Seemakurti Subbarayudu vs Seemakurti Sreeramulu and Others

Wadsworth, J.—The appellant who was the second defendant in a litigation which ended in a compromise decree filed an application u/s 19

of Madras Act (IV of 1938), to scale down that decree. The lower Court having regard to the fact that the compromise decree was dated 6th

May, 1937 treated the debt as one falling u/s 9 of the Act and scaled it down holding the view that the antecedent liabilities taken into

consideration in arriving at the figure adopted in the compromise were not debts which could be brought within the purview of the Act. The

litigation which led up to this compromise decree started in 1915 in a partition suit and under the Compromise the defendants 1 and 2 were held

liable for a sum of Rs. 9,000 in respect of principal and interest, of the mesne profits due on the plaintiff''s one third share of certain items and in

respect of the plaintiff''s one third share with interest thereon of the outstandings of the family collected by the defendants 1 and 2 and in respect of

costs and from this amount of Rs. 9,000 it was directed that the payment of Rs. 4,000 made on 8th April, 1937, should be deducted and that the

plaintiff should pay the balance which after making certain adjustments was calculated at the figure of Rs. 4,793-12-0 with interest.

We are not prepared to hold that there was no debt due from defendants 1 and 2 to the plaintiffs prior to the date of the compromise decree.

But it does not necessarily follow that the debt due under the compromise decree can be treated as a renewal of the antecedent liability and scaled

down u/s 8 of the Act. In Budiredla Ramamurti Vs. Matta Sitaramayya, we held that when the compromise which forms the basis of a decree was

demonstrably a renewal of an anterior debt, the Court could scale down that decree on the basis of the principal of the amount originally advanced

together with the amount of any sums subsequently advanced and it was observed that whether a compromise is or is not a renewal of a pre-

existing liability must, to a large extent, be a question of fact in every case. A reservation is also made with reference to complicated cases when

the compromise is the result of mutual concessions and advantages which together make up an agreement from which it would be extremely

difficult to disentangle that part which is a renewal of the original debt. This decision was considered in a later case in Periyatan Katanhipalli

Kannan Nambiar Vs. Ullannur Madhathil Subramania Pattar and Others, where it was pointed out that the reservation already quoted had no

reference to cases involving merely an abatement of a portion of the claim by one side and the withdrawal of the opposition and offer of additional

security for the due payment of the reduced claim by the other, but envisaged cases, where, for instance, by some property being offered and

accepted in full or part satisfaction of the claim, it becomes impossible to regard the transaction in any sense as a renewal of the original debt.

The position on the facts in the present case is that there has never been any ascertainment of the amount of mesne profits due from defendants

1 and 2 to the plaintiffs nor has there been, any scrutiny of the accounts of defendants 1 and 2 to ascertain the amount of outstandings which they

have in fact collected. It does not appear that the amount which could properly be claimed as costs has ever been precisely calculated. What the

parties apparently did when confronted with the prospect of a further prolonged and expensive enquiry coming on the top of more than a quarter

of a century of futile litigation was to put an end to the trouble and expense by agreeing on a lump sum figure which defendants 1 and 2 would have

to pay to the plaintiff and be rid of all further trouble. There are before the Court no materials upon which it could be said to what extent this lump

sum figure represents the principal or interest of the antecedent liabilities and to what extent it represents the costs of the litigation. This is therefore

precisely the type of case contemplated in the reservation made in the earlier of the two decisions cited above wherein it is impossible to

demonstrate that the compromise to any known extent is a renewal of the antecedent liability. In such circumstances the only practicable course is

to scale down the debt as one arising for the first time under the compromise decree.

In this view we dismiss the appeal with costs.