Nimmagadda Ramaseshayya vs Adusumilli Kutumba Rao and Another

Wadsworth, J.—This revision petition raises the question of the meaning of words ""debts incurred before the 1st October, 1932,"" in Section

8 of the Madras Act IV of 1938. The transaction with which we are concerned is a decree dated 2,1st August, 1936, which itself is passed on the

basis of a promissory note of 1928 which promissory note was in renewal of an earlier promissory note of 1925. The learned Subordinate Judge,

has held that the debt to be scaled down is the decree itself and not the antecedent debt which formed the basis for the decree. He bases his

decision on the definition of the word ''debt'' in Section 3 of the Act which contains the words:

''Debt'' means any liability in cash or kind...due from an agriculturist, whether payable under a decree or order of a civil or revenue court or

otherwise.

He holds that since the definition of the word ''debt'' covers one payable under a decree we must regard the decree as the starting point and

since the decree was passed in 1936, it must be scaled down u/s 9 of the Act and not u/s 8. The learned Subordinate Judge has not, however,

considered two provisions in the Act, which, in our opinion, render it impossible to hold the view which he expresses.

Firstly, we have the second part of Section 7 which says:

No sum in excess of the amount as so scaled down shall be recoverable from him or from any land or interest in land belonging to him; nor shall his

property be liable to be attached and sold or proceeded against in any manner in the execution of any decree against him in so far as such decree is

for an amount in excess of the sum as scaled down under this Chapter.

This provision seems to contemplate the scaling down of the original debt notwithstanding a decree and it is difficult to give any meaning or

purpose to this clause if the process of scaling down is to start with the decree. Secondly, we have the first clause of Section 8 which, in dealing

with the way in which debts incurred before the 1st October, 1932, shall be scaled down, speaks of interest outstanding on the 1st October, 1937:

Whether the same be payable under law, custom or contract or under a decree of Court and whether the debtor other obligation has ripened into''

a decree or not.

It seems to us impossible to give any effect to the words ''whether the debt or other obligation has ripened into a decree or not'' if the debt

contemplated in the initial words of the section is the decree itself. On the other hand this first clause of Section 8 seems quite clearly to

contemplate the debt incurred before the 1st October, 1932, as the original debt which ultimately ripened into a decree, and consequently it must

be the date of the original debt which is the governing factor and not the date of the decree. The inclusion of a decree in the definition of ''debt'' in

Section 3(iii) of the Act is quite consistent with this view. For obviously there are many debts which start with the decree, as for instance, when

there is a decree for damages, which of itself creates a debt bearing interest and liable in certain circumstances to be scaled down. Clearly the idea

underlying these provisions is that when the decree merely enforces the payment of a pre-existing debt bearing interest, that pre-existing debt shall

be regarded as the liability, the date of which shall govern the section to be applied.

This subject has come already before this Court, though there is apparently no considered decision of a bench hitherto. In Mantena Kanakaraju

Vs. Datla Atchutharamanaraju and Another, , there is a very brief judgment of one of us, adopting the view which we have just adumbrated though

it ideals with another point which does not arise here. In Narayanaswami Naidu and Another Vs. Rajamanickam Pillai, , Horwill, J., has taken the

same view even with reference to a compromise decree. We are not now concerned with compromise decrees, which may possibly be affected by

different considerations. But it is to be noted that the learned Judge definitely regards the debt incurred before the 1st October, 1932, as the

original liability which has ripened into the decree and does not treat, the decree itself as the starting point. Other cases have been quoted before us

in which this view has been tacitly assumed to be correct without any argument or consideration of the point involved. Vide Anandam by guardian,

the Official Trustee of Madras Vs. T.S. Muthukumaraswami Mudali, and the decision of the bench in Perianna Goundan Vs. Sellappa Goundan

and Others, .

Unfortunately the respondent in the present case is not represented. But we have to express our gratitude to Mr. D. Narasaraju who has given

us the benefit of his argument for the respondent as amicus curiae, he having gone into the subject with reference to another case posted for hearing

by us in which a similar question arises. The only authority which he has been able to cite on behalf of the respondent is contained in a mere

observation of Venkataramana Rao, J., in V. Sreenivasachariar and Another Vs. Krishniah Chetty and Others, , where the learned Judge merely

remarks that there is a good deal of force in the contention that when the decree has been passed after the 1st October, 1932, it is governed by

Section 9 of the Act. He gives, however, no decision to this effect and the matter does not appear to have been argued at length before the learned

Judge. We are clearly of opinion that when there is a debt incurred before the 1st October, 1932, which has ripened into a decree after the 1st

October, 1932, the scaling down must be governed by Section 8 and not by Section 9.

We therefore allow the petition and remit the matter to the lower Court with a direction to scale down the debt in accordance with this decision.

The petitioner is entitled to costs.