C.S. Ramier vs B.N. Srinivasiah

Wadsworth, J.—This petition raises questions u/s 19 of Madras Act IV of 1938. The decree in question was passed on a mortgage

executed in 1916 by the deceased father-in-law of the first defendant, who has not been proved to be an agriculturist. The appellant (petitioner

here) was the second defendant in the suit, he having taken an usufructuary mortgage over the same properties on 22nd May, 1920, undertaking to

discharge the prior mortgage. Third defendant (the District Board) has acquired the equity of redemption of certain items and is quite clearly not an

agriculturist. On 15th January, 1936, the applicant consented to the passing of a preliminary decree on the prior mortgage and on 6th March,

1937, a final decree was passed. The puisne mortgage right of the applicant has been sub-mortgaged to one Appoji Naidu, who has deposited Rs.

2,700 to the credit of the decree and it was contended in the lower Court by the plaintiff that this deposit satisfied the decree and that there was no

longer any decree to be scaled down. This contention was repelled by the lower Court and it has not been contended before us that this view was

wrong. The lower Court held, however, that the applicant was not entitled to the benefits of the Act because the scaling down of the decree in his

favour would result in a benefit to other defendants who are not agriculturists.

We have already held in C.R.P. No. 653 of 1939 that the representative of a puisne mortgagee who was a judgment-debtor was entitled to be

regarded as a debtor u/s 7 and to scale down the decree u/s 19 of the Act and we dissented from the decision of Newsam, J., in S. Narayanachari

Vs. T.V.A.K.T. Annamalai Chettiar, . But that was a case in which there was not the complication of the owner of the equity of redemption being

a non-agriculturist, so that the decree could be scaled down as a whole. It is argued by Mr. Ramaswami Aiyangar for the decree-holder that the

right of an agriculturist judgment-debtor to scale down a decree should not be allowed to enure for the benefit of a non-agriculturist judgment-

debtor, a proposition with which we are in agreement. But we find it difficult to accede to the further contention that, the mortgage being one and

indivisible, it is wrong in theory and difficult in practice to scale down the decree against the agriculturist judgment-debtor, while leaving it

unamended as against the non-agriculturist judgment-debtors. The theoretical argument is based on the absence from Section 19 of any words

excluding the application of the general law governing mortgages. But Section 19 is only the machinery section. The substantive provisions are

contained in Section 7 which says:

Notwithstanding any law...or decree of Court to the contrary, all debts payable by an agriculturist at the commencement of this Act, shall be scaled

down...

Having regard to our previous decisions, we must hold that the applicant is a judgment-debtor and that the decree debt is payable by him. It

follows that this debt is to be scaled down, notwithstanding the decree and notwithstanding the provisions of the general law which prevent the

person who acquires a partial interest in the hypotheca from denying the liability of his interest to satisfy the whole of the mortgage debt. We are

unable to accept the contention that a debt which is payable by an agriculturist falls outside, the purview of the Act merely because it is also

payable by a non-agriculturist and it seems to us obvious that the mere fact that the applicant has sub-mortgaged his interest to a non-agriculturist

will not deprive the applicant of any benefits to which he may be entitled under the Act as a person liable to satisfy the decree. The practical

difficulties on which Mr. Ramaswami Aiyangar has Laid emphasis, seem to us to be more apparent than real. It will, of course, be necessary to

modify the form of decree, reciting separately the amount payable by the puisne mortgagee and declaring that on the payment of this amount by

him, the interest of the puisne mortgagee will not be liable to be sold or foreclosed and the hypotheca will be sold only subject to that interest; and

that on failure of the puisne mortgagee to pay the amount declared to be due from him within the time allowed, the whole of the mortgaged

property including the interest of the puisne mortgagee will be liable to be sold for the full amount of the decree. This procedure will give to the

agriculturist judgment-debtor the full benefit of the relief to which he is entitled under the Act and will safeguard the rights of the decree-holder as

against those judgment-debtors who are not entitled to the benefits of the Act.

The petition is therefore allowed with costs and the application is remitted to the lower Court for disposal in the light of this judgment.