LexGAMINI KRISHNAYYA AND OTHERS versus CURZA SESHACHALAM AND OTHERS
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A GA MINI KRISHNA YY A AND OTHERS v. CURZA SESHACHALAM AND OTHERS August 31, 1964 I.I (RAGHUBAR DAYAL, J. R. MUDHOLKAR AND S. M. SIKRI JJ.) c I) £ F G Madras Agriculturists' Relief Act (4 of 1938), ss. 9(1) and B-- Debt incurred after 1st October 1932 but before commencernent of Act- Renewal after com1nencement of Act-Provision applicable. Dealings between the family of the appellants (creditors) and the family of the respondents (debtors) commenced in 1934. In September 1938, after the Madras Agriculturists' Relief Act (4 of 1938) came in!o force in March 1938, a promissory note was executed by the debtors (who are agriculturists) in favour of the creditors for the amount then found due. The debtors also agreed to pay interest at the rate of 9 i per cent per annum on that amount. In arriving at the amount due to the creditoN in 1951, the debtors contended that the debt should be scaled down under •· 9(1) of the Act, whereas the creditors contended, on the basis that it was a debt incurred after the commencement of the Act, that the only relief to which the debtors were entitled, . was calculation of interest under s. 13 of the Act. HELD : Though the transaction was entered into after the commence- ment of the Act, since the original indebtedness arose before the com- mencement of the Act but after October I, 1932, s. 9(1) of the Act would be applicahlc. [210 D] Under s. 7 of the Act every debt'payable by an agriculturist at the commencement of the Act shall be scaled down and nothing in excess L<tf the amount scaled do\vn will be recoverable; and this \\'Ould in effect operate as a discharge of the rest of the liability. Where, therefore, ~ suit is instituted for recovery of a debt f PDm an agriculturist. the court \\ill have to SCiJ.lc down the debt as provided in s. 8 if the de.:it was iocurred before 1st October, 1932. 1f the <lebt \Vas incurred afte:"" that date, the Court will have to apply the provisions of s. 9. Jn such a case, the debt incurred after the commencement of the Act will not cease to be a debt incurred after October 1, 1932, \vhcn it is a transaction in renewal of ~ liability which arose prior to the commencement of the Act. As to future interest, transactions prior to the commencement of the Act cover- ed by ss. 8 and 9, are governed by s. 12, and transactions after the commencement of the Act, by s. 13. The object o! the Legislature in enactiq.g s. 13 is only to provide for a maximum rate of interest payable by agricuUurisLc;, on dehts incurred for the fir-;t time after the corn1neacc- mcm of the Act. [200 F-G; 201 C-E: 204 C'-F]. Case law revicv.·cd. Nagabh1tslta11am v. Seetharamaiah. I.LR. [1961] I A.P. 485. approv- ed. Thiruvengadatha Ayyangar v. Sa111Jappatf Ser~·ai, I.L.R. [19~:!1 tvfad. 57, H overruled. CIVIL APPJ:LLATE JURISDICTION : Civil App~al No. 618 of 1961. 195 SUPREME COURT REPORTS (1965) l S.C.R: Appeal by special leave from the judgment and deem; dated A Dece.mber 23, 1960 of the Andhra Pradesh High Court in Second Appeal No. 653 of 1956. , K; Bhimasankaram, C. M. Rao and K. R. Sharma, for the appelfant. A. V. V. Nair and P. Ram Reddy, for respondents Nos. 2 n and 4. · :::- · The Judgment of the Court was delivered by Mudholkar J. The question that falls for decision in this appeal by special leave from the judgment of the High Court of Andhra Pradesh is whether a debtor who has executed a prom.is- C sory note after the coming into force of the Madras Agriculturists' Relief Act, 1938 (Madras Act 4 of 1938) (hereafter referred to as the Act) in renewal of a debt incurred prior to the ·com- mencement of the Act is entitled to Claim the benefit of s. 9 of the Act. The trial court upheld the debtor's contention but in appeal the Subordinate Judge rejected it and decreed the appellants' D suit in full. The High Court held that tlie interpretation placed on the relevant provisions of the Act by the Subordinate Judge was erroneous, allowed the appeal and restored the decree passed by the trial court. · Certain facts have to be stated in order to appreciate the contention! of the parties. The plaintiffs who are tlie appellants before us and tlie fourth defendant constituted a Hindu joint family of which the first plaintiff was tlie ·manager till tlie year 1944 when tlie fourth defendant separated from the rest and the remaining members continued to remain joint. On September E 14, 1938 the firs
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