Chacko Saramma vs Kunchen Parameswaran

V. Balakrishna Eradi J

The decree-holder in O.S. 211/58 of the Munsiff''s Court, Adoor has preferred this Second Appeal against the order of the lower appellate court holding that the judgment-debtor-the first defendant-is entitled to the benefits of Act 31/58 and that the decree can be executed only in accordance with the provisions of the said Act. The first defendant had executed a document of sale Ex. D-l dated 27-8-1113 on behalf of himself and his minor sons in favor of the second defendant. One Chacko who is the husband of first plaintiff and father of plaintiffs 2 and 3 obtained in assignment of the rights of the second defendant. Subsequently, a suit was instituted by the children of the first defendant impeaching the alienation effected by the first defendant in favor of the second defendant and this suit-O.S. 476/1123 resulted in a decree where under the sale-deed was upheld only in regard to the proportionate interest of the first defendant and was set aside to the extent of the interests of the minors. The plaintiffs thereupon brought O.S. 211/58 as heirs of Chacko, who had by then died, seeking to recover damages from the first defendant for breach of the covenant of title, contained in the sale-deed Ex.D-1, Like relief was also claimed in the suit against the second defendant the immediate vendor of Chacko. White executing Ex. D-1 sale-deed, the first defendant had created a security in favor of the vendees over the present plaint schedule properties for discharge of any claims arising out of a possible breach of the covenant for title and quiet enjoyment. Therefore; in the present suit relief was claimed against the properties so secured which have been included in the schedule to the plaint. The court passed a decree in favor of the plaintiffs for recovery of a sum of Rs. 473.48 as and by way of damages by sale of the plaint schedule properties. The decree was passed on 24.2.1960, the suit itself having been instituted only on 13.12.58. It is this decree that is now under execution.

Before the executing court, objection was raised on behalf of the first defendant - judgment-debtor that he is entitled to protection under Kerala Act 31/58 and that the decree can be executed only in accordance with the previsions of the Act. The trial court rejected this contention holding that the liability under the decree is a liability arising out of a breach of trust and is therefore, excluded from the purview of the definition of "debt" contained in Section 2 (c) of the Act. On appeal by the first defendant, the lower appellate court took the view that the decree cannot be said to be one in respect of a breach, of trust but is only with respect to a liability arising out of a breach of contract and that therefore, the decree debt is liable, to fee scaled down under Act 31/58. In this view, it set aside the executing courts order and held that the decree-holders are entitled to execute the decree only in accordance with the provisions of Act 31/58. The first plaintiff-decree-holder has thereupon come up to this court with this Second Appeal.

On behalf of the appellant, learned counsel urged before me two points. Firstly, he contended that the decree-debt in the instant case is not a "debt" as defined in Section 2 (c) of the Act because it was not a liability subsisting at the commencement of the Act and that therefore, on this ground alone the claim of the first defendant to relief under the Act has to be negatived. Secondly, it is urged that the view taken by the learned District Judge that the liability under the decree is not one arising out of a breach of trust is incorrect and unsustainable.

In my opinion, the appellant has to succeed on the first point urged by him. As already noticed, the suit O.S. 211/58 was for recovery of damages for breach of a covenant of title. It was instituted only on 13.12.58 and culminated in a decree dated 24.2.1960. The liability in question can be said to have been incurred by the agriculturist in this case only when the claim for damages was upheld by a court and matured into a decree. The mere circumstance that there might have been a breach of the covenant on a date anterior to the commencement of the Act cannot in my view, be taken as the incurring of a liability within the meaning of section 2 (c) of the Act. Nor can any amount be said to haw been due by the agriculturist, first defendant, before the claim for damages was upheld and quantified by the court.

In almost similar circumstances, a Division Bench of the Punjab High Court held in Milkha Singh v Gopala Krishna (A.I.R. 1956 Pun 174 at 176):-

As I view the matter, in order that a claim based on damages should become a ''debt'' and therefore with the definition of S. 2(6) of the Act the Court has to see whether there is a pecuniary liability on the person against whom an application is made. Can it be said that commission of breach of contract is a pecuniary liability? In my opinion a mere breach of contract warranty cannot be said to be a pecuniary liability, because all that the breach amounts to is a right to come to court and recover damages, and I have already discussed about the jurisprudential meaning of the word ''damages''. It is nothing more than the compensation which the Court determines in the circumstances of each case for the injury or loss which has been sustained by the other party. This does not arise because of any existing obligation by the person who breaks a contract but it arises as a result of the determination by the Court and its fiat, and pecuniary liability therefore does not arise till it has been determined that the complainer is entitled to compensation, and, therefore that the Court does is nothing more than to determine the value of the damage done to the other party to the contract but until that determination is given, there is no liability upon the defendant. The basis of a suit for damages is that on the date the suit is brought there is no pecuniary liability and it has yet to be established and the plaintiff comes to Court for that particular purpose.

To the same effect are the observations of Chagla, C.J. in Iron and Hardware (India) Co. Vs. Firm Shamlal and Bros., where a claim for damages was held not to be covered by the words "pecuniary liability" occurring in Section 2 (6) of the Displaced Persons (Debts Adjustment) Act, 1951. I am in respectful agreement with the view expressed in the above rulings and I accordingly hold that the pecuniary liability was incurred by the first defendant only when the decree was passed in the suit. This was admittedly subsequent to the commencement of Act 31/58. The liability under the decree under execution is therefore, not a "debt" as defined in section 2 (c) in respect of which the first defendant can validly claim relief under the Act. In this view, it is unnecessary for me to consider the further question as to whether the liability is one arising out of a breach of trust. The Second Appeal is allowed, the order of the lower appellate court is set aside and that of the executing court restored. In the circumstances of the case, I direct parties to bear their respective costs.