Venkatammal vs K.V. Ramaswami Aiyar and Others

Wadsworth, J.—This petition is preferred by the fourth defendant in a mortgage suit, who filed an application u/s 19 of the Madras

Agriculturists Relief Act to scale down the decree. The application was unsuccessful to the extent of Rs. 2,500 which the learned Subordinate

Judge held to be protected by the provisions of Section 10 (2)(ii) of the Act and it is this decision which the petitioner seeks to revise. The suit was

based on a mortgage dated 13th December, 1923, executed by defendants 1 and 2 in favour of the plaintiff. This mortgage is alleged to be a

renewal of an earlier mortgage dated 16th August, 1917, executed in favour of the same creditor by Subbaraya Goundar, who is said to have been

the husband of the first defendant and the father of the second defendant. After the execution of the mortgage of 1923, the mortgagors on

27thDecember, 1933, sold the hypotheca to the petitioner (fourth defendant) under a sale deed in which she specifically undertook to discharge

the mortgage by payment of Rs. 2,500 out of the purchase price. She did not pay and the mortgagee filed a suit which resulted in a compromise

decree, by the terms of which defendants 2 and 4 were enabled to satisfy the decree by paying Rs. 1,500 by 24th August, 1935 and Rs. 2,050 by

16th July, 1936, but in default of such payments the compromise decree, was to be a final decree for the full plaint claim (Rs. 4,348-8-d) with

interest and costs. This default clause became operative, for the only payments made were Rs. 500 on Ist March, 1936; Rs. 1,000 on, 13th July,

1936; and Rs. 1,000 on 5th January, 1937.

The decision of the learned Subordinate Judge that the decree is protected to the extent of Rs. 2,500 u/s 10 (2)(ii) cannot be upheld in view of

our decision in C.R.P. No. 602 of 1939., The liability which the petitioner seeks to cale down is not the liability to her vendors, in respect of which

the charge is provided, but the liability to the mortgagee.

The plaintiff-respondent has, however, sought to resist the scaling down on the basis that the decree is a compromise decree under which for the

first time a direct liability is placed upon the purchaser. We are unable to see how the fact that the decree is on a compromise can affect the

position of the petitioner having regard to the facts of the case. We have held in C.R.P. No. 2010 of 1939 that when it can be shown that the

liability tinder the compromise is a renewal of a pre-existing liability to the same creditor, the debt must be scaled down u/s 8 (if this section

applies) on the basis of the principal amount originally advanced together with the amount of any subsequent advances. There is no difficulty on the

present facts in holding that the whole of the liability under the compromise was nothing else than a renewal of the previous mortgage liability.

Provided that this debt was the debt of an agriculturist, the liability is one which must be deemed to be a liability of the purchaser which he, being

an agriculturist, can seek to scale down as against the mortgagee. (Vide Perianna Goundan Vs. Sellappa Goundan and Others, .)

There has been some discussion before us of the question whether the fact that the purchaser is under a liability which can be traced back to the

liability under the mortgage, makes available to the purchaser the plea which would be open to the original mortgagors that the mortgage debt is

itself a renewal of an earlier debt. The question is not free from difficulty and we have been referred to no previous decision directly covering this

question. But the judgment of. Varadachariar, J., in Perianna Goundan Vs. Sellappa Goundan and Others, assumes that an heir-at-law is under the

same liability as the person to whom he inherits and is entitled to the same remedy under the Act and the learned Judge treats the purchaser of

mortgaged property as under the same liability as his vendor. It would appear to follow that if the debt for which the purchaser is liable is

essentially the same debt as the debt of the original mortgagor and the latter debt is a renewal, of an earlier debt in favour of the same creditor, the

purchaser will be entitled to claim that the liability which he has incurred is a renewal and that the principal must be the principal originally advanced

together with the amounts subsequently advanced as principal. We must point out that this is not a case of a novatio by a different debtor such as

we had before us in C.R.P. No. 223 of 1939. The compromise is a renewal of the pre-existing liability of the purchaser, which liability is traceable

to the mortgage debt, which debt is itself a renewal. We are of opinion that when both the mortgagor and the purchaser are agriculturists, the

purchaser can claim to have the. debt scaled down on the basis that the mortgage debt for which he became liable is itself a renewal of an earlier

debt in favour of the same creditor. The plaintiff-respondent has contended1 that by reason of Section 11, the costs of execution can be recovered

in addition to the amount recoverable under the provisions of Sections 8 and 9. We are of opinion that the provisions of Section, 11, like those of

Section 19, relate only to costs as decreed and do not cover costs of execution.

In the result the petition is allowed with costs as against the plaintiff-respondent and the application is remanded to the lower Court for fresh

disposal in the light of this judgment.