1960 (4) TMI 86 - HC - Indian Laws

Summary

Issues Involved
1. Whether a debt incurred before 1-10-1937 is not a debt payable by an agriculturist at the commencement of the Madras Agriculturists Relief Act (22-3-1938) within the scope of Section 7.
2. Whether a deposit or other sum payable on demand is a 'debt payable by an agriculturist at the commencement of this Act' notwithstanding that the creditor has not made the demand for payment on or before 22-3-1938.
3. Whether the conditions necessary for the application of Section 19(2) to a debt in respect of which a decree has been passed are the same or different from those applicable under Section 7 of the Act.

Issue-Wise Detailed Analysis

Issue 1: Debt Incurred Before 1-10-1937
The Court examined whether a debt incurred before 1-10-1937 qualifies as a 'debt payable by an agriculturist at the commencement of the Act' if the due date for payment is later than 22-3-1938. The Court interpreted the phrase "all debts payable by an agriculturist at the commencement of this Act" in Section 7. It was determined that the term "payable" has both a primary and secondary meaning, i.e., owing and payable at a particular point of time. The Court concluded that all debts owing by an agriculturist at the commencement of the Act, whether or not they had become exigible, should be scaled down under Section 7 of the Act. Therefore, debts incurred before 1-10-1937, even if due after 22-3-1938, are considered within the scope of Section 7.

Issue 2: Deposit Payable on Demand
The Court addressed whether a deposit or other sum payable on demand is a 'debt payable by an agriculturist at the commencement of this Act' even if the creditor has not made the demand for payment on or before 22-3-1938. The Court referred to the statutory provisions and the interpretation of the term "payable." It was held that the term "payable" in the context of Sections 7 and 19(2) of the Act means "owing" and not necessarily "exigible." The Court concluded that deposits payable on demand are considered debts payable at the commencement of the Act, even if no demand was made before 22-3-1938.

Issue 3: Conditions for Application of Section 19(2)
Although both parties agreed that question No. 3 did not arise separately for consideration, the Court still examined the conditions necessary for applying Section 19(2) to a debt in respect of which a decree has been passed. It was established that Section 19(2) was introduced to enable Courts to scale down decrees passed after the Act came into force. The expression "a debt payable at such commencement" in Section 19(2) refers back to the category of debts indicated in Section 7 and does not introduce a new classification of debts. Therefore, the conditions for the application of Section 19(2) are aligned with those under Section 7.

Conclusion and Orders
The Court concluded that the interpretation of "payable" should be in its primary sense of "owing." The Full Bench answered questions 1 and 2 in the affirmative, thereby overruling the earlier decision in AIR1960Mad207 (FB).

Upon return of the answers, it was determined that Section 8(1) of the Act applies to the instant case, not Section 8(2), because the firm and the partners were not agriculturists. The original principal amount was Rs. 10824-3-3, with the defendant's 3/8th share being Rs. 4059.07 np. Interest at the Rangoon nadappu bank rate from 1-10-1937 to 1-4-1960 (3%) was added, making the total amount due Rs. 6799.55 np. Costs already granted to the respondent and costs of the Supreme Court and Full Bench were also included.

A decree was issued in these terms in C.M.A. No. 721 of 1952, which also governed A.S. No. 254 of 1946, with costs granted to the plaintiffs standing as is.