IN THE HIGH COURT OF MADRAS
Leach, C.J.
Ps. Ar. Ar. Arunachalam Chettiar by agent Sivaraman Chettiar
Versus
Palaniswami Goundan
Decided On : 03.03.1944
Stay of Execution Proceedings - Agriculturists Belief Act, 1938 - Section 20, Section 19 - The court held that the ad interim order was not the starting point for the 60 days period of limitation and that the order which fell within the section was the order of 25th July. The court also clarified that the Official Receiver should be joined in an application under Section 19 but proceedings would not be void if he is not made a party. The decree stands and cannot be re-opened. The respondent is entitled to have it scaled down in accordance with the provisions of the Act, and this has been done.
Fact of the Case:
The appellant obtained a mortgage decree against the respondent. The respondent applied for a stay of the execution proceedings under Section 20, Agriculturists Belief Act, 1938, pending an application for scaling down under Section 19 of the Act. The application for scaling down was filed and resulted in the decretal amount being reduced. The appellant appealed against this order.
Finding of the Court:
The court found that the ad interim order was not the starting point for the 60 days period of limitation and that the order which fell within the section was the order of 25th July. The court also clarified that the Official Receiver should be joined in an application under Section 19 but proceedings would not be void if he is not made a party. The decree stands and cannot be re-opened. The respondent is entitled to have it scaled down in accordance with the provisions of the Act, and this has been done.
Issues: The issues involved the interpretation of Section 20 and Section 19 of the Agriculturists Belief Act, 1938, and the requirement of the Official Receiver being made a party to the application under Section 19.
Ratio Decidendi: The ad interim order was not the starting point for the 60 days period of limitation. The Official Receiver should be joined in an application under Section 19 but proceedings would not be void if he is not made a party. The decree stands and cannot be re-opened. The respondent is entitled to have it scaled down in accordance with the provisions of the Act, and this has been done.
Final Decision: The appeal was dismissed with costs.
Leach, C.J.
1. On 20th July 1935 the appellant obtained a mortgage decree against the respondent for the sum of Rs. 2998-5-4. The mortgage was dated 22nd December 1931 and had been given as security for the repayment of amounts due on three promissory notes. On 12th July 1939 the decree-holder filed an application for the execution of his decree and, in due course, the Court fixed 17th July 1940 as the date for the sale of the mortgaged property. On 15th July the judgment-debtor applied under Section 20, Agriculturists Belief Act, 1938, for a stay of the execution proceedings, pending an application for scaling down under Section 19 of the Act. On 17th July the Subordinate Judge passed an order of ad interim stay. That was a stay pending the filing of the counter affidavit by the judgment-debtor and the hearing of the application. The application was heard on 25th July when an order for stay was passed under Section 20. The application for scaling down was filed on 23rd September 1940 and resulted in the decretal amount being reduced to Rs. 2088-9-6. The decree-holder appealed against this order to the District Judge, who affirmed the order of the Subordinate Judge. The decree-holder then appealed to this Court. He contended that the order could not stand because the application had not been filed within 60 days of the order of ad interim stay and that the application was not maintainable because the Official Receiver had not been made a party to the proceedings under Section 19. It appears that the respondent had been adjudicated an insolvent before the institution of the mortgage suit. The decree-holder also attacked the order on the merits. The appeal was heard by Patanjali Sastri J. who found against the decree-holder on all the points raised by him. This appeal is from the judgment of the learned Judge under Clause 15, Letters Patent.
2. Section 20 of the Act states that the Court executing a decree shall, on application, stay the proceedings until the Court which passed the decree has passed orders on an application made or to be made under Section 19. Then follows a proviso which states that where within 60 days after the application for stay has been granted the judgment-debtor does not apply to the Court which passed the decree for relief under Section 19 or where an application has been so made and is rejected, the decree shall be executed as it stands, notwithstanding anything contained in the Act to the contrary. The appellant says that inasmuch as the application under Section 19 was made more than 60 days after the order of ad interim stay, he is entitled to have the decree passed by the Subordinate Judge executed without any reduction. Patanjali Sastri J. held that the order for stay contemplated by the section was the order for stay passed on 25th July 1940 and not the ad interim order, and I respectfully agree. There is nothing in the section which contemplates an ad interim order. I do not doubt that the Court has the power to pass an order staying the execution proceedings pending the hearing of the application under Section 20, but that application was not heard until after the respondent had filed his appearance and admitted that he was an agriculturist. If the ad interim order were to be the starting point for the 60 days period of limitation, it would mean that if the creditor were not served within the period the judgment-debtor would be precluded from having his decree scaled down, which could never have been intended. In my judgment it is quite clear that the ad interim order was not an order falling within the section and that the order which did fall within the section was the order of 25th July.
3. The contention of the appellant that the Official Receiver was a necessary party to the application under Section 19 appears to be made on the observations of my learned brother Wadsworth J., in Jagannatha v. Seeniveera A.I.R. 1941 Mad. 487 and Krishnarao v. Official Receiver A.I.R. 1942 Mad. 254. I
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