K. Hutchi Gowder v. Richobdas Fathaimull and Company
SUBBA RAO, J .-This appeal by certificate raises the Subba Rao I.
question whether a decree obtained in a suit to enforce a
debt incurred after the Madras Agriculturists Relief Act.
1938 (Act 4 of 1938), hereinafter called the Parent Act.
came into force could be scaled down under s. 13 of the
Parent Act.
The facts are as follows: On February 15, 1964, the
appellant and 4 others executed a mortgage deed in favour
of Kaverlal Chordia for a sum of Rs. 2,00,000 payable
after three years with interest at 9 per cent. per annum. On
I anuary 24, 1946, the mortgagee assigned the said mortgage
308 SUPREME COURT REPORTS
1964 in favour of the respondent. Certain payments towards
K. Hutchi principal and interest were made ·thereunder. On Feb-
Gowder ruary 28, 1950, the assignee-mortgagee i.e., the respondent,
Richobd;; Fathai- filed a suit, O.S. No. 55 of 1950, in the Court of the Sub
mull and Co. ordinate Judge, Nilgiris, Ootacamund, for the recovery of
Subba Rao 1. Rs. 1,98,487-8-0, made up of Rs. 1,50,000 for the balance
of the principal and Rs. 48,487-8-0 for interest due on the
mortgage. The suit ended in a compromise dated Decem
ber 21, 1950, under which a decree was passed for
Rs. 1,50,000 on account of principal, with interest and
further interest at 9 per cent. per annum and costs, subject
to some concessions being shown in the event of payments
being made in certain specified instalments. Thereafter,
certain payments were made towards the decree. In due
course the respondent filed I.A. No. 382 of 1953 for the
passing of a final decree. On June 24, 1955, the appellant
filed O.P. No. 24 of 1955 for scaling down the debt. The
respondent, inter alia, contended in his objections filed
against the said application that as the debt sought to be
scaled down was incurred subsequent to March 22. 1938.
which is the date of the commencement of the Parent Act.
the decree could not be scaled down under s. 19(2) of the
Parent Act. The learned Subordinate Judge overruled the
objection and held by his order dated August 10, 1956.
that the decree was liable to be scaled down in tenns of
s. 13 of the Parent Act. He accordingly scaled down the
decree debt. On appeal, a Division Bench of the Madras
High Court held that as the statutory right to have the in
terest scaled down was not put forward before the consent
decree was passed, the decree could not be scaled down at the
stage of the final decree proceedings. It further held that
s. 19 ( 2) of the Parent Act only applied to debts payable
at the commencement of the said Act and. therefore, the
application for scaling down the decree was not maintain
able. In the result it set aside the order of the Subordinate
Judge and dismissed the petition for scaling down the debt.
Hence the present appeal.
Mr. A. V. Viswanatha Sastri. learned counsel for the
appellant, did not press the appellant's claim under s. 19(2)
of the Parent Act, but put it under s. 13 of the said Act.
8 S.C.R. SUPREME COURT REPORTS
He tcok ms through the relevant provisions of the Parent 1964
Act, which according to him disclose theJegislative policy K. Hutchi
undermining the sacrosanctity of decrees and pressed on us Cowder
to hold, on 'a scrutiny of the provisions of s. 13, of the Richobd;; Farha/
Parent Act in the light of the said policy, that'the decree mull and Co.
made in resp~~t of a debt incurred after the Parent Act subba Rao J.
came into force was liable to be scaled down thereunder.
Mr. Pathak, learned -counsel for the respondent, makes
a distinction between the substantive and procedural ·pro
visions and contends that the Parent Act does not make any
provision for scaling down decrees made in respect-of debts
incurred after the said Act came into force. The general
scheme of the Parent Act gathered therefrom may be briefly
,stated thus. The main object of the P~rent Act was to give -
reHef to agriculturists. - "Debt" has been defined in
s. 3 (iiiJ of the Parent Act as 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. This definition is rather com
prehensive; it takes in secured, unsecured and decree debts
due from an agriculturist. Section 7 of the Parent Act
declares that a debt so defined has to be scaled down in the
manner prescribed by the said Act. Section 8 provides the
mode of scaling down debts incurred before 1932 and s. 9,
the debts incurred after 1932 but before March 22. 1938; -
and s. 13 deals with the scaling down of debts incurred
after the commencement_ of the Parent Act. The relief
granted under the said Act varies with the date-of the debt
depending upon whether it falls under one or other of the
said three periods. While ss. 7, 8, !I and 13 give the
principles for scaling down a debt, s. 19 provides the
machinery for scaling down. Section 19 of the Parent
Act. as amended in 1948, reads:
" ( 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 anv
judgment-debtJr who is an agriculturist. .••.•
apply the provisions of this Act to such decree
1964
K. Hutchi
Gowder
v.
~ichobdas Fathai
mull and Co.
Subba Rao J.
310 SUPREME COURT REPORTS
and shall, notwithstanding anything contained
in the Code of Civil Procedure, 1908, amena
the decree accordingly ·or enter satisfaction.
as the case may be:
(2) The provisions of sub-section ( 1) shall also
apply to cases where, after the commence
ment of this Act, a Court has passed a decree
for the repayment of a debt payable at such
commencement." ·
It may be mentioned that the second clause was mser
ted by the Amending Act of 1948. Before the amend
ment there was a conflict of view on the question whether
s. 19 ( 1) could be invoked in amending a decree passed
after the commencement of the Parent Act in respect of a
debt incurred before the said Act. Sub-section ( 2) made
the position clear and declared that it could be done. The
position, therefore, is that in the case of debts other than
decree-debts, the scaling down process will have to be re
sorted to in an appropriate proceeding taken in respect of
the debt and in the case of decrees in respect of debts in
curred before the Parent Act whether made before or after
the said Act, by filing an application under s. 19(1) or
( 2) of the Board Act, as the case may be. But s. 19 on
its express terms does . not permit the filing of an applica
tion for amending a decree by scaling down a debt incur
red after the Parent Act came into force. Doubtless, as
Mr. Viswanatha Sastri contents, the Parent Act, to some
extent, undermines the sanctity of decrees, but that is to
implement the policy of the LegiSlature to give relief to
al(riculturists over burdened with debts. But a Court,
p;rticularly in the case of an expropriatory measure like
the Act, cannot rely upon the supposed policy of the Legis
lature and extend the scope of the relief given to agricultu
rists by analogy. The scope of the relief shall necessarily
be confined to that given by the Act expressly or by neces
sary implication. A fair reading of sub-sections ( 1) and
(2) of s. 19 of the Parent Act disclose beyond any reason
able doubt that the Legislature does not provide there
under any machinery for reopening a decree made in res
pect of a debt incurred after the Act came into force.
'
8 S.C.R. SUPREME COURT REPORTS 311
'· Realizing this difficulty; Mr .. Viswanatha Sastri relied 1964 .
. upon the provisions of s, f3 itself and contends .that the x. Hutchi
Jaid section. provides, in the case of debts incurred after · Gowder
"· the Parent .Act came into ·rorce, both for the substantive Richobdas Fathai-
re!ief as well as for the machinery to give the .said relief. mull and Co.
The said section re ,c'.0 : Subba Rao J.
"In any proceeding for recovery of a debt, the
Court shall scale down all interest due on any
debt incurred by an agriculturist after the
co=encement of this Act, so as not to ex
ceed a sum calculated at 61 per cent. per
·annum, simple interest ..•......... "
The Government by notification reduced the· rates of
interest to 5! per cent. per annum with effect from.July
29, 1947. Let us scrutinize the provisions of the section
!n the light of the arguments advanced.
Learned counsel asks us to read the words "decree
. debt" instead of "debt" in s. 13 of the Parent Act, for
"debt" is defined to take in a decree debt, and by so read
ing, he contends, in any proceeding, which, according to
him, includes a final de.cree application, the court shall
scale down all interest in the manner prescribed there
under.· It is further argued that final decree proceedings
are only proceedings in a suit and, therefore, the word
wrecovery" in the sub-section is appropriate in the context
of a decree debt. This argument, if accepted, disturbs the
entire scheme of the Parent Act. Section 13 is one of the
group of sections viz., ss. 8, 9 and 13, dealing with the
principles of scaling down in a proceeding for the recovery
of a debt. But where a decree is to be amended, the Act
has taken care to provide expressly for the amendment of
the deeree. If the Legislature intended to provide for the
amendment of decrees even in cases falling under s. 13, it
would. have added another appropriate clause in s. 19.
The absence of anv such clause indicates an intention that
in cases of . debts comprehended . by s. 13. the Legislature
gives only a limited relief expressly provided thereunder .. ·
It is said, so far as the reopening of decrees after the Parent
Act came into force is· concerned, whether in respect of
312 . SUPREl\IE COURT REPORTS
1964 debts incurred before or after th~ sale! Act, th"re cannot
K. Hutchi possibly be a justification for a difference in the manner of
Gowder their treatment. A plausible reason can be discerned for
Richobd:; Fathi- this legislative distinction oetween debts incurred. before the
mull and Co.. Ac( and those incurred after the Act; for, in the former
Subba Rao J. when the debts were incurred the Act was not in existence
and, as the debtors Could not have anticipated the provisions
of the Act, they were given the summary remedy, but the
agriculturists who incurred debtS after, the Parent Act, with
open eyes were denied the saine; while in the former, they
were allowed to reopen decrees made in respect of the said
debts before or after .the Act, in the latter they could claim.
relief only in an appropriate proceeding before the decree
was made and that too was confined to the limited relief
in regard to the rate of interest provided thereunder. The
difference in the treatment of the two categories of decrees
was brought about by sub-section (2) of s. 19 a oded by
a later amendment. Whatever may be the reason for the
difference, we cannot extend the scope of s. 13 by analogy
or by stretching the meaning of the words "proceeding"
and "recovery". . , ·
Reliance is placed upon s. 13-A of the Parent Act.
which reads:
"Wher~ a debt is incurred by a reason who would
be" an agriculturist as defined in section 3(ii)
but for the operation of proviso (B) or pro
viso (C) to that section. the rate of interest
applicable to the debt shall be the rate appli·
cable to it under the law. custom. contract or
decree of Court' under which the debt arises
or the rate applicable to an agriculturist under
section 13, whichever rate is less."
On the basis of this section a contention is raised that
~s. 13 and 13A relate to the same subject-matter with th~
difference tliat while s. 13 applies to a~culturists who
incurred debts after the Parent Act came into force. s. 13 A
applies to persons who would be agriculturists but for th~
provisos (B) and ( C) of s. 3 (ii) in respect of debts in
curred after the Act. and as a fair reading of s. 13-A indi
cates that it applies to decrees made in regard to debts in-
.t> S.C.R. SUPREME COURT REP01{TS 313
curred after the Act, it must be interpreted reasonably that 1964
s. 13 also applies to such decrees. Mr. Pathak, learned K. Hutchi
counsel for the respondent, on the other hand, contends Goll'der
that s. 13-A only applies to pre-Act debts, as s. 7 which Richobd;.; Fath<
declares the scheme of scaling down of debts applies only mull and Co.
to pre-Act debts and the only exception to it is s. 13-A. Subba Rao J.
Be that as it may, we cannot construe s. 13 with the aid of
s. 13-A which was introduced by the Amending Act 23 of
1948. This appeal .does not call for an interpretation of
s. 13-A of the Act and we shall not express any opinion
thereon.
The legal position may be briefly stated thus. Section
7, 8, 9 and 13 form a group of sections providing the
principles of scaling down of debt• incurred by agricul
mrists under different situations. A debt can be scaled
Clown 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 (2) prescribe a special procedure
ror reopening the decree only in respect of debts incurred
before the Parent Act. The Parent Act does not provide
for the reopening of decrees made in respect of debts in
curred 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.
For the foregoing reasons, we hold that the order o!
the High Court is correct. In the result, the appeal fails
and is dismissed with costs.
Appeal dismissed
AMRIT BANASPATI CO. LTD. & ANR.
v.
STA TE OF UTT AR PRADESH AND ORS.
(P. B. GAJENDRAGADKAR, C. J., M. HIDAYATULLAH, K. C.
DAS GUPTA, J. C. SHAH AND RAGHUBAR DAYAL, JJ.)
Sales Tax-Salts tax levied at the Ttltt of one anna pe1 rupr,._Nelv'
d•cimal coina~• introduad by Act No. 31 of 19SS-EQect on
calculation of 1ales ta.r-Sales tax to be levied at the rate (If one
19M
July, 27