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1938 Supreme(Mad) 317

IN THE HIGH COURT OF MADRAS
Varadachariar, J.
Perianna Goundan
Versus
Sellappa Goundan and Ors.
Decided On : 20.10.1938

Relief under Madras Act IV of 1938 extends to a broad definition of 'debt' and includes heirs, legal representatives, and assigns. The liability under the Act is traceable to the original debt, and the relief is not confined to the applicant.

Headnote:

Madras Act IV of 1938 - Relief for Agriculturists - Section 3(3), Section 8, Section 14

Fact of the Case:

The case involved a dispute over the recovery of money due under a mortgage deed. The plaintiff claimed to bring to sale the properties purchased by the ninth defendant as part of the mortgage security. The lower Court upheld the contention of the ninth defendant, but on appeal, the decree was reversed, and the plaintiff was held entitled to a decree for almost the full amount due under the mortgage deed.

Finding of the Court:

The court held that the ninth defendant was entitled to relief under Madras Act IV of 1938, and the debt must be scaled down in the manner indicated in Section 8 of the Act.

Issues: The issues included the interpretation of the definition of 'debt' under Section 3(3) of the Act, the applicability of relief under the Act to heirs and legal representatives, and the timing of liability under Section 8 of the Act.

Ratio Decidendi: The court interpreted the definition of 'debt' broadly, allowing for relief under the Act even if the person was not personally liable. It also clarified that relief under the Act extends to heirs, legal representatives, and assigns, and that the liability under Section 8 of the Act is traceable to the original debt, not the date of purchase of the property.

Final Decision: The court held that the debt must be scaled down in accordance with Section 8 of the Act, and the plaintiff was entitled to a specific amount plus interest and costs.

JUDGMENT

Varadachariar, J.

1. This is an application filed by the ninth defendant in the Court below (eighth respondent here) for relief under Madras Act IV of 1938.

2. The suit out of which the appeal arose was instituted for the recovery of money due under a mortgage deed dated 27th July, 1929, executed by the first defendant in favour of the plaintiff. In execution of a money decree obtained against the mortgagor, the eighth defendant purchased the equity of redemption in a portion of the hypotheca in 1930 and he sold the same to the ninth defendant on 11th August, 1933. The plaintiff claimed to bring to sale the properties purchased by the ninth defendant as part of the mortgage security. The ninth defendant in turn contended that the mortgage in favour of the plaintiff was nominal and not supported by consideration. The lower Court substantially upheld this contention of the ninth defendant and gave a decree in the plaintiffs favour for a small amount. On appeal by the plaintiff, we reversed the decree of the lower Court and held that the mortgage was true and fully supported by consideration and that the plaintiff was entitled to a decree for almost the full amount due under the mortgage deed. As the ninth defendant stated that he was applying for relief under Madras Act IV of 1938, we allowed the matter to lie over and the question has now been argued before us.

3. It has not been denied by the plaintiff that the ninth defendant is an agriculturist within the meaning of the Act nor has it been denied that the mortgagor is an agriculturist. The only ground on which the petitioners right to relief under, the Act is challenged is that the liability of the petitioner is not a debt within the meaning of Section 3(3) of the Act. The learned Counsel for the petitioner contends that this definition should be understood as limited to cases where a person is personally liable. We are unable to read the definition in this limited sense. There are no words in the definition clause justifying any such restriction; the clause speaks of any liability and the word due does not necessarily imply that it must be recoverable by imprisonment of the debtor. The inappropriateness of restricting it in the sense contended for will be realised when it is remembered that even by the time this Act was contemplated imprisonment for debt has, to a great extent, been abolished by Act XXI of 1936. It could not therefore have been the intention of the Legislature to limit the relief under the Act to cases where a person was personally liable. Its avowed purpose was to enable agriculturists to retain their property and prevent such property passing into the hands of creditors or execution purchasers.

4. Again, according to the contention of the plaintiffs learned Counsel, it will only be the person who actually contracts the debt that will be entitled to claim relief under the Act and not his heir at law or legal representative because the latter will ordinarily be under no personal liability. Similarly, in the case of joint families, relief under the Act will have to be limited only to the actual borrower or to those special cases in which other members of the family might on special grounds have become personally liable. But the provisions of the Act relating to joint families clearly indicate that even members who are under no personal liability are entitled to invoke the protection of the Act for the preservation of the property of the family. It was next pointed out that while Clause (5) which defines creditor takes care to include his heirs, legal representatives and assigns, there is no corresponding definition in the case of a debtor. This omission is obviously due to the fact that the reference to liability in Clause (3) is wide enough to cover every person who is in any manner liable, either because he is personally liable or because he is liable on account of the possession of property. There was no necessity to refer to any heir, legal represent



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