Haiji Ammal vs S.P. Habeeb Mohammed (died), and 6 others

K.M. Natarajan, J.—This appeal is directed against the judgment of the learned District Judge, Nagapattinam in C.M.A.No. 32 of 1980

confirming the judgment of the Subordinate Judge, Nagapattinam in I.A.No. 626 of 1979 in O.S.No. 97 of 1974. The brief facts leading up to this

appeal are as follows: The appellant herein filed a suit against the respondents-defendants on the foot of a mortgage bond and obtained a decree

giving benefit of the Act 40 of 1978. Since the Act has been repealed by the Act 40 of 1979, he filed an application in I.A.No. 626 of 1979 to

amend the decree under S.16 of the said Act. The first defendant, viz., the first respondent opposed the said application and in the counter, inter

alia, it is con tended that the Act 40 of 1979 cannot be applied to increase the liability of the respondents and it was intended to further scaling

down the debt, the increase of debt of 11/2 times over the principal amount and there was no question of scaling down under the Act 40 of 1979.

Upholding the contention of the respondents the amendment petition was dismissed. Aggrieved by the same he preferred an appeal and he was

unsuccessful. Hence this Second Appeal. This was admitted on the following substantial questions of law:

(1). Whether the courts below are wrong in holding that the liability of the judgment-debtor is sought to be increased under Act 40 of 1979 ?

(2), Whether the courts below are wrong in coming to the conclusion that Section 8(3) of Act 40 of 1979 is a bar to the maintainability of the

application under the provisions of Act 40 of 1979 ?

It is not in dispute that the petitioner/plaintiff filed a suit on the basis of a mortgage and obtained a decree giving the benefit under the Act 40 of

1979 and it is not also in dispute that he has filed a petition under S.16 of the Act within the time-limit of six months for amendment of the decree in

accordance with the provisions of the Act 40 of 1979. But, the question is whether the appellant is entitled to the said relief in view of S.8(3). In

this connection, learned counsel for the appellant drew the attention of this Court to the decision rendered in Lakshminarayana Reddiar v. T.K.S.

Balarama Chettiar (97 L.W. 295) wherein it is observed as follows:

It now remains to consider only two related aspects with reference to Ss.8 and 16 of Tamil Nadu Act 40 of 1979. S.8(3) at first flush 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 been passed. That provision, in my view, cannot be so read as to preserve the rights of a debtor under

Tamil Nadu Act 40 of 1979, for, that would plainly conflict with S.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 as to impose a further liability on the debtor upto the limit of one and a half times the amount of principal.

Therefore, S.8(3) of Tamil Nadu Act 40 of 1979 also cannot be put against the respondent. The only other provision which may be considered to

be applicable on the facts of this case is S.16 of Tamil Nadu Act 40 of 1979 which provides for amendment of decrees. That section pre-

supposes the court having passed a decree for the repayment of a debt, in which event, on an application by judgment-debtor or others mentioned

these in within six months from the date of publication of Tamil Nadu Act 40 of 1979 in the Tamil Nadu Government Gazette, the decree can be

scaled down and amended according to the provisions of Tamil Nadu Act 40 of 1979. In this case, there was no decree at all with reference to

one half of the principal amount and one half of the interest in the suits, O.S. 1910 and 1909 of 1978, because of the statutory discharge u/s 7(1)

(b) of Tamil Nadu Act 40 of 1978, as it then stood. Therefore, in the absence of any decree passed by the Court with reference to one half of the

claim towards principal and the one half of the interest, S.16 of Tamil Nadu Act 40 of 1979, cannot be held applicable to the respondent.

This court had occasion to consider the above decision in Gomathi Ammal v. Nallamuthu Pillai (1989 II M.L.J. 433) wherein it is held as follows:

I am in entire agreement with the views expressed by the teamed Judge in the two decisions, referred to above. Applying the ratio laid down in

those cases, it cannot be said that the order passed by the learned Appellate Authority in allowing the amendment, is either erroneous or illegal so

as to warrant interference with the same.

Learned counsel for the respondents only submitted that in those decisions, while considering the amendment of the decree under S. 16 of Act 40

of 1979 the effect of S.8(3) viz., that no increase of the liability could be made, had not been considered and as such the said decisions will not

apply. But, I do not find any merit in the said contention. Even in Lakshminarayana Reddiar v. T.K.S. Balarama Chettiar (97 L.W. 295) that point

has been clearly dealt with and it has been so stated that S.8(3) of Act 40 of 1979 cannot be put against the respondent as what S.8(3) provides

for is that by reason of application of S.8(1) and (2) of the said Act, the liability of the debtor cannot be increased in excess of the amount payable

by him. To put differently, this provision simply means that the liability was less than 11/2 times as stated in S.8(1) and (2) so as to impose further

liability upto the minimum of 11/2 times the principal. Therefore, S.8(3) of the Act also cannot be put against the respondents. Hence it cannot be

said that the effect of S.8(3) was not at all considered in those decisions while considering the amendment of the decree passed under Act 40 of

1979 in accordance with S.16 the Act. It is made clear that the basis of relief afforded to indebted agriculturists debtors under Tamil Nadu Acts

40 of 1978 and 40 of 1979 is different. While the provisions of Tamil Nadu Act 40 of 1978 enabled a creditor to recover only one half of the debt

due and one half of the interest thereon and discharged statutorily the balance payable by and recoverable from the debtor, the provisions of Tamil

Nadu Act 40 of 1979 permitted the recovery of the principal and the interest not in excess of one and half times the principal. It is only in

accordance with the said provision the amendment is now asked for and that has not been properly appreciated by the court below. In view of the

ratio laid down in the decisions cited supra the substantial questions are answered in favour of the appellant. Accordingly, this appeal is allowed the

order passed by the Court below is set aside and the application I.A.No. 626 of 1979 is allowed. There will be no order as to costs.