Scaling down of debt as against agriculturist principal debtor.

Subba Rao, J.-This appeal arises out of the suit filed by the appellant for recovery of a sum of Rs. 5,746 with interest. Defendants 1 and 2 executed a promissory note, dated 22nd September, 1933, in favour of the plaintiff for a sum of Rs. 1,500 payable with interest at 36 per cent, per annum. Defendants 1 and 2 are brothers. Defendants 4 and 5 are the sons of the first defendant. Defendant 3 executed a letter of guarantee dated 22nd September, 1933, in favour of the plaintiff for the due payment of the amount due under the promissory note. Defen-dants 1 and 2 paid several amounts on 20th September, 1936; 10th September, 1939 and 7th September, 1942 and the payments were duly endorsed on the pro-missory note. On the same dates, the third defendant made endorsements on the letter of guarantee binding himself to pay the principal and interest due in respect of the promissory note. The learned Subordinate Judge scaled down the debt in regard to all the defendants and gave a decree for a sum of Rs. 1,500 with interest thereon at 6¼ per cent, from 1st October, 1937, till the date of payment less Rs. 55 paid. The plaintiff preferred the above appeal.

The learned counsel for the appellant contended that the lower Court should not have scaled down the decree against the third defendant, the surety. The learned Subordinate Judge held that as the third defendant renewed his liability on 10th September, 1939 and 7th September, 1942, confining it only to the amount due under the promissory note he could not be made liable for an amount higher than the amount now found due under the promissory note as scaled down. The learned counsel says that the lower Court’s construction of the renewals is contrary to the plain wording of the renewals as the third defendant undertook thereunder to pay the entire amount due under the promissory note. Whereas the learned counsel for the respondent argued that the third defendant being a surety his liability is only co-extensive with that of the principal debtor and as the principal debt has been scaled down he cannot be made liable for higher amount.

To appreciate the contentions of the parties it will be relevant to consider the scope of the relief given to an agriculturist under the Madras Agriculturists Relief Act, 1938. Under section 7 of the Act all debts payable by an agriculturist at the commencement of the Act shall be scaled down in accordance with the provisions of the Act and that the sum in excess of the amount so scaled down shall be recoverable from him or from any land or interest in land belonging to him. Section 8 provides the manner of scaling down the debts incurred before 1st October, 1932.

Under that section all the interest outstanding on 1st October, 1937, shall be deemed to be discharged. Clause 2 of section 8 provides the alternative mode of scaling down the debt. Section 9 provides for the scaling down of the debts incurred after 1st October, 1932. Section 19 prescribes the machinery for amending the decrees so scaled down and also for recording satisfaction in case the entire decree debt is discharged. A combined reading of the provisions shows that the liability of an agriculturist is reduced under the provisions of the Act and thereafter he would be liable only for the amount scaled down. This is not the case of a debt being intact but by a statutory provision the recovery of the debt or the execution of the decree as the case may be is restricted by legislation. This distinction may be important in considering the liability of a surety. The liability of the surety vis a vis the principal debtor is regulated by the provisions of the Contract Act. Section 138 reads:

“The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract.”

It is a settled principle of law that the surety’s liability is only accessory and secondary Under the express provisions of the aforesaid section his liability is made only co-exten