Chinna Gounder vs Ramaswami Gounder and others

P.K. Sethuraman, J.—The second defendant is the appellant. This is an appeal against the order passed by the learned subordinate Judge,

Salem, allowing the petition filed by the plaintiff under S. 16 of the Tamil Nadu Act 40 of 1979 for amendment of the decree in O.S. No. 93 of

1974. The plaintiff had filed the suit on the basis of a mortgage deed, dated 14.12.1960, executed by the defendants 1 and 2 and the second

defendant as guardian of the minor third defendant, undertaking to pay the principal amount of Rs. 7,000 borrowed under the said mortgage deed

with interest at 6 1/4 per cent per annum within two years from the date of execution of the said mortgage deed. The suit was tiled in the year 1974

for the recovery of the amount of Rs. 9,292 taking into account Rs. 2,000 paid by the defendants towards the principal on 12.7.1962. In the plaint

itself it has been stated that the defendants are agriculturists entitled to the benefits of Act 4 of 1938. Ultimately, after contest a preliminary

mortgage decree was passed in favour of the plaintiff for the recovery of a sum of Rs. 110 together with interest at 6 1/4 per cent from 16.7.1978.

It is seen from the judgment that taking into consideration the payments alleged to have been made besides the admitted payment of Rs. 2,000 the

trial Court held that Rs. 2,690 has to be given credit towards the principal and the debt has to be scaled down. It was also held that the defendants

would be entitled to the benefits of Act 40 of 1978. Further, soon after the filing of the suit the defendants were shown to have paid a sum of Rs.

4,200 on 15.9.1974. Taking the payments, the balance of Rs. 110 was found to be payable. Accordingly a preliminary mortgage decree was

passed for Rs. 110 only on 23.2.1979. Thereafter the plaintiff filed I.A.No. 1247 of 1980 under S. 16 of the Tamil Nadu Act 40 of 1979 praying

for amendment of the decree contending that under the provisions of Act 40 of 1979 the decree passed in his favour has to be amended. The

second respondent in the counter contended that the petition is not maintainable and since the decree was passed only after contest the plaintiff

should have filed an appeal and hence he is bound by the decree and the change of law after passing of the decree does not give him the right to

amend the decree and Act 40 of 1979 does not provide for scaling up of the decree increasing the liability by virtue of repealing of Act 40 of

1979. S. 16 comes under the chapter scaling down of certain debts and provides for scaling down of the decree in respect of the decrees passed

before the commencement of the Act. Act 40 of 1979 came into force on 15.7.1978 and since the decree was passed in the suit after 15.7.1978

and as S. 16 deals with scaling down of the decree passed before the commencement of Act and not scaling up of the decree, the said section,

viz., 16, has no application. There is no other provision in Act 40 of 1979 to amend the decree passed after 15.7.1978 and to scaling up the

decree. S. 8(3) of Act 40 of 1979 provides that the liability of a debtor cannot be increased by virtue of passing of Act 43 of 1979. So the plaintiff

is not entitled to seek the amendment of the decree as prayed for by him and the petition has to be dismissed.

The learned Principal Subordinate Judge, Salem, who enquired into the petition, held that in as much as S. 16 provides for an application by the

decree holder within six months from the date of publication of Act 40 of 1979 to amend the decree, the objection put forward by the

respondents/defendants is not well-founded and as the application under S. 16 has been filed within a period of six months, S.16 of Act 40 of

1979 will have to be applied and the decree has to be amended. Accordingly the petition was allowed. Aggrieved with the said order passed by

the learned Principal Subordinate Judge, Salem, the present appeal has been filed by the second defendant.

It is the contention of the appellant chat the lower Court failed to see that the suit was decreed after contest and the parties are bound by that

decree and change in law after the passing of the decree does not give rise to have the decree amended and Act 40 of 1979 envisages only scaling

down of the decree and not scaling up and the decree passed on 23.2.1979 after the commencement of the Act 40 of 1979 which commenced on

15.7.1978 cannot be amended and the lower Court also failed to see that under S. 8(3) of the Act 40 of 1979 the liability of the debtor cannot be

increased by reason of Act 40 of 1979.

The point that arises for consideration in this appeal is as to whether the amendment of the decree allowed by the lower Court is not proper and

hence the petition filed by the plaintiff under S. 16 of Act 40 of 1979 has to be dismissed.

S. 16 of Act 40 of 1979 is in respect of amendment of certain decrees passed before the date of publication of Act 40 of 1979 in the Tamil

Nadu Government Gazette. The said section gives the right to file an application to the judgment debtors who come under the definition of the

debtor"" as defined in the Act as well as the decree-holder within a period of six months from the date of publication of Act 40 of 1979. It is also

to be noted that the said provision has to be applied notwithstanding anything contained in the Code of Civil Procedure. The Act had been shown

to have been published on 13th June, 1979 in the Tamil Nadu Government Gazette and came into force on 15.7.1978. In this case the preliminary

decree for mortgage was passed on 23.2.1979 and therefore there could be no doubt that the decree was passed before the publication of Act 40

of 1979 in the official gazette. It is also to be noted that having regard to the provisions of the Act 40 of 1978, the decree had been passed. Under

S. 6(2) of the Act 40 of 1978 the debtors are not liable to pay more than what is scaled down under the provisions of the Act 40 of 1978. In this

case the principal amount was Rs. 7,000 out of which even according to the plaintiff Rs. 2,000 has been paid. Including interest the suit was filed

for the recovery of Rs. 9,292. In view of Act 40 of 1978 and also taking into consideration the payments alleged to have been made by the

defendants as well as the admitted payment of Rs. 2,000 the trial Court originally held that the suit will have to be decreed for the amount of Rs.

4,310 minus the amount of Rs. 4,200. Accordingly the decree was passed for Rs. 110. But under the Act 40 of 1979 the debtors became liable to

pay 1 1/2 times the amount of the principal whether by way of principal or interest and if any debtor has paid 1 1/2 times the principal by way of

interest or towards principal such debts were to be deemed wholly discharged as per S. 8(1). If the payment falls short of 1 1/2 times the amount

of principal so much of the amount as would make up such shortage shall be repayable as per S.8(2). Now the appellant/second defendant would

contend that Act 40 of 1979 is enacted to scale down only and not for scaling up and as per S. 8(3) of Act 40 of 1979 the liability of the debtor

cannot be increased by reason of the passing of the Act. In this connection it is to be seen that in the decision reported in Lakshminarayana

Reddiar v. T.K.S. Balarama Chettiar 97 L.W. 295 = 1985-1-M.L.J. 148 , rendered by Ratnam, J., the provisions of Act 40 of 1978 and Act 40

of 1979 have been dealt with and the facts in that decision related to a case in which decree had been passed invoking the provisions of Act 40 of

1978 and the creditor brought a suit subsequently for recovery of the balance amount on the basis of the provisions of Tamil Nadu Act 40 of

1979. The learned Judge has dealt with the impact of Act 40 of 1979, on Act 40 of 1978. The learned Judge has pointed out (paragraph 7) that

the statutory deemed discharge under Tamil Nadu Act 40 of 1978 having been statutorily undone by the provisions of Tamil Nadu Act 40 of

1979, whatever rights were originally available to the creditor were restored to him protected from the bar of limitation to be enforced within the

framework of Tamil Nadu Act 40 of 1979. The right to recover one-half of the principal and one-half of the interest was restored to the creditor

by the provisions of Tamil Nadu Act 40 of 1979 and that claim was preserved intact under S. 34 of the Act so that the right could be enforced

without in any manner being affected by the provisions of the 1978 Act. Therefore the discharge of the liability under the provisions of Tamil Nadu

Act 40 of 1978 was wiped out as if Act 40 of 1978 had not been passed.

In dealing with S. 8(3) in paragraph 8 at page 155 the learned Judge says that S. 8(3) at first blush would appear to suggest that the debtor

ought not to be saddled with liability in any sum, in excess of the amount, which would have been payable by him, if Tamil Nadu Act 40 of 1979

had not been passed. That provision cannot be so read as to preserve the rights of a debtor under Tamil Nadu Act 40 of 1978, for, that would

plainly conflict with Ss. 32(1) and 33(1) of Tamil Nadu Act 40 of 1979. All that S. 8(3) provides for is that by reason of the application of S. 8(1)

and (2) of Tamil Nadu Act 40 of 1979, the liability of a debtor cannot be increased, in excess of the amount that would have been payable by him,

if the provisions of Tamil Nadu Act 40 of 1979 were not there. To put differently, this provision simply means that if the liability of a debtor, was

less than one-and-a half times the amount of principal, whether by way of principal or interest or both, S. 8(1) or (2) cannot be so applied so as to

impose a further liability on the debtor upto the limit of one-and a-half times the amount of principal.

The learned counsel for the respondents also pointed out that under S. 31 of Act 40 of 1979, Act 40 of 1978 had been repealed, except S. 29

thereof and under S. 32 of Act 40 of 1979 it has been stated that S. 8 of the Tamil Nadu Generate Clauses Act, 1891 shall not apply to the repeal

of the said Act and every proceedings taken under the said Act shall abate. Therefore, having regard to S. 32 of Act 40 of 1979, the decree

passed while Act 40 of 1978 was in force becomes liable to be amended as per S. 16 of Act 40 of 1979. S. 33 of Act 40 of 1979 makes it clear

that any liability incurred or arising under any debt due from a debtor shall be deemed never to have been discharged under the said Act, as if the

said Act was not passed and every such debt shall be scaled down in accordance with the provisions of the Act. Thus, having regard to the

decision reported in Lakshinarayana Reddiar v. Balarama Chettiar1. I feel the order passed by the principal subordinate Judge, Salem, allowing

the petition filed by the decree holder for amending the decree in accordance with the provisions of Act 40 of 1979, is a proper one. Accordingly I

find no merit in this appeal. In the result the civil miscellaneous appeal is dismissed. However, there will be no order as to costs.