Vythilingam Chettiar vs Rangaswami Padayachi

Sathiadev, J.—Defendant in An unregistered suit (S.R. No. 43243 of 1979) on the file of the District Munsif''s Court; Vridhachalam, is the

petitioner herein. Respondent-plaintiff filed a suit for recovery of a sum of Rs. 2600 being the one-half of the principal and interest due on a

promissory note dt. 2-6-1974, executed by the defendant for Rs. 4000, payable with interest at 6 per cent per annum, Plaintiff filed O.S.738 of

1979 in the same court for recovery of a sum of Rs. 2514 towards one-half of the principal and interest due on the above promissory note under

Tamil Nadu Act 40 of 1978, then in force, and got a decree on 20-6-1979. The said decree had not been executed and satisfied in full. After

coming into force of Tamil Nadu Act 40 of 1979, he has filed the present suit for recovery of the amount, which is permissible under Tamil Nadu

Act 40 of 1979. Learned District Munsif by order dt. 30-9-1980 held that the plaintiff could file only one suit on the basis of one cause of action,

and as it had been already exhausted in the previous suit in O.S. 738 of 1979, he cannot maintain a second suit and hence rejected the plaint.

Plaintiff preferred A.S. 92 of 1980 before the Sub-Court, Chidambaram, which was later on taken on the file of the Sub-Court, Vriddhachalam,

as A.S.153 of 1981. Learned Sub Judge held that, before coming into force of Tamil Nadu Act 40 of 1979, plaintiff would not have been entitled

to the balance of the amount; and, therefore, on 15-7-1978, when Tamil Nadu Act 40 of 1979 was ushered in, that itself gave the necessary cause

of action in the filing of the present suit and, therefore he allowed the appeal and directed the trial court to take up the plaint on its file and dispose

it of according to law. It is against the said decision, this revision petition is preferred claiming that the present suit filed is not maintainable.

When the revision petition was taken up for hearing on 24-7-1986, learned Judge, after referring to the conflicting views expressed in more than

one judgment of this court, had referred the matter for being decided by a Division Bench for the reasons stated in the order.

Mr. N. Vanthinathan, learned counsel for defendant, submits that in respect of a promissory note, there could be only one cause of action and a

suit having been already instituted and a decree obtained thereon, based on Section 7(2)(i) of Tamil Nadu Act 40 of 1978, the debt due under the

promissory note for the balance of the amount having been held in law as wholly discharged, there was no debt available for being proceeded

against under Tamil Nadu Act 40 of 1979. In spite of repeal of Tamil Nadu Act 40 of 1978, u/s 31 of Tamil Nadu Act 40 of 1979, except for

Section 29 thereof, nothing in law survives to be proceeded against under Tamil Nadu Act 40 of 1979, and there being no cause of action existing,

the present suit filed one non-existing debt is not maintainable, and, when a portion of the debt statutorily having been declared as deemed to have

been wholly discharged under Tamil Nadu Act 40 of 1979, and, there being no specific provision made to create debts in favour of creditors,

based on the original promissory note, mere repealing of Act 40 of 1978 had not resulted in bringing into existence a debt which had been wiped

out under a prior enactment. Plaintiff having availed of the benefits under the earlier enactment, and subjected himself to the restraint contained

therein and having thereby lost his right to the portion of the amount now claimed, repealing of the earlier enactment has not resulted in restoration

of this scaled down debt. No reservation having been ever made in the earlier suit for the amount which could not be then sued, plaintiff is

estopped from filing the present suit. In any event, a statutorily wiped out debt consequent to plaintiff availing of remedy under the earlier

enactment, cannot be claimed under Tamil Nadu Act 40 of 1979, which had nowhere provided for revival of statutory discharged debt Hence, the

present suit is misconceived, in the eye of law.

Tamil Nadu Act 40 of 1978 came into force on 15-7-i978. u/s 6(1) all debts payable by any debt or on the 14th day of July 1978, have to be

scaled down in accordance with the provisions of Chap. II of that Act.

Section 7 dealt with scaling down of debts. Hence by availing of the provisions of the said Act, O.S.738 of 1979 was filed by the plaintiff based on

the promissory note dt. 2-6-1974, and he obtained a decree on 20-6-1979. Thereafter, on 15-7-1979, Tamil Nadu Act 40 of 1979 came into

force and Section 7 therein deals with scaling down of debts. u/s 31, Tamil Nadu Act 40 of 1978 was repealed, except for Section 29 thereof,

which dealt with Amendment of Tamil Nadu Act XXIII of 1943.

The crucial section to resolve the point involved is Section 33 of Tamil Nadu Act 40 of 1979, which is extracted hereunder : --

Removal of doubts : (1) Any liability incurred or arising under any debt due from a debtor shall be deemed never to have been discharged

under the said Act, as if the said Act was not passed and every such debt shall be scaled down in accordance with the provisions of this Act; (2)

Nothing contained in this section shall be deemed to invalidate any proceeding in which the order passed has been executed or satisfied in full

before the date of the publication of this Act in the Tamil Nadu Government Gazette.

On the earlier enactment being repealed, and as to what extent the repeal of the Act could operate on the debts which are covered by later

enactment, u/s 33( 1), it had been made clear that except for the limited category which would fall within the four corners of Section 33(2), in

respect of any other debt due from a debtor, it continues to exist, because, in relation tossuch debts, it will be dealt with as if Tamil Nadu Act 40 of

1978 had not been ever enacted. Section 7 which deals with the scaling down refers to all debts payable by any debtor on 14th July 1978, which

was the crucial date even for Tamil Nadu Act 40 of 1979. Therefore, the intention of the Legislature was to deal with under Tamil Nadu Act 1979

the debts which are covered by Tamil Nadu Act 1978, and provide for different kinds of scaling down, except in such of those cases where by

availing of the earlier enactment of 1978, order had been secured and full satisfaction had been obtained. The purport of Section 31 of Tamil

Nadu.

Act 40 of 1979 in repealing Tamil Nadu Act 40 of 1978 is to superimpose 1979 Act over the debts which were covered by 1978 Act and efface

that Act from the statute book and occupy the field. It was dealt with by way of substitution only in respect of such of those debts which had

remained unsatisfied, Decrees obtained under, the earlier, enactment and which have been fully satisfied, have not been declared as invalid,

inoperative or illegal.

Under the 1978 Act, only a portion of the debt having been declared by law as available for realisation; the cause of action under the promissory

note got split up, and only on the permissible cause of action the earlier suit having been laid; and later on by operation of law, the statutorily

discharged cause of action having been restored by statute; the subsequent suit could be instituted for recovery of such of the amount which if

permissible of recovery under 1979 Act, after giving credit to the decree already obtained under the law then in force; In the instant case, it is

stated by Mr. K. Ramamurthi, learned counsel for the plaintiff-respondent, that on 23-11-1979, a satisfaction was recorded stating therein that it

would be without prejudice to Tamil Nadu Act 40 of 1979,and, thereafter on 4-12-1979, the present suit was filed. Hence, in view of Section

33(1) of 1979 Act, the statutorily restored debt relating to the original debt recognised under the said Act could be pursued with by the creditor,

as if 1978 Act had not been passed after giving credit to whatever decree that had been secured in a court proceeding, by virtue of the repealed

Act. Hence, the second suit filed is maintainable. This would suffice to answer the reference.

There is no need for this Division Bench to refer to the various provisions of the two enactments, in the light of the considered decision rendered

by Ratnam J, in Lakshminarayan Reddiar Vs. T.K.S. Balarama Chettiar, . Regarding the scope of the various other sections in the two Acts, it is

unnecessary to deal with the point any further, because the learned Judge had rightly concluded that the right to recover one-half of the principal

and one-half of the interest thereon was restored under 1979 Act, and it was'' also preserved intact against the bar of limitation u/s 34 of the said

Act, so that that right could be enforced without in any manner being affected by the provisions of Tamil Nadu Act 40 of 1978.

In Rama Reddiar Vs. Raja Reddiar, , it was held that in all cases where the debt or the decree had not been Fully and finally discharged or

satisfied under 1978 Act, then the application for scaling down of such debt or decree can be made under 1979 Act. It was further held that the

bar u/s 33(2) will not operate and that decree-holder would have the right to have the decree amended u/s 16 of the Act.

In Duraiswami Pradayachi and Another Vs. Thangavel Padayachi, , it was held that, as the earlier suit under 1978 Act had been filed only for

the amount which could be claimed under the said Act, and it having been decreed in full; the decree-holder is not entitled to further claim that,

under 1979 Act, he is entitled to enlarge the scope of the suit itself because the amount claimed would be beyond the suit claim, and, therefore,

Section 16 will have no application for such a suit claim.

In S. Karuppanna Gounder Vs. S. Ramaswamy, it was held that the debt due under the promissory note is one and entire and it is not possible

to split it up into two and file two separate suits for the same debt, and, that Order 2, Rule 2, C.P.C. would also apply, and that a repeal of a

statutory provision does not affect the previous operation of those provisions unless the statute specifically says that the repealed provision should

be taken to have been not in the statute book at all. Section 33( 1) of Tamil Nadu Act 40 of 1979 having been enacted to remove any doubt that

could exist on this aspect and as pointed out in Lakshminarayan Reddiar Vs. T.K.S. Balarama Chettiar, since Order 2 Rule 2 C.P.C. would have

no application to a matter of this nature; the approach made by the learned Judge in S. Karuppanna Gounder Vs. S. Ramaswamy, cannot be

approved.

In Lakshmana Perumal Naicker Vs. Narayanaswami Naicker, it was held as follows.--

A careful reading of Sub-section(2) above shows that the provisions of Act 40 of 1979 do not in any way affect the earlier proceeding.

On considering the terms of the receipt passed by counsel for plaintiff therein, it was interpreted to reflect a full satisfaction having been entered into

in relation to the promissory note debt.

It is surprising to note that Mr. R. S. Venkatachari, learned counsel, who is reputed to placeevery conceivable decision on a point, whether

reported or not, having argued the case in Lakshminarayan Reddiar Vs. T.K.S. Balarama Chettiar, , none of the decisions which have been

rendered earlier had been referred to in that decision and the solitary decision which had found a place therein is Muthuveerappa Chetti v.

Adaikappa Chetti 39 MLJ 312 : ILR 43 Mad 845 : AIR 1920 Mad 663 which dealt with the aspect of annulment.

On the opinion already rendered, the analysis and the reasonings found in Lakshminarayan Reddiar Vs. T.K.S. Balarama Chettiar, , finds

approval of this Division Bench; and, therefore, in spite of an earlier suit having been filed by availing of the remedy conceived of under Tamil Nadu

Act 40 of 1978, if a decree obtained therein had not been satisfied in full, on or before 15-7-1978, then such a decree holder is entitled to file

another suit for the balance of the amount which could be recovered under Tamil Nadu Act 40 of 1979.

Hence, the decisions rendered in Duraiswami Pradayachi and Another Vs. Thangavel Padayachi, , S. Karuppanna Gounder Vs. S.

Ramaswamy, and Lakshmana Perumal Naicker Vs. Narayanaswami Naicker, are hereby overruled. The decisions in Rama Reddiar Vs. Raja

Reddiar, and Lakshminarayan Reddiar Vs. T.K.S. Balarama Chettiar, are hereby approved and the reference is accordingly answered.