Ethiraja Mudali and Others vs Muthu Reddi alias Muthukrishna Reddi and Others

Balakrishna Ayyar, J.—On 4-12-1922 four brothers executed Ex. A.1, a deed of mortgage for Rs. 3000 in favour of one Govinda Reddi.

The consideration for it according to the recitals in the document, was thug made up (a) Rs. 350 being the balance due on an earlier mortgage

executed on 25-11-1907 by the father of the mortgagors in favour of Govinda Reddi; (b) Rs. 382 being the balance due on a mortgage executed

by the father of the mortgagors in favour of one Doraiswami Pillai, of which Govinda Reddi had taken an assignment; (c) Rs. 404 due on a

promissory note executed by the father and mother of the mortgagors in favour of Govinda Reddi; and (d) Rs. 1955 being the balance due on a

promissory note executed by one Thiruvengada Mudaliar, a brother of the mortgagors and their father in favour of Govinda Reddi on 31-7-1919.

The document also contained a recital making it plain that the brothers had divided amongst themselves on 1-12-1922, for it says: ""The kurchit for

the partition effected by us on 1-12-1922 and the cancelled document and promissory notes aforesaid have been delivered to you as security.

Though the document recited that the liability was joint, the parties proceeded on the footing that each of the brothers was liable to pay one-fourth

of the debt. Two of the brothers. Kannappa Mudaliar and Ramanatha Mudaliar paid their fractions of the debt in full and appropriate

endorsements were made on the mortgage bond--vide Exs. A. 3 and A 4.

The former endorsement ends thus ""The amount due by Kannappa Mudaliar under this bond has become zero"". Ex. A.4 is in the following terms :

On 15th August 1932, 1/4th of the entire balance under this bond, namely, Rs. 1568 (Rs. one thousand five hundred and sixty eight only) by

Ramanatha Mudaliar."" Govinda Reddi, the mortgagee, died and on 31-10-1946 his heirs, three in number, filed O. S. No. 520 of 1940 on the file

of the District Munsif, Chingleput, to recover the balance due under the mortgage.

There were seven defendants in the suit. The first defendant was the second of the four mortgagors as recited in Ex. A 1. Defendants 3 to 5 are

his sons. The 2nd defendant was the fourth of the mortgagors. The 6th defendant is his son. The 7th defendant is an alienee from the 2nd

defendant.

The defendants contended that they were entitled to have the debt scaled down in accordance with the provisions of Act. IV of 1938. On this

point the District Munsif observed.

Believing P. W. 1 and relying on the recitals in Ex. A.1, I find that there was a partition between the mortgagors and their brothers Thiruvenkata

Mudali about a few days prior to Ex. A-1 and that the mortgagors executed ex. A.1 to discharge the debts allotted to them in the partition.

The District Munsif further observed.

But it is clear from what I have stated above that there is no scope for the defendants to invoice explanation to Section 8 of Madras Act, IV of

1938; and to treat the suit debt as a renewal of the prior debts mentioned in Ex. A.1.

On this basis the suit was decreed with costs. The defendants appealed to the District Judge, Chingleput, in A. S. No. 15 of 1949. During the

pendency of that appeal, i.e., to say on 12-1-1949 Madras Act, 23 of 1940 came into force and on 1-8-1949, the defendants filed Appln. No.

286 of 1949 praying that the benefits of that Act might be recorded to them and the decree of the lower court modified accordingly. On 16-11-

1949 the learned District Judge pronounced judgment holding that Act XXIII of 1949 was applicable to the case and in view of that directed,

In the result, both the appeal and the I. A. are allowed and the decree and judgment of the lower court are set aside and both matters are remitted

for fresh disposal according to law.

Against the order of remand the plaintiffs appealed to this court in C. M. A. No. 214 of 1951.

During the pendency of this appeal Madras Act XXIV of 1950 was passed and the respondents to the appeal, that is to say the original

defendants, filed C. M. P. No. 9670 of 1953 praying for relief''s under that Act. On 4-12-1953 Mack, J. disposed of the petition and the appeal

by a common order. He observed :

There has been argument before me as to the method and the starting point for scaling down under the Act as it now stands..... .It is true that

strictly under the mortgage Ex. A.1 there is one principal to discharge which these four brothers are jointly and severally liable. The endorsements

however On the mortgage bear out the plaintiffs'' ease that the brothers regarded themselves separately liable under an undertaking effected at the

time of the mortgage to the extent of one-quarter of the principal in the mortgage and that it was on that footing that two of the brothers discharged

their debt, and the plaintiffs acknowledged their discharge- exonerating them from liability. It was on this looting also that the suit was instituted only

against the two defendants. Mr. Muthuswami Iyer, for the debtors claims a right to enforce the damdupat principle in this case tracing all the debts

back to their Original principal as family debts and also to take advantage of all the payments made by their two brothers in discharge of their

quotas of liability. I have no hesitation in finding that he cannot do so under either Explanation 8 or Explanation 4. The only scaling down which is

at all practicable and possible on the facts of this case is from 1922. The defendants will be entitled to have interest wiped out on their portions of

liability, i.e., respective principals of Its. 750 and scaling down on this basis in accordance with the Act. If the position of Mr. Muthusami lyer is

conceded it would be merely putting a premium on debtors who have deferred payment indefinitely and giving them an undue advantage over other

joint debtors who have even long prior to Act IV of 1938 discharged ,their quotas of liability in full. The appeal is with these observations

dismissed and the case will be remitted to the trial court for scaling down in accordance with these observations.

In pursuance of this order of remand the matter went back to the District Munsif Court, Chingleput. On 13-5-1955 the District Munsif passed a

preliminary decree for sale as prayed for with costs. The defendants again appealed to the District Judge in A. S. No. 220 of 1955. On 22-6-

1955. the learned District Judge dismissed the appeal. The defendants then filed the present S. A. No. 1089 of 1956.

On 18-11-1958 Ramaswarni, J. before whom the appeal came on for hearing referred the matter to a Bench. That is how the case now conies

up before us.

Both the District Munsif nnd the District Judge were bound by the directions which Mack, J. had given, and in the Memorandum of appeal to

this court no complaint is made that either of the courts below had failed to conform to the directions which Mack, J. had given. Mr. Muthuswami

Iyer the learned counsel for the appellants, however, contended that a distinction most be made between the directions which Mack, J. had given

its regards the manner in which the debt should he scaled down and his final decision dismissing the appeal.

According to Muthuswami Iyer, it is only the order dismissing the appeal that has become final. The directions, which Mack, J. gave regarding the

manner in which the debt should be scaled down have not become final, and it is therefore open to him to show that those directions are

erroneous. He considered that the directions in Jainul Abideen Marakayar and Others Vs. Habibulla Sahib, and in the The Right Honourable the

Secretary of State for India in Council Vs. Allu Jagannadham, , supported his contention.

The facts in the former case were as follows: A Mohammedan had mortgaged some properties and the deed contained a covenant for pre-emption

in favour of the mortgagee. Subsequently, he transferred the properties to his wife for a consideration of Rs. 700 which was the mahar debt due to

her. The mortgagee brought an action to enforce the covenant for pre-emption in his favour. He also pleaded that the wife had notice of the

covenant for pre-emption in his favour.

The District Munsif took the view that the covenant for pre-emption was valid but that the transfer to the wife was not a sale but a hiba-biliwas and

as the husband bad not sold the Properties he dismissed the suit. In that view the District Munsif considered it unnecessary to record a finding on

the question whether the wife took the conveyance in her favour with knowledge ot the agreement in favour of the plaintiff.

In appeal the Subordinate Judge held that the conveyance to the wife was a sale and not a gift and that in consequence the plaintiff would have a

right to enforce his right of pre-emption against her if she had purchased with knowledge of that agreement. As that question had not been decided

by the District Munsif the Subordinate Judge set aside the decree of the District Munsif and remanded the suit for fresh disposal. The matter was

then brought before this court. Here the scope of an order of remand was examined and the following observations were made. Referring to

Section 105, Sub-section (2) as it then stood, the learned Judges observed :

We think that this provision confines the scope of the appeal to the question of the correctness of the order of remand, which may he impeached

either on the ground that the remand itself was illegal as the decision of the first court was not on a preliminary point or on the ground that the

decision of the preliminary point by the appellate court is erroneous. No other questions can be raised in this appeal, whatever bearing they may

have upon the merits of the appellants'' case. That this is the right view to take will appear if the question is looked at in another way.

This Court agreed with the learned Subordinate Judge that the transfer was a sale and taking the view that further questions remained to be tried by

the court of first instance, namely, whether the 2nd defendant had taken the sale deed from the first defendant with notice of the plaintiffs right and

what the market value of the property was at the time of the sale to the second defendant remanded the suit for disposal.

The facts in the second case were as follows : The examiner of Local Fund Accounts surcharged one Jagannadham, the president ot the Union

Board of Dharmavaram, in a sum ot Rs. 455-8-0 on the ground that he had failed to collect arrears of house tax for a certain period. Jagannadham

appealed to the State Government, which reduced the amount of the surcharge to Rs. 389-8-0. Jagannadham paid this amount under protest but

later on he filed a suit in the court of the District Munsif of Chodavaram to recover this amount.

His case was that it would have been unlawful for him to collect the arrears of tax, because, according to him, the notification under which the tax

was levied was invalid. The Secretary of State, who was the defendant in the suit, contended that the court had no jurisdiction to try the suit. The

District Munsif overruled that contention and upheld the plea of Jagannadham that the notification was invalid. The Secretary ot State appealed to

the Subordinate Judge of Vizagapatam.

The Subordinate Judge agreed with the District Munsif but remanded the case to the District Munsif to decide whether the tax could be deemed to

be lawfully levied under an earlier notification. On remand the District Munsif held that the earlier notification also was invalid and accordingly

passed a fresh decree. There was another appeal to the Subordinate Judge, who agreed with the District Munsif that the earlier notification was

also invalid.

The Secretary of State came up in appeal to this court, and the point whether the civil court had jurisdiction to try the suit was raised. It was then

objected that as there had been no appeal against the order of remand passed by the Additional Subordinate Judge in the first instance, the point

could not be raised. This Court overruled the objection and held that the question could be gone into. It will be noticed that there is no point of

resemblance between the facts in either of these two cases and those in the present case.

There can be no doubt that when an appellate court remands a case to the trial court for fresh disposal it can give directions as to the manner in

which the suit when it goes back should be dealt with. What Mack, J. decided was that the debtors were entitled to the benefit ot Madras Act IV

of 1938 and that the benefit should be computed on a certain basis. The order dismissing the appeal was consequential on this and the two formed

an integral whole.

That was not the position in either of the two cases which Mr. Muthuswami Iyer cited before us. We are not prepared to accept the con-tendon of

Mr. Muthuswami Iyer that the scope of an order made in an appeal against an Order of remand is so limited that the appellate court cannot give

directions to the trial court as to the manner in which it should deal with the suit when it goes back to it.

We would repeat that the real question which Mack, J. had to decide was: What was the extent of the relief to which the debtors were entitled

under Act IV of 1938, as subsequently amended? Naturally he had to give directions in that regard. Those directions together with the final order

formed one piece and they cannot be dissected. The fallacy in the argument of Mr. Muthuswami Iyer lies in the assumption that the order of Mack,

J. consists of two severable parts whereas it is not really so.

Mr. Muthuswami Iyer finally stated that it has now been held that under Madras Act IV of 1938 it is open to a judgment-debtor, against whom

a decree remains unsatisfied, to apply to the Court to scale down the decree debt, even though he had not taken the plea at an earlier stage of the

case. But that argument is really beside the mark here, since the defendants did raise the plea that they were entitled to the benefits of the Act and

Mack, J. in his judgment after examining the arguments before him gave directions that the debt should be scaled down, on a particular basis. The

present, it must be borne in mind, is not an appeal against the order of Mack, J. His final decision and the directions which he gave in connection

therewith formed an integral whole and they have become final.

In the result the appeal fails and is dismissed with costs.