Full Judgment Text
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PETITIONER:
P. S. L. RAMANATHAN CHETTIAR & ORS.
Vs.
RESPONDENT:
O. RM. P. RM. RAMANATHAN CHETTIAR
DATE OF JUDGMENT:
04/03/1968
BENCH:
MITTER, G.K.
BENCH:
MITTER, G.K.
SHAH, J.C.
RAMASWAMI, V.
CITATION:
1968 AIR 1047 1968 SCR (3) 367
ACT:
Madras Agriculturists Relief Act IV of 1938, ss. 3(iii) and
19(2); If relief by way of scaling down of decree available
in case of a deposit Whether ’deposit’ a ’debt’ within the
meaning of s. 3(iii)-Deposit in court pending, appeal-
Whether amounts to satisfaction of decree within s. 16(iii)
of Madras Act 23 of 1948-If decree-holder can claim interest
after date of deposit in court.
HEADNOTE:
The respondent’s ’father made a deposit of Rs. 5,000 with
the appellant’s father in 1926 which was repayable with
interest. A demand wag made for repayment in 1944 and a
suit for recovery decreed in 1946 for Rs. 11,459. The High
Court confirmed the decree- in appeal in September 1951 and
thereafter the appellants father deposited Rs. 11,098 to
obtain a stay of execution of the decree.
Although the judgment-debtors had made no attempt in the
trial court or before the appeal court to take any advantage
of the provisions of the Madras Agriculturists Relief Act IV
of 1938 on execution proceedings being commenced they filed
an application under the Act for scaling down the decree
under s. 19(2). The Subordinate Judge who heard the
application rejected certain objections raised by the decree
holder and modified the decree. The High Court in appeal,
reversed the order of the Sub-Judge holding that the money
entrusted to the plaintiffs’ father being a deposit with a
banker was not payable until there was a demand for it: the
money became payable only on 2nd October, 1944 i.e. after
the coming into force of Act IV of 1938 and consequently the
provisions of s. 19(2) of the Act were not applicable and
the decree was not liable to be scaled down.
In the appeal to this Court it was also contended on behalf
of the respondent that the, word "debt" implied a pre-
existing loan and as such it could not apply to a deposit;
and furthermore that the decree had already been satisfied
and as such s. 16(3) of Madras Act XXIII of 1948 was
applicable.
HELD : The appeal must be allowed and the order of the
subordinate Judge scaling down the decree upheld.
(i) The definition of "debt" in s. 3(iii) of the Act is of
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a very wide import and would include any liability of an
agriculturist with the exceptions specified Section 4
specifies and takes out of the ambit of the definition
various liabilities and impositions on the agriculturist.
If therefore there is a liability of an agriculturist not in
terms excepted by sec. 3(iii) or sec. 4 of the Act, it would
be a ’debt’ within the meaning of the definition given in s.
3(iii). There can be no doubt that on a deposit being made,
the deposited incurred a liability although the time for
repayment would come only when a demand was made and the
cause of action for the suit would arise on such a demand..
[370 H; 371 D-E]
Narayanan Chettiar v. Annamalai Chettiar. [1959] Supp. 1
S.C.R. 237 and Kesoram Industries v. Commissioner of Wealth
Tax, [1966] 2 S.C.R. 688, referred to.
368
(ii) The definition in s. 3(iii) clearly negatives the
respondent’s contention that the word "debt" implied a pre-
existing loan and could not apply to a deposit. If loans
alone were meant to be covered by the use of the word
’debt’. there was no reason to exclude rent from the purview
of the expression. In that case there would have been no
need to mention expressly revenue, tax or cess or liability
arising out of a breach of trust or in respect of
"Maintenance under a decree of court or otherwise" in s. 4.
[371 E-F]
(iii) The fact of a judgment-debtor’s depositing a sum
in court to purchase peace by way of stay of execution of
the decree on terms that the decree-holder can draw it out
on furnishing security, does not pass title to the money to
the decree-holder. He can if he likes take the money out in
terms of the & her; but so long as he does not do so, there
is nothing to prevent the judgment debtor from taking if out
by furnishing other security, say, of immovable property, if
the court allows it and on his losing the appeal putting the
decretal amount in court in terms of Order 21 rule 1 C.P.C.
in satisfaction of the decree. [373 A, B]
The real effect of the deposit of money in court as was done
in this case was to put the money beyond the reach of the
parties pending the disposal of the appeal. The decree-
,holder could only take it out on furnishing security which
means that the payment wag not in satisfaction of the decree
and such security could be proceeded against by the judgment
debtor in case of his success in the appeal. Pending the
determination of the same, it was beyond the reach of the
judgment debtor. [373 C-D]
Chowthmull Maganmull v. The Calcutta Wheat and Seeds
Association, I.L.R. 51 Calcutta 1010, distinguished.
Keshavlal v. Chandulal, 37 Bombay Law Reporter 200, referred
to.
Held also : There was no force in the content on that the
decree-holder cannot claim any amount by way of interest
after the deposit of the money in court. Ther is no
substance in this point because the deposit in this case was
not unconditional and the decree-holder was not free to
withdraw it whenever he liked even before the disposal of
the appeal. In case he wanted to do so. he had to give
security in terms of the order. The deposit was not in
terms of Order 21 rule 1 C.P.C. and’ as such, there is no
question of the stoppage of interest after the deposit. [373
F]
JUDGMENT:
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 462 of 1965.
Appeal by special leave from the judgment and order dated
August 8, 1959 of the Madras High Court in A.A.0. No. 171 of
1953.
M. S. K. Sastri and M. S. Narasimhan, for the appellants.
R. Thiagaraj an, for the respondent.
The Judgment of the Court was delivered by
Mitter, J. This is an appeal by special leave against an
order of the High Court of Madras dated August 8, 1959
reversing an order of the Subordinate Judge, Devakottai
scaling down the decree passed in O.S. No. 33 of 1945.
The facts necessary for the disposal of the appeal are as
follows. The respondent’s father made a deposit of Rs.
5,0001-
369
with the appellants’ father in 1926 repayable with interest
at Rangoon Nadappu rate. A demand was made for re-payment
on 1944 and a suit for recovery of the amount was fixed on
March 16, 1945. The trial court decreed the suit in the
year 1946 for Rs. 11,459-14-0. The appellants’ father
preferred an appeal therefrom to the High Court and pending
disposal of the same deposited Rs. 3,500/- in court on April
16, 1947. The High Court confirmed the decree on September
14, 1951. There is some dispute about the actual date but
there is no con-test that the appellants’ father deposited
Rs. 11,098-10-2 to obtain stay of execution of the decree.
On August 20, 1947 the court passed an order to the effect
that the decree-holder would be allowed to draw out the
amount on furnishing security. Although an Act styled The
Madras Agriculturists Relief Act, 1938 was passed on 22nd of
March of that year wherein provision was made for giving
relief to agriculturist debtors, inter alia, by scaling down
decrees passed against them, no attempt was made by the
defendants to take advantage thereof either in the trial
court or before the court of appeal. On execution
proceedings being commenced, the judgment-debtors filed an
application under the aforesaid Act for scaling down the
decree under s. 19(2) thereof. The decree-holder raised
various objections thereto. The Subordinate Judge who heard
the application in the first instance turned down the
contentions of the decree-holder and modified the decree.
An appeal therefrom was preferred by the decree-holder to
the Madras High Court. There being conflicting decisions in
the High Court as to whether a judgment debtor who had not
claimed relief under the Act before the passing of the
decree, could do so subsequently thereto, the appeal was
directed to be heard by a Full Bench. An appeal from
another decision of the same High Court embracing the
identical question was disposed of by this Court in
Narayanan Chettiar v. Annamalai Chettiar-(1). There after
referring to the Act of 1938 as also to s. 16 of Madras Act
XXIII of 1948 amending the Act of 1938, it was held that
"the appellant was entitled to the benefit of s. 19(2) of
the Act read with s. 16 cl. (ii), of the Amending Act."
The Full Bench of the Madras High Court constituted for the
purpose of hearing the appeal from the order of the Subordi-
nate Jude held that the lower court was competent to give
relief tinder s. 19(2) of the Act by way of scaling down the
decree passed by the High Court, and referred the matter
back for decision by a bench. The Bench decided inter alia
that the application was properly presented before the
Subordinate Judge i.e., the court which passed the decree.
it refused to go into the question as to whether the
plaintiff was an agriculturist in
(1) [1959] Supp. S.C.R. 237
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370
view of the concession before the Full Bench. It further
negatived the plea that the decree had become satisfied by
payment of money into court on July 24, 1947. It however
reversed the order of the Subordinate Judge by holding that
the money entrusted to the plaintiff’s father being a
deposit with a banker was not payable until there was a
demand for it : the money became payable only on 2nd
October, 1944 i.e. after the coming into force of Act IV of
1938 and consequently the provisions of s. 19(2) of the Act
were not applicable and that the decree was not liable to be
scaled down. The present appeal is against this order.
Section 19 of the Act which we have to
consider is set forth below:
" (1) Where before the commencement of this
Act, a court has passed a decree for the
repayment of a debt, it shall, on the
application of any judgment debtor who is an
agriculturist or in respect of a Hindu joint
family debt, on the application of any member
of the family whether or not he is the
judgment-debtor or on the application of the
decree-holder, apply the provisions of this
Act to such decree and shall, notwithstanding
anything contained in the Code of Civil
Procedure, 1908, amend the decree accordingly
or ,enter satisfaction, as the case may be:
Provided that all payments made or amounts re-
covered, whether before or after the
commencement ,of this Act, in respect of any
such decree shall first be applied in payment
of all costs as originally decreed to the
creditor.
(2) The provisions of sub-section (1) shall
also apply to cases where, after the
commencement of this Act, a court has passed a
decree for the ’repayment of a debt payable at
such commencement."
’Debt’ has been defined in S. 3(iii) of the
Act as meaning " any liability in cash or
kind, whether secured or unsecured, due from
an agriculturist, whether payable under a
decree or order of a civil or revenue court or
otherwise, but does not include rent as
defined in clause (iv), or ’kanartham’ as
defined in section 3(1)(1) of the Malabar
Tenancy Act, 1929."
It will be noted that the definition is of a very wide
import and would include any liability due from an
agriculturist with the exceptions specified. Section 4
takes out of the ambit of the definition various liabilities
and impositions on the agriculturist expressly specified
therein. If therefore there is a liability
371
of an agriculturist not in terms excepted by sec. 3(iii) or
sec. 4 of the Act it would be a ’debt’ within the meaning of
the definition given in s. 3(iii).
In Kesoram Industries v. Commissioner of Wealth Tax(1) this
Court had to consider the meaning of the expression "debts
owed by the assessee" which had to be taken into account in
computin- his net wealth in terms of s. 2(m) of the Wealth
Tax Act. One of the questions there raised was, whether the
amount of the provision for payment of income-tax and super-
tax in respect of a particular year of account was a debt
owed within the meaning of s. 2(m) and as such deductible in
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computing the net wealth of the assessee. It was held by
this Court that even though the Finance Act may be passed
later "the tax liability at the latest will arise on the
last day of the accounting year". The Court went
elaborately into the question as to the meaning of the word
’debt’ and held that it could be defined as a liability to
pay in presenting or in future an ascertainable sum of
money. As regards the meaning of the word ’owed’ it was
observed that "it did not really add to the meaning of the
word ’debt"’.
In the light of this decision there can be no doubt that on
a deposit being made, the depositee incurred a liability
although the time for repayment would come only when a
demand was made and the cause of action for the suit would
arise on such a demand.
On behalf of the respondent, it was argued that the word
’debt’ implied a pre-existing loan and as such it could not
apply to a deposit. The definition in s. 3(iii) clearly
negatives such a proposition. If loans alone were meant
to be covered by the use of the word ’debt’, there
was no reason to exclude rent from the purview of the
expression. In that case there would have been no
need to mention expressly revenue tax or cess or liability
arising out of a breach of trust or in respect of
"maintenance under a decree of court or otherwise" in s. 4.
The plea of the decree-holder which succeeded before the
High Court cannot therefore be accepted.
It was however argued that the decree had been satisfied
already and as such s. 16 cl. (iii) of Madras Act XXI[II] of
1948 was applicable. That section for our purpose runs as
follows :
"The amendments made by this Act shall apply
to the following suits and proceedings,
namely:-
(i)................................
(ii).............................
(1) [1966] 2 S.C.R. 688.
372
(iii) all suits and proceedings in which the
decree or order passed has not been executed
or satisfied in full before the commencement
of this Act
It was argued that as the full amount of the decree had been
put in court before 1948, the judgment-debtors could not
apply for scaling down thereafter. In this connection,
reliance was placed on a decision of the Calcutta High Court
in Chowthmull Maganmull v. The Calcutta Wheat and Seeds
Association(1). There. the defendant-appellant had appealed
from a decree for Rs. 21,850/- with interest and costs
passed against it and on the respondents taking steps to
execute the decree had obtained an ,order for stay of
execution thereof on depositing the said sum in court as
security to the credit of the suit. There after an order
was made adjudicating the appellants as insolvents. The
Official Assignee did not proceed with the appeal and the
respondent applied for the appeal being dismissed and the
money being paid over to them. The Official Assignee
claimed the money as belonging to the insolvents’ estate and
for the benefit of the general body of creditors. It was
held that the effect of the order of August 29, 1923
directing stay of execution on terms of a deposit being made
was that "the money was paid into Court to give security to
the plaintiff that in the event of their succeeding in the
appeal they should obtain the fruits of their success,," and
the "money which was paid into court belonged to the party
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who might be eventually found entitled to the sum." On the
other hand, there is a decision of the Bombay High Court in
Keshavlal v. Chandulal(2) where a judgment-debtor had
obtained an order for stay of execution of the decree on his
depositing the decretal amount in court. Later on the
application of the judgment debtor the deposit was invested
in Government promissory notes which appreciated in value by
the time the appeal was heard. The appeal resulted in a
small sum being disallowed from the decree whereupon the
judgment-debtor applied for a return of the investment to
him on his paying into court the amount due under the
decree. But the decree-holder claimed the securities which
represented the decretal amount at the time the deposit was
made. On behalf of the decree-holder reference was made to
the above judgment of the Calcutta High Court. There
distinguishing the Calcutta judgment, Macklin, J. said that
the amount in court "was primarily. a deposit of security
rather than a deposit of the decretal debt, and the decree-
holder cannot claim it as his own unless the judgment-debtor
fails to satisfy the decree by the payment of the money due
under the decree."
(1) I.L.R. 51 Cal. 1010.
(2) 37 1.L.R. 200.
373
On principle, it appears to us that the facts of a judgment-
debtor’s depositing a sum in court to purchase peace by way
of stay of execution of the decree on terms that the decree-
holder can draw it out on furnishing security, does not pass
title to the money to the decree-holder. He can if he likes
take the money out in terms of the order; but so long as he
does not do it, there is nothing to prevent the judgment-
debtor from taking it out by furnishing other security, say,
of immovable property,’ if the court allows him to do so and
on his losing the appeal putting the decretal amount in
court in terms of Order 21 rule 1 C.P.C. in satisfaction of
the decree.
The real effect of deposit of money in court as was done in
this case is to put the money beyond the reach of the
parties pending the disposal of the appeal. The decree-
holder could only take it out on furnishing security which
means that the payment was not in satisfaction of the decree
and the security could be proceeded against by the judgment
debtor in case of his success in the appeal. Pending The
determination of the same, it was beyond the reach of the
judgment-debtor.
The observations in. Chowthmull’s case(1) do not help the
respondent. In that case, the appeal was not proceeded with
by the Official Assignee. Consequently, the decree-holder
could not be deprived of the money which had been put into
court to obtain stay of execution of the decree as but for
the order, the decree-holder could have levied execution and
obtained satisfaction of the decree even before the disposal
of the appeal.
The last contention raised on behalf of the respondent was
that at any rate the decree-holder cannot claim any amount
by way of interest after the deposit of the money in court.
There is no substance in this point because the deposit in
this case was not unconditional and the decree-holder was
not free to withdraw it whenever he liked even before the
disposal of the appeal. In case he wanted to do so, he had
to give security in terms of the order. The deposit was not
in terms of Order 21 rule I C.P.C. and as such, there is no
question of the stoppage of interest after the deposit.
In the result, the appeal is allowed, the order of the High
Court set aside and that of the Subordinate Judge restored,
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The respondent will pay the costs of this appeal.
R.K.P.S. Appeal
allowed.
(1) 1. L.R. 51 Cal. 1010.
374