the mors,; bond and not with reference to the anu.ee promissory notes.

With great respect to the learned Judj"i find it difficult to follow (their reasoning. T: can be no doubt that the mortgagor would titled to trace back the mortgage debt to the a cement promissory notes even though he mi, have created a mortgage securing only some his properties for the mortgage debt, Similarly the legal representatives of mortgagor who are not personally liable are titled to trace back the mortgage debt to the a cement promissory note debts. Is a different j ciple to be applied in the case of assigns from mortgagor? If as pointed out by the Su Court the purchaser is entitled to claim the relief as the mortgagor, it follows that the Ha! should not be fixed or determined as on the of the mortgage but should be traced back U dates of the promissory notes.

On strict legal principle I am unable to why the purchaser is entitled to trace bacJc mortgage debt only to an antecedent mort; executed by the same mortgagor but not to , antecedent promissory notes. As already s''ji'' the decision in AIR 1939 Mad 186 (AIR v. 21!)'' Supreme Court decision in 3 KC (Alii v. 40) (C) support the view I but the pc chaser is entitled to claim the same relief (l, sfcj mortgagor, the is, claim to have (he in debt scaled down with reference to (lit. m. promissory notes.

The decision in 1942 Mad 412 (AM v. (A), was no doubt followed by the. Judges ia ...... ''Viswasunclara Rao v. Kan ayya AIR 1946 Mad 434 (AIR v. 33) (E> vh:. h r up to the Supreme Court and is repotted ;? AIR SC 370 (AIR v. 40) (C). The point involwd ia " case was however not dealt with by tin .''j-j;?;. Court in the view taken by them that the van gagors were not proved to be agriculturists i" relevant date.

Having regard to the important qwnfc of law involved in this case and bavin? regant'' my view that the decision in 1942 Mad 412 C v. 29) (A) requires reconsideration the second i peal may be directed to be posted before a ;

In pursuance of the above order the, Appeal having been posted before the K"Sl Mr. K. Subba Rao C. J. and Hon''ble Bhii" karam J. and coming on for hearing on Ma the 25th and Tuesday the 26th days of July upon perusing the grounds of appenl the ; ments and decrees of the lower uppclki''.. and the Court of the first instance and material papers in the suit and uonn hc"ri'' arguments of Mr. M. Krishna Rao i.r. i XJ Balayya, advocates for the Appellant and of K. Kotayya advocate for Respondent 1 &td other Respondents not appearing in person advocate, the Court made the following:

ORDER: The plain tills arc the appel this Second Appeal. They liled a suit on (foot of a mortgage executed by the lather of jndant 1 and the husband of Defendant 2 in lir of their own father. Defendant 3 is a sub-jent purchaser of the properties mortgaged. | suit was dismissed against Defendants 1 and Ithe ground that they are not personally liable [that they have no present interest in the pro-,Lie Qtiestiou that arise;; for consideration in ''Second Appeal is as regards the rigl.it of de-it 3 to have the mortgage scaled down. The Appellate Court acted upon the view that idant 3 was entitled to have the mortgage scaled down on the basis that ii, itself is the al of an earlier debt that is, that he can to have the debt traced back to the amounts toally lent under the promissory notes that touted the consideration for the mortgage. In AIR 1941 Mad 62 (AIR v. 28) (D) Wadsworth Patanjali Sastri JJ. expressed the view that chaser in the position of Defendant 3 would ititled to ask the Court that the debt be i back to its earliest origin without refer-to the fact that the mortgage itself was. creat-bsequently.

But in a later case in AIR 1342 Mad 412 ( v. 1A) they expressed a view that as the liability purchaser was only ''property liability'' arising the fact that he purchased the mortgaged rty, he could not go beyond the date of the ;age bond and claim the scaling'' down of the:edent liability for which the bond was exo-Our learned brother, Umarnaheswaram J. ted that the matter may be posted before a on account of the above conflict. We think desirable that the conflict should be resolved Pull Bench to which v/c refer he following:

''Can a purchaser of a mortgaged property "to have the mortgage debt; scaled down uii-;he Madras Agriculturists'' Relief Act on the sthat such debt is itself a renewal of an ear-debt secured or unsecured." (In pursuance of the above order, the Second I havins-been posted before Hon''ble Mr. K. Rao C. ''A, Hon''ble Mr. Justice Viswanatha and the Hon''ble Mr. Justice Satyanarayana and coming on for hearing on Monday, the day of August, 1955, upon hearing the argu-of Mr. M.S. Ramaohandra Rao and Mr. Advocates for the Appellant, and of Mr. totayya, Advocate for Respondent 1, and the Respondents not appearing in person or by ,te and having stood over for consideration ''ednesday, the 7th day of September, 1955, iurt gave the following:), OPINION. RAO, C. J.:

The following question has been re fertile Full Bench by a Division Bench of lirt: a purchaser of a mortgaged property have the mortgage debt scaled down un-I''Madras Agriculturists'' Relief. Act on the at such debt is itself a renewal of an ear-i secured or unsecured?" The facts relevant to consider the ques-jiy briefly be stated. Defendant 1 and the of Defendant 2 executed a mortgage deed 1,18-4-1925 in favour of the Plaintiffs'' father pm\\ of the earlier promissory notes execut-bem in his favour. The Plaintiffs, filed O. S. pf. 1948 in the Court of the District Munsif, Ipur, to recover a sum of Rs. 993-12-0, the tdue under the mortgage. To that suit they impleaded Defendant 3, who was a subsequent purchaser of the mortgaged properties. All tin; three Defendants are agriculturists as defined in Act 4 of 1938. t The suit against Defendants 1 turd 2 was dismissed on the ground that their personal liability was barred by limitation and that they, having sold away the hypotheca, had no present interest in the property. But, so far as Defendant 3 was concerned, the District Munsif held, following f''ao decision in AIR 1942 Mad 412 (AIR v. 29) (A) that Defendant''3 was mit entitled to trace back the debt to the amount borrowed under the promissory notes whereas the Subordinate Judge of Ananta-pur, on appeal, held that he was entitled to trace back the deot to the amount lent undqr- the original promissory note. Holding that the debtor paid the mortgagee double the amount of the original debt, he dismissed the suit. The question formulated and placed before the Full Bench arises out of those facts.

The, learned Counsel for the Appellants contends that Defendant 3 has only ''property liability'' to discharge the mortgage debt and, therefore, his liability can be traced back only to a point of time when that liability was attached to the property i.e. to the point of time when, in renewal of the earlier promissory notes, the mortgage deed was executed.

At the outset, it is convenient to consider the scope of the relevant provisions of the Madras Agriculturists'' Relief Aci) (hereafter'' referred to as the Act) uninfluenced by the decisions on the subject.

Section 3 (ii):

''Agriculturist'' means a person ''who lias a saleable interest in any agricultural or norueuitiual land in the Province of Madias.... Section 3 (Hi) "Debt" means any liability in cash or kind whether secured or unsecured due from an agriculturist, whether payable under a decree or order oi a civil or revenue Court or otherwise. Section 7:

Notwithstanding any law, custom, contract or decree of court to the contrary, all debts payable by an agriculturist at the commencement of this Act shall bo scaled down in accordance with the provisions of this chapter.

No sum in excess of the amount as so seated down shall be recoverable Irom him or from any land or interest in land belonging to him; nor shall his property be liable to be attached and sold or proceeded against in any manner in the execution of any decree against him in so far as such decree is for an amount in excess of the sum as scaled down under this chapter. Section 8:

Debts incurred before 1-10-1932, shall be scaled down in the manner mentioned hereunder, namely:

(i) All interest outstanding on 1-10-1937 in favour of any creditor of an agriculturist whether the same be payable under law, custom or contract or under a decree of Court and whether the debt or other obligation has ripened into a decree or not, shall be deemed to be discharged, and only the principal or such portion thereof as may be outstanding shall be deemed to be the amount repayable by the agriculturist on that date.

Explanation III Where a debt has been renewed or included in a fresh document executed before or after the commencement of this Act, whether by the same or a different debtor and whether in favour of the same or a different creditor, the principal originally advanced together with such sums, if any, fc- have been subsequently advanced as principal shall alone be treated as the principal sum repayable under this section."

The aforesaid provisions may be sum-ana''ried thus. Every person, who has a saleable .-interest in agricultural land and who is not dis-.aualified under the provisos to S. 3(ii) is entitled to have his liability, whether secured or unsecured, scaled down under the provisions of the Act. Therefore, at the time when the debt is sought ''to be scaled down,- the person seeking the relief must be an agriculturist owing a debt within the meaning of the Act.

tinder Section 7, that debt must have been payable by an agriculturist at the commencement of the Act i.e. 22-3-1938. It is immaterial whether the debtor on that date is the person now claiming the relief or a different person. But what is important is that the. debt now sought; to be scaled down should have been payable by an agrieuliii" -''"ist-debtor at the commencement of the Act. So, under the'' provisions of S. 8, that debt, can be traced back to its inception, whether it originated in a secured or unsecured debt. If the personal liability of the mortgagor was not barred, or, if he did not alienate the hypotheca, ho would certainly be entitled to have his mortgage iJebt scaled down under the provisions of the Act. But, woKJQ it make any difference if the person claiming the- relief is a purchaser of the equity of redemption in the properties mortgaged?

The answer would depend upon the nature of the liability of the purchaser of the eqtiity of redemption. Is it the same debt payable by the'' mortgagor or has it changed its character in the hands of the purchaser? If it retains the same character, I.e. the liability of the purchaser is the "ame debt payable by the mortgagor at the commencement of the Act. he would be entitled to the same relief which the mortgagor has. This leads me to consider the. question of the nature of the liability of the transferee vis-a-vis the mortgagee.

u/s 3(ii) ''debt'' means any liability in cash or kind, whether secured or unsecured, due from an agriculturist. This definition, therefore, takes in not only simple debts but also secured debts due from an agriculturist. A mortgage is a secured debt.

Under Section 58, Transfer of Property Act, it is the transfer of an interest in specific Immovable property for the purpose of securing the payment of money. It confers unon the creditor some right; in Tem unlike a simple money debt; which confers on him a jus in personam, a right enforceable against a determinate person. It has three ele-mentis; a debt, a security for the payment of the debt and a person representing the property liable to pay the debt out of that property. The personal liability of the debtor is not a necessary condition or ingredient) of a mortgage.

There are different categories of mortgages - simple mortgage, English mortgage, mortgage by conditional sale, usufructuary mortgage and anomalous mortgage. A personal covenant is no doubt, implicit in a simple mortgage. It is also Sound in an English mortgage. But it is not found in a mortgage by conditional sale or usufructuary mortgage. It cannot be inferred from an anomalous mortgage unless it is expressly provided lor. Therefore, except in a case where a personal covenant is implied or expressed, the liability of the mortgagor is confined only to the property transferred as security for the debt.

The residue of the interest left in the mortgagor after he has mortgaged the property is called the equity of redemption which is a "transfer-

able and heritable property. If he transfers it to i third party, the latter takes the property subje to the mortgage liability. * Whether the property is in the hands of the mortgagor, or, in the han&f of the transferee, the debt is always liable to paid out of the property though in the case of J mortgage with a personal covenant, the mortg is also personally liable.

This liability, to use the language of Var chari J., may, for convenience of reference, termed as "property liability", (i.e.) a liability: be discharged from out of the property given i security. But some human agency neces should represent the property for �he time Whether it is the original mortgagor or a sub quent assignee, the owner for the time would be liable to pay the debt from and out the property. This concept of the liability of person, confined to property, is not a new ont.

An heir, a ..legal representative and members Joint-account (ii) the liabi of a joint family are other instances where UveSir liability is confined to the properties in their nan All these persons, including the purchaser of th equity of redemption, are liable for the same del J w but, unlike the original debtor, the debt is realfc. able only from and out of the assets or the one vie perty which devolved on them.

It is, therefore, obvious that the character & un Mad 95 (/ the debt has not undergone any metamorphoiii inkata in the process, of transfer but the liability of security continued to be the same, though a ferent person holds the property securing the debt. In this view, the liability of the transferee of tb ) Trw nrinr hypotheca is the same debt which was payable hj Lortv linhnAv the mortgagor at the commencement of the If the purchaser is an agriculturist and If debtor at the commencement of the Act waj agriculturist, it follows that the debt payable the commencement of the Act is liable to be sc down under the provisions of the Act i.e. it be traced back to the original debt whether ed or unsecured.

I shall now proceed to consider the , law on the subject. The earliest case wherein i_ character of the liability of the purchaser o/ & equity of redemption was considered'' is that Varadachariar and Abdur Rahman JJ. in ''ii/39 &L 186 (AIR v. 26) (B). As this was the fodr.dalls for the later development of the law on the rt$ ject, it is appropriate that I should conMcYi case in some detail. There, a suit was for.the recovery of money due under a dated 27-7-1929 executed by Defendant 1 in tnw of the Plaintiff.

In execution of the money decree of:

against the mortgagor, Defendant C purchrued n equity of redemption in a portion of tht fcyi toheca and, in his turn, he sold the same to dii dant 9. Defendant 9, who was admittedly aa "i culturist, claimed relief under Madras Act 1938. It was argued that his liability was asftl "debt" within the meaning of S. 3(iii) of t and that the liability under that section be confined only to personal liability. The tan Judges negatived that contention. ''At pajc If they observed:

There are no words in the definition ci justifying any such restriction; the clause j of any liability and the word ''due'' does im sarily imply that it must) be recoverable ir-sonment of the debtor......"

Later on the learned Judges proceed state:

........the reference to liability in

wide enough to cover every person who manner liable either because he is persona

because he is liable on account of the possession ec| tv property.

It was then contended that the liability of the (tm)< Wioner was not one falling within S. 8 of the t, because he purchased the property only in ! 13 and his liability was not, therefore, one sub-1,0 ilng prior to 1-10-1932. The learned Judges, in . (using to accede to that contention, made the da- towing remarks ''at page 187'':

This proceeds upon a misapprehension of the itare of the Petitioner''s liability. His liability is b iccable to the original mortgage and his pur-""ft "se was not the basis of any new liability. The l)8>! biiity that is now sought to be enforced is the arising out of the mortgage of 1929 therefore falls u/s 8.

This case, therefore, is authority for two ''posi (i): The definition of ''debt'' under the Act �a Se enough to take in the debt of a person who is 5 lUe on account of the possession of the proper!

Libility but is the same liability arising out of mortgage. The second proposition, which has it been emphasised in the later decisions, clearly pports the view expressed by me.

The same principle has been applied to a son Ad heir C Vasantha Rao v. Naravanaswami Ayvar AIR Mad 95 (AIR v. 27) (F) and ''Sethu Rao v. f mkata Reddi AIR 1943 Mad. 634 (AIR v. 30) (G), a idow CC. R. P. No. 9o''8 of 1938, D/- 21-9-1939 (Mart), and a puisne mortgagee ''Periaswami Chettiar Ramaswami Goundan AIR 1941 Mad 113 (AIR v. 23) 5,). The principle of these decisions is that the tiperl,y liability is as much a "debt" within the ffinition of the Act as a personal liability.

The decision in AIR 1939 Mad. 180 (AIR v. 20) (B), has been applied and followed! by Wadsworth " Patanjali Sastri JJ. in AIR 1941 Mad. 02 (AIR v. i(D). The facts in that case were: A mortgage executed by Ohe husband of Defendant 1 in |rour of the Plaintiffs on 6-8-1917. On 13-12-1923, p wife of the mortgagor, i.e. Defendant 1 and his ghter Defendant 2 executed a fresh mortgage in iewal of the earlier mortgage. �On 27-12-1933, the Defendants sold the hypo-ilia to Defendant 4, who undertook to discharge r mortgage by payment of Rs. 2500/- out of the frchase price. Then a suit on the mortgage re-Jjted in a compromise decree by which Defendants nd 4 were enabled to satisfy the decree by pay-(the decree amount in certain instalments. IX"-fidant 4 i.e. purchaser of the hypotheca filed an plication u/s 19 of the Act for scaling down decree. The learned Judges held that the li-jMlity under the compromise decree was liable to I scaled down at the instance of the purchaser. I page 63'', the learned Judges observed: "The compromise is a renewal of the pre-exist-liability of the purchaser, which liability is iceable to the mortgage debt, which debt is itself Itenewal. We are of opinion that when both the tgagor and the purchaser are agriculturists the chaser can claim to have the debt scaled down (the basis that the mortgage debt for which he icame liable is itself a renewal of an earlier debt flavour of the same creditor. "This decision also accepts the principle that i liability of the purchaser of the hypotheca is (a new liability but is the same liability covered jtthe mortgage deed and, therefore, the mortgage can be scaled down under the provisions of Act. It may be mentioned, that, in this case, (''original debt itself was a mortgage debt. Though '', learned Judges did not base their decision on at fact, they relied upon that in a subsequent debt on for holding that the mortgage debt could be ed back oniy-to the earlier secured debt.-

I shall consider the validity of this distinction, in dealing with the subsequent case. That decision is AIR 1942 Mad. 412 (AIR v. 2�) (A). There, the purchaser of property bound by a mortgage sought to scale down his liability. That mortgage liability had its origin in a simple money debt. The learned Judges held that he could indeed go back to an antecedent mortgage by the same mortgagor over the same property but not to an earlier stag* when it was in the form of a simple debt. In distinguishing their earlier decision, they stated ''at; page 412'':

But tho decision in that case is only authority for the position that when a purchaser seeks to; scale down what has been referred to as# property liability under a mortgage, he can go back to an antecedent mortgage by the same mortgagor over the same properties, the date of the property liability being regarded as the date when the property originally became bound by the antecedent debt..

The position is, .however, Quite different wliern the mortgage which binds the property is traced back not to any antecedent mortgage on the same; property, but to a simple money debt due from th" mortgagor. That money debt cannot in any sens''* bo regarded as binding the property purchased by the Appellant and it is clearly debt due from somebody other than the person who claims to scate down the suit liability.

I regret my inability to appreciate or adopt; the distinction made by the learned Judges between the two decisions. If I may say so with respect, the: learned Judges have not borne in mirai! the distinction between a debt and the security for the payment of that debt. See AIR 1931 245 (Privy Council) . It is true that when a mart-gage deed was executed for a pre-existing debt, tb.i? property was given as security for the first time: for that debt.

But the debt has not lost its identity because that was secured by a mortgage. It is certainly a debt which has been renewed or included witMtt the meaning of explanation 3 to S. 3 of the Act. If that is so, what the mortgagor can do, the purchaser of the hypotheca can also do, for, what he-is seeking to scale down is not a new liability but; a debt incurred by the mortgagor.

The decision of the supreme Court in Cheruvu Nageswaraswami Vs. Rajah Vadrevu Viswasundara Rao and Others, , though it does noi; directly decide the question now raised contains observations supporting the view expressed by me. There, the purchaser of a hypotheca subsequent; to the Act claimed relief under the Act. Tine purchaser as well as the mortgagor were not agriculturists. On those facts, both the High Court as well as the Supreme Court held that the purchaser was riot entitled to have the mortgage debt scaled down. But in dealing with that question, they made tb.e following observations ''at page 372'':

It is not necessary that the applicaufc for relief himself should be liable for the debt on tte date that the Act- came into foi\\e The right to claim relief as is well settled by decisions of t.he Madras High Court is not confined to ike person who originally contracted the debt, but is available to his legal representatives and assigns as well, nor is it necessary that the applicant should be personally liable for the debt.

The liability of a purchaser of the equity oU redemption to pay the mortgage debt undoubtedly arises on the date of his purchase; but the debt; itself which has its origin in the mortgage bond did exist from before his purchase and if it was payable by an agriculturist at the relevant date, the purchaser could certainly claim tho privileges of the Act if he himself was an agricu''t-ti. Otat the date of his application. The material Question therefore is whether the mortgage debt wau payable by an agriculturist on 22-3-1938 V'' These observabions, though obiter, express the law on the subject in clear terms. Though the liability of the purchaser arises on the date of the purchase, it, is the mortgage debt that will have to be scaled down under the Act. If, iu that case, the purchaser was an agriculturist and the mortgage debt was pavable by an agriculturist at the commencement of the Act,''their Lordships would have had no difficulty in holding that the mortgage debt was liable to be scaled down.

The facts in that case show that the suit mortgage was executed in discharge of nrior simple debts. If the mortgage debt could not be traced back to the simple debts, even if the conditions laid down in the Act were complied with, the aforesaid discussion would be unnecessary. Wadsworth and Patanjali Sastri JJ. in AIR 1943 Mad. 434 (AIR v. 33) (E) followed their earlier decision without any further discussion.

At this stage, I may briefly notice two distinct lines of case law which, though they may not have a direct bearing on the question raised, bring out the anomaly, if the contrary view is accepted. The Supreme Court in V. Ramaswami Ayyangar and Others Vs. T.N.V. Kailasa Thevar, , held that even where all the judgment-debtors are mortgagors, there could not be any objection to a decree for a reduced amount being passed auainst an agriculturist-debtor while the same relief ia�m? of Statutes) - (C Ml P. C. (1808), Pre.) A contract entered into with a minor is a That judgment was followed by a Full Bench competen of the Madras High Court in ''Venkata-vridhamuiu v. Ramayya AIR 1954 Mad 383 (AIR v. 41) (PB) (L). These authorities, therefore, establish that the provisions of the Madras Agriculturists'' Belief Act trench up on the well-established principle of mortgage law, namely the indivisibility of ihe mortgage.

The other line of cases apply what for convenience may be called the principle of ''lucky purchase'', i.e. even a purchaser who is not an agriculturist, can. take advantage of the fortuitous benefit of the relief given to the agriculturist mortgagor. See Sree Rajah Vadrevu Viswa Sundara Row Bahadur Vs. Vadlamannati Kusalaramayya (died) and Others, and AIR 1946 Mad. 434 (AIR v. 33) (E). The Supreme Court in V. Ramaswami Ayyangar and Others Vs. T.N.V. Kailasa Thevar, did not overrule these decisions.

If the contention of the learned Counsel for the Appellants is accepted, a non-agriculturist purchaser of the equity of redemption would be in a hotter position than an agriculturist purchaser, "(hat cordujnot be the intention of the Act and unless the of the relevant provisions clearly ov.prcss the contrary, I cannot accept an interpretation which introduces this obvious.anomaly.

Prom the aforesaid discussion, it is clear that the liability of the purchaser of the equity of redemption is not a new liability but only one arising under a pre-existing morinaive debt, though his hability is confined only to the properties in his possession. In this view, his right; under the Act is co-extensive with that of the mortgagor, his vender. As the mortgagor can trace back his debt to the earliest debt, whether secured or unsecured, a [purchaser, who gets into his shoes, can also do so.

I, therefore, answer the question in the aah''mative.

Viswanatha Sastry, J.

I agree.

Satyanarayana Raju, J.

I agree.

This Second Appeal coming for final .bearing-alter the decision given by the Pull Bench, yester-c''vay and this day the Court delivered the following judgment.

The lower appellate Court found as a factlUR V24) (PB) that more than double the amount must have bevn#B) Dissent from paid. It relied on Exs. B-l and JB-2 for the purpovf of coming'' to the conclusion that the story o! the '', in this view, plain tills that there were three promissory notes ss r fraudulently re nterfere with the limting of the learned apjkl late Judge.

In the result, the Second Appeal fails ana is dismissed with costs. No leave.