M. Varadaraja Perumal Pillai and Another vs Palanimuthu Goundan

Wadsworth, J.—This revision petition arises out of an application by a judgment-debtor u/s 19 of Madras Act IV of 1938 and raises a

question regarding the meaning of Section 10(2)(ii) of that Act.

The essential facts are that the judgment-debtor purchased lands under a sale deed of February 1923 whereby the purchase price was to be

paid by the discharge of two debts and the execution of a promissory note for the balance. This promissory note was twice renewed and the

renewed note of 1932 was assigned in 1936 to the plaintiff by endorsement. The plaintiff got a decree on the promissory note and when the

judgment-debtor applied to scale down the decree, the plaintiff pleaded that the liability was one in respect of which a charge was provided u/s

55(iv)(b) of the Transfer of Property Act and that therefore the provisions of Section 8 of Madras Act IV of 1938 could not be applied.

For the purpose of deciding this case, we assume that the decision in Elumalai Chetty and Jagannadha Chetty Vs. P. Balakrishna Mudaliar, is

correct, though there is some conflict of authority on the question whether a mere endorsement of a promissory note which represents unpaid

purchase money carries with it the security in the shape of the vendor''s lien. Assuming that there was in fact no charge which the plaintiff-assignee

could work out against his debtor, is the plaintiff entitled to rely on the provisions of Section 10(2)(ii)? This provision may be read in two ways. It

may be read as safeguarding any liability for which a charge u/s 55(iv)(b) of the Transfer of Property Act subsists; or it may be read as protecting

any liability of the category of liabilities in respect of which a charge is provided u/s 55(iv)(b) of the Transfer of Property Act. We are of opinion

that the latter interpretation is the correct interpretation and that the intention of the Legislature was to specify those classes of liabilities in respect

of which the scaling down provisions of the Act? were not to operate and that the exclusion of liabilities of these categories was not to depend on

the actual subsistence of the charge but on the question whether in the beginning the liability was one belonging to that category in respect of which

the Transfer of Property Act provided a charge.

Now, applying this criterion to the present case, undoubtedly the liability of the judgment-debtor to his vendor was one in respect of which a

charge was created by the operation of Section 55(iv)(b) of the Transfer of Property Act. It is, as we have suggested, doubtful whether that charge

could be enforced by an endorsee of the promissory note in the absence of a registered conveyance. But the essential category into which the

liability falls is not, in our opinion, affected by the assignment of this liability to a third party and we consider it is one which falls into the category

referred to in Section 10(2)(ii) of the Act. As we have more than once pointed out, this Act IV of 1938 is an expropriatory measure and if there is

any doubt as to the meaning of its terms, that doubt should be resolved in favour of the person expropriated and not of the person who claims the

right to expropriate. In this view, we agree with the decision of the trial Court and dismiss the petition and the connected appeal with costs in the

civil revision petition.