Joshi Girjadharji vs Lachmanji Panth

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1952 Supreme(SC) 33

SUPREME COURT OF INDIA
25th April 1952.
M. PATANJALI SASTRI C.J.I., FAZL ALI, B.K. MUKHERJEA AND S.R. DAS JJ.
Joshi Girjadharji and another, Appellants
Versus
Lachmanji Panth and others, Respondents.
Civil Appeal No. 64 of 1951.
Advocates appeared
Shri Gopi Nath Kunzru, Senior Advocate, (Shri K. B. Asthana, Advocate, with him,) instructed by Shri C. P. Lal, Agent for Appellants; Shri Krishna Shankar, Advocate, instructed by Shri Naunit Lal Agent, for Respondents.

Advocates:
C.P.LAL, Gopi Nath Kunzru, K.B.ASTHANA, Krishna Shankar, NAUNIT LAL

Headnote:U.P. Debt Redemption Act (XIII of 1940), Ss. 2(3) (b), 2 (9), 8, 21-Meaning of " loan" and" suit to which Act applies "-Decree on mortgage-Person not agriculturist when advance is blade- Whether entitled to relief.
       A mortgage was executed by several persons on the 28th July, 1913.
       The term of the mortgage, namely six years, expired in July 1937. The mortgagees instituted a suit in May 1938 and a decree was passed in March 1939. An application for relief under the D.P. Debt Redemption Act (XIII of 1940) was made on 11th April, 1942, and this application was registered on the ground that S, one of the mortgagors, had been assessed to income-tax and was therefore not an agriculturist, and the suit was not consequently "a suit to which the Act applied." The evidence showed that S was earning a monthly salary of Rs. 90 and that from February 1932 he had been assessed to income-tax till the year 1936. The High Court held, relying on the full Bench ruling Ketki Kunwar v. Ram Saroop, (I.L.R. 1943 AIL 35), the under Sec. 21 of the Act the mortgage money could be recovered only from the mortgaged property and not personally and that the proviso to Sec. 2(9) of the Act had therefore no application
       1363 and the question whether S was an agriculturist on the date of the mortgage was immaterial. As S was admittedly an agriculturist on the date of the suit, the High Court held that the judgment-debtors were entitled to relief under the Act. On appeal
       Held: That, assuming that the proviso to Sec. 2(9) applied and that in order to be a "loan" within the meaning of the Act it must be shown that the advance was made to one who at the date of advance was an agriculturist, S was not an agriculturist on the 28th July, 1931, as the Indian Finance (Supplementary and Extending) Act of 1931 which reduced the taxable minimum from Rs. 2,000 to Rs. 1,000 was passed only in Nov. ember, 1931 and income-tax was first deducted from his salary only in February, 1932.

Judgment

DAS J. : This appeal arises out of an application by five out of ten judgment-debtors made under Section 8 of the U. P. Debt Redemption Act (No. XIII of 1940 for ascertaining the amount due by them in accordance with the provisions of Ss. 9 and 10 of that Act and for amending the decree passed on March 31, 1939 by the Additional Civil Judge, Banaras, in O .S. No. 33 of 1938. The facts material for the purposes of this appeal may now be briefly stated.

2. By a mortgage deed executed on June 22, 1922, Madho Ram, Sita Ram, Jai Ram and Lakshman all sons of Pandit Raja Ram Pant Sess mortgaged certain immovable properties in favour of Damodarji, son of Kanta Nathji, owner of the Kothi Joshi Shivanath Vishwanath for the due repayment of the sum of Rs. 8,000 advanced on that date by a cheque together with interest thereon at 12 annas per cent. per mensem with quarterly rests. On July 28, 1931 the said mortgagors and their sons executed a mortgage over the same properties in favour of Kothi Kamta Nathji Vishwanathji for the due repayment of Rs. 8,000 with interest thereon at twelve annas per cent per mensem with quarterly rests. It is recited in the deed that the sum of Rs. 8000 was advanced on this date by a cheque and that the amount was utilised in paying up the amount due under the earlier mortgage deed to Damodarji proprietor of Kothi Shivanath Vishwanath.

3. In 1935 the U. P. Agriculturists Relief Act (No. XXVII of 1934) came into force. On May 19, 1938 Girjadharji son of Damodarji and Murlidharji minor sons of Gangadjarji who was another son of Damodarji filed suit No. 33 of 1938 in the Court of the Additional Civil Judge, Banaras, against the mortgagors and their sons, for the recovery of Rs. 9,477-2-0 due as principal and interest up to date of suit and for further interest under the mortgage deed of July 28, 1931. It appears from the judgment of the High Court under appeal that in their written statement the mortgagors claimed the benefit of the U. P. Agriculturists Relief Act (No. XXVII of 1934). The plaintiffs contended that the mortgagors were members of a joint Hindu family and as Sita Ram one of the mortgagors was assessed to income-tax the mortgagors were not agriculturists as defined in S. 2(2) of that Act and, therefore, could not claim the benefit conferred on the agriculturists by that Act. The trial Court, by its judgment dated March 31, 1939 held that though Sita Ram was assessed to income-tax for the year 1931-32, the amount of such income-tax did not exceed the amount of cess payable on the land held by him and consequently the second proviso to Section 2 (2) did not apply to him and he was, therefore, an agriculturist and as the other mortgagors were also agriculturists all of them were entitled to the benefits under the Act. Accordingly, after scaling down the interest, a sum of Rs. 9,497-14-1 was declared to be due for principal, interest and costs up to March 31, 1939 and a preliminary mortgage decree for sale was passed in that suit.

4. In 1940 the U. P. Debt Redemption Act (No. XIII of 1940) came into force. On April 11, 1942 five of the judgment-debtors made an application under Section 8 of this Act before the Additional Civil Judge, Banaras, who passed the decree. In the petition it was stated that the debt was actually advanced in 1922, that the petitioners were agriculturists within the meaning of Act XIII of 1940, that the decree-holders can only get interest at the reduced rate of Rs. 4-8-0 per cent. per annum from 1922, and that after adjustment of accounts nothing will be found outstanding against the petitioners. The prayer was that an account of the money-lending business be made from the beginning of 1922 & the decree in suit No. 33 of 1938 be modified by reducing the amount due thereunder. The decree-holders filed a petition of objection asserting, inter alia , that the petitioners were by no means agriculturists, that they and the respondents Nos. 3 to 7 were members of a joint Hindu