Revuri Seshaiah vs Budamgunta Sundara Ramaiah and another

Ramachandra Rao

Revuri Seshaiah, the 3rd Judgment-debtor in O.S. No. 1/1964 on the file of the District Court, Nellore, is the appellant in this Civil Miscellaneous appeal. The facts giving rise to this appeal are as follows. The respondents herein (Plaintiff-decree holders) filed the suit O.S. No. 1/1964 for setting aside the settlement deed executed by the plaintiffs in favour of the defendants. That suit was compromised in A.S. No. 460/1969 on the file of this court on 26-9-1969 under which the judgment-debtors were directed to pay a sum of Rs. 40,000/- to the decree-holders within two mouths from 26-9-1969. In default, it was provided that they should pay interest at 12% per annum. But the amount was not deposited within the time fixed. An amount of Rs. 42,310 was deposited on 17-11-1970 with notice to the decree-holders and the same was withdrawn by them on 18-11-1970. Interest was calculated on the decree amount at 5 1/2% per annum and not 12�% per annum as fixed under the compromise decree. The decree-holders subsequently filed the Execution Petition No. 4/1971 for recovery of a sum of Rs. 3,274-05 P. towards the balance of interest calculated at the rate of 12% per annum.

The judgment-debtors filed a counter in the lower court raising three contentions-Firstly that they were not liable to pay interest from 17-11-1970 the date on which the amount was deposited into court by them with notice to the decree-holders. Secondly, that the compromise decree provides for payment of interest at 12% per annum but the judgment-debtors being agriculturists, they are liable to pay interest only at 5�% per annum u/s 13 of the Andhra Pradesh (Andhra Area) Agriculturist''s Relief Act (Act IV of 1938) (herein after called the Act) ; and thirdly with regard to the costs claimed in the execution petition.

The learned District Judge held that the decree-holders were not entitled to claim interest subsequent to 17-11-1970 and that they were entitled to only Rs. 5480/- towards interest for the period 26-9-1969 to 17-11-70 and not Rs. 6293/- as claimed in the execution petition and secondly that the interest could not be scaled down u/s 13 of the Act as the compromise decree provided for payment of interest at 12% per annum and that the executing court could not go behind the terms of the decree ; and thirdly that the decree-holders were entitled to Rs. 104-05 P. towards the costs of execution. Accordingly the learned Judge held that the amounts due and payable by the judgment debtors to the decree-holders was Rs. 3274-05 p. and posted the matter to 7-2-1972 for settlement of the proclamation of sale of the properties attached. The judgment-debtors have now come up in appeal against the said order.

In this appeal the order of the lower court, that the decree-holders would not be entitled to interest from 17-11-1970 the date of deposit of the decree amount and the determination of the amount of costs of execution at Rs. 104-05p, is not challenged. The only point urged in this appeal is that the judgment-debtors are entitled to the benefit of scaling down of interest u/s 13 of the Act. Sri. M.B. Rama Sarma, the learned counsel for the appellant, at the time of argument, sought to urge that interest is liable to be scaled down u/s 13-A of the Act but subsequently frankly conceded that section is not applicable and that the appellant is not claiming relief u/s 13-A. He however submits that the decree is liable to be scaled down u/s 13 so far as interest is concerned.

But I find it difficult to accept this contention in view of the clear pronouncement of their Lordships of the Supreme Court in K. Hutchi Gowder Vs. Richobdas Fathaimull and Company, In the said case in respect of a debt incurred under a mortgage after coming into force of the Act, a suit was filed in 1950 and it ended in a compromise decree dated 21-12-1950 and certain payments were made towards the decree and thereafter a final decree was passed on 24-6-1955. At that stage, the judgment-debtors filed an application for scaling down the debt. The decree-holder raised an objection that the decree could not be scaled down u/s 12 (2) of the Madras Agriculturists Relief Act (4 of 1938). The learned Subordinate Judge over ruled the objection and held that the decree was liable to be scaled down in terms of Section 13 of the Act. On appeal, a Division Bench of the Madras High Court held that as the statutory right to have the interest scaled down was not claimed before the consent decree was passed, the decree could not be scaled down at the stage of final decree and that Section 19 (2) of the Act, applied to debts payable at the commencement of the Act and in that view the application for scaling down was held to be not maintainable.

The Judgment-debtors carried the matter in appeal to the Supreme Court and their Lordships summarised the legal position at page 580 of the said reports, as follows :

(8). The legal position may be briefly stated thus. Sections 7, 8, 9, and 13 from a group of sections providing the principles of scaling down of debts incurred by agriculturists under different situations. A debt can be scaled down in an appropriate proceeding taken in respect of the same. But in the case of debts that have ripened into decrees, S. 19 (1) and (5) prescribe a special procedure for re-opening the decree only in respect of debts incurred before the Parent Act. The parent Act does not provide for the re-opening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.

Their Lordships clearly laid down that in respect of a debt coming u/s 13 of the Act, there being no machinery for re-opening the decrees, the decree cannot be re-opened u/s 13 of the Act.

Sri Rama Sarma contends that the compromise decree constitutes a a fresh debt, that at the stage of recovery of the amount due under the compromise decree, the judgment-debtor could claim relief u/s 13 of the Act and the court is bound to grant such a relief so far as interest is concerned.

But is argument also cannot be accepted because the claim for such a relief should have been put forward before the compromise decree was passed, but the appellant did not do so. Therefore the relief cannot be claimed at the stage of execution of the said compromise decree. Even assuming that the appellant is entitled to claim the relief of scaling down of the interest in accordance with the provisions of Section 13, there being no machinery for re-opening the consent decree, I do not think it is permissible for the executing court to give such a relief at the stage of execution.

In K.N. Nannier and Others Vs. Krishnaveni Ammal, a Full Bench of the Madras High Court held that the provisions of section 19 (2) of the Act could not be availed of by a non-agriculturist debtor within the scope of Section 13A in order to scale down a decree passed against him.

In view of this clear legal position, the appellant''s claim to have the debt scaled down in accordance with the provisions of Section 13 of the Act, has to be rejected. In the result, the appeal fails and is dismissed with costs.