Chintapalli Venkataratnam vs Merla Seshamma

Satyanarayana Rao, J.—This civil miscellaneous appeal has been placed before us under the directions of the Honourable the Chief Justice

for a reconsideration of the decision in ''C.M.A. Nos. 316 and 391 of 1947 by our learned brethren Subba Rao and Somasundaram, JJ. As the

case itself has been referred to us and not merely a question, it is necessary to state the facts out of which this appeal arises in order to appreciate

the questions that arise for decision.

The legal representative of the third defendant in O. S. No. 16 of 1939 and who is also her adopted son is the appellant in this appeal and also

the petitioner in C.M.P. Nos. 8384 and 8627 of 1950. O. S. No. 16 of 1939 was Instituted to enforce a mortgage dated 6th November 1926 for

a sum of Rs. 12,000, executed by defendants 1 to 3 and also by the first defendant as guardian of his minor son the fourth defendant. The first

defendant is the husband of the second defendant and the third defendant is the first defendant''s paternal uncle''s widow. She adopted one of the

sons of the first defendant. The mortgage (Ex. A) was executed to discharge certain earlier debts. The property covered by the mortgage belonged

originally to certain Chintapam people who mortgaged the property to the plaintiff on 24th May 1920 for a sum of Rs. 5,000 (Ex. D). They were

also indebted to the same plaintiff under a promissory note dated 1st December 1921 (Ex. E), the principal of which was Rs. 1,000. Under two

documents dated 14th June 1925 (Ex. G) and 12th October 1925 (Ex. H) the property was purchased by the second defendant subject to earlier

mortgage and also with an obligation attached that from and cut of the consideration for the sale the debt due under the promissory note should be

discharged by her. It is common ground that the purchase by the second defendant, the wife of the first defendant was for the benefit of the family.

The suit was instituted on 15th October 1939 and in that suit the third defendant claimed, taking advantage of the provisions of Madras Act IV of

1938, that she was entitled to have the debt scaled down along with the other dependants who also claimed similar reliefs. She pleaded further

''that she was only a surety for the debt and her liability was coextensive with that of the principal debtors. The learned Subordinate Judge who

tried the suit allowed the benefits of the Act to the third defendant also to the same extent as he had allowed to the other defendants who were the

other mortgagors, that is, the debt was scaled down so as to reduce the debt due under the suit mortgage to the principal amounts due under Exs.

D and E.

There were two appeals against that decision to this Court one by the plaintiff which was A. S. No. 6 of 1942 and the other by the defendants 3

and 7, A. S. No. 516 of 1941. We may leave out of consideration A S. No. 618 of 1941 as it has no bearing to the present controversy. In A. S.

No. 6 of 1942 the plaintiff-creditor claimed that she was entitled to a decree against the third defendant for the principal sum mentioned In the suit

mortgage with interest scaled down according to the provisions of the Act, and that the decree granted by the lower Court giving her also the

benefits of the provisions of the Act so as to reduce the debt further as in the case of other mortgagors was not justified. This Court held that the

third defendant was not entitled to the benefits of the Act in the same and to the same extent as the other defendants as she became a debtor for

the first time only when she joined in the execution of the suit mortgage in 1926. The learned Judges were not satisfied that the position of the third

defendant was that of a surety. ''The judgment of this Court was pronounced on 2nd December 1943. After this in the usual course, a final decree

in the suit was passed on 27th March 1946. The creditor thereafter filed E. P. No. 148 of 1946 on 23th November 1946 to bring the mortgaged

properties to sale. Apparently these proceedings dragged on for a long time for some reason or other and meanwhile the Madras Agriculturists''

Relief Act was amended by Act XXIII of 1948 which came into force on 25th January 1949. Under the amended provisions a new explanation

(Explanation III) to Section 8 was added by which the view taken by this Court regarding the requirements that go to constitute ""the same creditor

and ""the same debtor"" within the meaning of the Act was radically altered. With a view to make this provision retrospective they introduced also

Section 16, the construction of which is the subject-matter of this appeal.

Taking advantage of these provisions the third defendant in the first instance applied u/s 20 of the Act in E. A. No. 219 of 1949 to stay the

execution of the decree which was granted by the Court on 28th June 1949; the petition itself having been filed six days earlier. This was followed,

by an application to scale down the decree. This was I. A. No. 981 of 1949, dated 10th August 1949. The application was naturally opposed by

the decree-holder on various grounds. The learned Subordinate Judge, who disposed of the matter finally rested his decision on the ground that as

the decree that was ultimately passed namely the preliminary decree was one passed by the High Court, the remedy, if any, of the third defendant

was to have moved this Court for scaling down the decree and that he had no jurisdiction therefore to deal with the matter. He also expressed his

opinion on the other points also which was adverse to the third defendant.

In the result, the application, I.A. No. 981 of 1949, was dismissed by the learned Subordinate Judge on 6th March 1950. Against that decision the

legal representative of the third defendant, the third defendant having died in the meanwhile, preferred C.M.A. No. 460 of 1950 on 18th July 1950

and by way of abundant caution on 14th August 1950 he also filed C.M.P. No. 8627 of 1950 to scale down the decree debt in A. S. No. 6 of

1942.

When the appeal and the petition were posted before myself and Raghava Rao, J., the effect of Section 16 of the Madras Agriculturists Relief

(Amendment) Act XXIII of 1948 was debated. It was contended on behalf of the appellant that Sub-clause (iii) of Section 16 of that Act enables

the appellant to claim the benefits of the Act notwithstanding the earlier adjudication of this Court which has become final while for the respondent

this position was contested and reliance was placed by the respondent on a decision of a Bench of this Court in ''C.M.A. Nos. 316 and 391 of

1947'', in which the view which supports the respondent was taken. As we felt a doubt regarding the correctness of this decision the matter was

referred to a Full Bench for reconsideration.

It cannot be seriously disputed that the appellant is entitled to the benefits of the new Act if the provisions of Act XXIII of 1948 are held to be

retrospective. If the appellant is entitled to the benefits of the new provisions the debt should be scaled down in accordance with those provisions.

The point therefore for consideration is whether the Act is retrospective. In order to give retrospective effect to the provisions of the Act, Section

16 was enacted in the Act (XXIII of 1948). It is as follows :

The amendments made by this Act shall apply to the following suits and proceedings, namely:

(i) all suits and proceedings instituted after the commencement of this Act;

(ii) all suits and proceedings instituted before the commencement of this Act, in which no decree or order has been passed, or in which the decree

or order passed has not become final, before such commencement;

(iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act :

Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act.

The provisions of tills section are clearly mandatory as the section itself says that the amendment made by this Act ""shall apply"" to the following

suits and proceedings. The clause that is relied on in support of the contention advanced on behalf of the appellant by his learned Advocate Mr.

Rama Rao is Clause (iii). He also at one stage of the arguments attempted to rely on Clause (i) but, when it was pointed out to him that there was

no proceeding instituted after the commencement of this Act in the present case except the proceeding for scaling down which has been started

after the new Act came into force he abandoned that contention and did not further press his contention based on Clause (i). Clause (i) therefore

may be left out of consideration altogether. It cannot be doubted that the two Clauses (ii) and (iii) are entirely independent and are intended to

provide for different situations. As has been rightly pointed out on behalf of the respondent by Mr. Kuppuswanmi in construing a provision like this

which gives retrospective operation to a statute it is incumbent upon the Court to give effect to the plain language of the section and that

retrospective operation should not be unduly extended; nor should it be negatived or cut down if the language makes it imperative that such

operation should be given.

It is not open to a Court of construction in interpreting a statute either to add or to subtract from the language of the statute. As far as possible an

attempt should be made to reconcile and interpret the provision of a statute in a manner so as to make none of the provisions ineffective or

nugatory. If possible the provisions of the Act must be so construed so as to give effect to all the provisions. A provision can be rejected as

unnecessary only if a Court is driven to such a situation and not otherwise. Bearing these principles in mind it is clear that Clause (ii) applies to

pending proceedings, that is, proceedings which were instituted before the commencement of the Act but which did not become final before such

commencement. This is made clear by the clause ""in which the decree or order passed has not become final."" It implies therefore that if the decree

or order passed in a suit or proceeding becomes final before the commencement of the Act the provisions of the Act cannot be applied to such a

suit or proceeding. But in Clause (iii) the words ""in which ''the decree or order passed has not become final"" do not occur. It is quite general and

applied to all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this

Act so that it seems to apply to decrees or orders even if they had become final before the commencement of this Act provided the decree or

order has not been executed or fully satisfied.

The view taken by the learned Judges in the civil miscellaneous appeals already referred to was that while the two clauses are independent, Clause

(iii) has no application to proceedings in which the decrees or orders have become final before the commencement of the Act. It is this view which

is also pressed now before us by the learned Advocate for the respondent. While we agree with the learned Judges in holding that the two clauses

are independent, we are unable with great respect to accept the view that Clause (iii) applied only to cases in which the decrees or orders have not

become final. If the decree or order has not become final before the commencement of this Act, Clause (iii) in our opinion seems to be

unnecessary and as such the case would be covered by Clause (ii).

Further, it would be difficult to imagine that a decree or order which has not become final can be finally executed or can be finally satisfied, NO

doubt it is true that even when an appeal is pending a decree may be executed and satisfaction may be entered. But all that is only subject to the

result of the appeal If the appeal succeeds or the amount due by the defendant to the plaintiff is increased by the appellate Court fresh execution

has to be started, the satisfaction must be reopened and the execution must proceed.

The Legislature, in our opinion, when it enacted these two provisions must have intended that even in the case of decrees or orders which have

become final, having regard to the provisions of the new Act, relief should be had by the judgment-debtor so long as the decree or order was not

executed or was not satisfied in full before the commencement of the Act. If however a decree was executed in part and before it was fully

satisfied the debt was scaled down under the provisions of the Act as a result of which the creditor was found to have received more than what he

was entitled to the proviso enacts that in such a situation the creditor should not be required to refund any sum which has been paid to or realised

by him before the commencement of this Act.

The question is asked, and legitimately, as to which are the kinds of decrees or orders which have become final and which are sought to be

excluded by implication in Clause (ii) of Section 16. It is of course not easy to give an exhaustive list of such decrees or orders. It may be that the

Legislature contemplated that decrees and orders of a declaratory nature and which are not executable and which have become final before the

commencement of the Act, need not be opened. A reading of the two clauses together would suggest that Clause (iii) would apply exclusively to

executable decrees or orders which though they have become final before the commencement of the Act are still in the stage, of unfinished

execution and at the stage at which satisfaction was not fully received. The view which we take in our opinion, reconciles both the clauses and does

not make any of the clauses unnecessary. For, if the view taken by the learned Judges and strongly pressed now before us by the learned

Advocate for the respondent is accepted, it seems to us that Clause (iii) is wholly unnecessary, such a construction of a statute should be as far as

possible avoided if it is possible to avoid it. We are therefore of opinion that the view taken by the learned Judges in ''C.M.A. Nos. 316 and 391

of 1947'', is erroneous and the decision must be overruled.

The result of our view is that the legal representative of the third, defendant is entitled to the benefit of the provisions of the Amending Act XXIII

of 1948 and to have his debt scaled down in accordance with the provisions of the Act with reference to Exs. D and E also. As the amount has not

been ascertained by the lower Court we think the best course is to allow the appeal and remand the application to the lower Court for the

determination of the amount after giving credit to payments, if any, made by the third defendant or the third defendant''s legal representative. I.A.

No. 981 of 1949 is therefore remanded. The appellant is entitled to his costs in this court.

No orders are necessary on C.M.P. Nos. 8384 and 9827 of 1950.