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Chintapalli Venkatratnam v. Merla Seshamma
Structured Summary of the Opinion (Delivered by Satyanarayana Rao, J.)
Factual and Procedural Background
This is a civil miscellaneous appeal placed before a Full Bench under an Order of Reference to reconsider the decision in C.M.A. Nos. 316 and 391 of 1947. The appellant is the legal representative and adopted son of the third defendant in O.S. No. 16 of 1939. O.S. No. 16 of 1939 was instituted to enforce a mortgage dated 6 November 1926 (Ex. A) executed by defendants 1 to 3 and by the first defendant as guardian of a minor (the fourth defendant). The mortgage had been executed to discharge earlier debts. The property, originally mortgaged to the plaintiff in 1920 (Ex. D) and subject also to a promissory note of 1921 (Ex. E), was purchased by the second defendant in 1925 (Exs. G and H) subject to the earlier mortgage and with an obligation to discharge the promissory note.
The third defendant, who had adopted one of the first defendant's sons, claimed the benefit of the Madras Agriculturists Relief Act (Madras Act IV of 1938) to have the debt scaled down and pleaded she was only a surety with liability coextensive with the principal debtors. The Subordinate Judge scaled down the debt for the third defendant in the same manner as for other mortgagors. There were appeals: A.S. No. 6 of 1942 by the plaintiff (creditor) and A.S. No. 516 of 1941 by defendants 3 and 7 (which the opinion notes is not material to the present controversy). In A.S. No. 6 of 1942 this Court held that the third defendant was not entitled to the benefits of the Act to the same extent as other defendants because she became a debtor only when she joined in the 1926 mortgage and the Court was not satisfied she was a surety. That judgment was pronounced on 2 December 1943, and a final decree was passed on 27 March 1946.
Execution proceeding E.P. No. 148 of 1946 was filed by the creditor on 28 November 1946. The Madras Agriculturists Relief Act was amended by Act XXIII of 1948 (coming into force on 25 January 1949), adding Explanation III to S.8 and Section 16 to attempt retrospective effect. The third defendant (later deceased) applied under S.20 in E.A. No. 219 of 1949 to stay execution and then filed I.A. No. 981 of 1949 to scale down the decree under the amended Act. The Subordinate Judge dismissed I.A. No. 981 of 1949 on 6 March 1950, concluding that because the preliminary decree was passed by the High Court the remedy was to move that Court. The legal representative appealed (C.M.A. No. 460 of 1950) and filed C.M.P. Nos. 8384 and 8627 of 1950 to scale down the decree debt in A.S. No. 6 of 1942. The effect of S.16 of the Amending Act XXIII of 1948 became the central point of debate on reference to this Full Bench.
Legal Issues Presented
- Whether the amendments effected by Act XXIII of 1948 (Madras Agriculturists Relief (Amendment) Act, 1948), and specifically Section 16, operate retrospectively so as to entitle the appellant (legal representative of the third defendant) to the benefits of the amended Act.
- Whether Clause (iii) of Section 16 applies to decrees or orders which had become final before the commencement of the Amending Act but had not been executed or satisfied in full before that commencement (i.e., whether S.16(iii) reaches final but partially executed decrees).
- Whether the prior view expressed by the Bench in C.M.A. Nos. 316 and 391 of 1947 — that S.16(iii) does not apply to decrees or orders which had become final before the commencement of the Act — was correct and should be followed or overruled.
Arguments of the Parties
Appellant's Arguments
- The appellant (through Mr. Rama Rao) contended that Sub-clause (iii) of S. 16 of the Amending Act (XXIII of 1948) enables him to claim the benefits of the amended Act notwithstanding the earlier final adjudication of this Court.
- At one stage the appellant's counsel attempted to rely on Clause (i) of S.16 (which applies to suits instituted after the commencement of the Act) but abandoned that line of argument when it was pointed out there were no relevant proceedings instituted after the commencement of the Act except the scaling-down proceeding which was started after the Act came into force.
Respondent's Arguments
- The respondent relied upon and pressed the view taken by a Bench of this Court in C.M.A. Nos. 316 and 391 of 1947, which held that Clause (iii) of S.16 has no application to proceedings in which the decree or order passed has become final before the commencement of the Act.
- The respondent's counsel (Mr. Kuppuswami) argued for a construction that gives effect to the plain language of the statute but is cautious about unduly extending retrospective operation; the respondent maintained that a court must not add to or subtract from the statute's language and that the construction should not render any clause ineffective.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| C.M.A. Nos. 316 and 391 of 1947 (Bench of this Court) | Held that Clause (iii) of S.16 does not apply to decrees or orders which had become final before the commencement of the Amending Act. | The Full Bench reviewed and concluded that the view in these CMAs was erroneous; it overruled that decision because that construction would render Clause (iii) unnecessary and fail to give full effect to the statute. |
| A.S. No. 6 of 1942 (this Court; judgment pronounced 2 Dec 1943) | The Court had held that the third defendant was not entitled to the benefits of the Madras Agriculturists Relief Act (IV of 1938) to the same extent as other defendants, and was not established to be a surety. | The Full Bench recognized that earlier decision but held that, by reason of the Amending Act XXIII of 1948 and S.16 read with its clauses (particularly (iii)), the legal representative of the third defendant is now entitled to the benefits of the Amending Act; the appeal was allowed and the matter remanded for quantification. |
| A.S. No. 516 of 1941 | Identified as an appeal against the Subordinate Judge's decision by defendants 3 and 7. | The opinion states this appeal (A.S. No. 516 of 1941) is left out of consideration as it has no bearing on the present controversy. |
Court's Reasoning and Analysis
The Full Bench framed the decisive issue as whether the Amending Act (XXIII of 1948) is retrospective in operation in the present case. To determine this it focused on Section 16 of the Amending Act, which reads (as quoted in the opinion):
“The amendments made by this Act shall apply to the following suits and proceedings, namely:
(i) all suits and proceedings instituted after the commencement of this Act;
(ii) all suits and proceedings instituted before the commencement of this Act, in which no decree or order has been passed, or the decree or order passed has not become final, before such commencement;
(iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act:
Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act.”
The Court proceeded by statutory construction and basic canons of interpretation. It observed:
- The language of S.16 is mandatory: the amendment “shall apply” to the suits and proceedings specified.
- Clauses (ii) and (iii) are independent and intended to address different factual situations; clause (i) was not applicable on the facts and was abandoned by the appellant.
- Clause (ii) plainly covers suits instituted before the commencement of the Act where no decree or order has been passed or where any decree or order passed has not become final before commencement — i.e., pending proceedings in the ordinary sense.
- Clause (iii) does not contain the qualifying words “has not become final.” It is general in its terms and reaches suits and proceedings in which a decree or order has not been executed or satisfied in full before the commencement of the Act. The Court reasoned this language must, in ordinary meaning, extend to decrees that had become final but whose execution or satisfaction remained unfinished.
- If clause (iii) were restricted to matters where a decree had not become final, it would be redundant because clause (ii) would already cover them. A construction that renders clause (iii) unnecessary should be avoided unless compelled; therefore the Court preferred an interpretation that reconciles clauses (ii) and (iii) and gives effect to both.
- The Court noted that even when an appeal is pending a decree may be executed (subject to the result of appeal), but such execution remains subject to alteration by appellate adjudication; this did not undercut the interpretation that clause (iii) is aimed at executable decrees in an unfinished state of execution.
- The proviso in S.16 (that no creditor shall be required to refund sums realized before commencement) was read as protecting creditors where partial execution had already resulted in sums being realized before the Amending Act took effect.
Applying these principles, the Court concluded that clause (iii) was intended to cover decrees which had become final before the commencement of the Amending Act but which had not been fully executed or satisfied. Because the decree in question had not been fully executed/satisfied before the commencement of the Act, the appellant (legal representative of the third defendant) could invoke the amended provisions. The Court therefore found the earlier view in C.M.A. Nos. 316 and 391 of 1947 (to the contrary effect) to be erroneous and overruled it.
Procedurally, because the lower Court had not ascertained the precise amount payable after scaling down under the amended Act, the Full Bench directed that the application (I.A. No. 981 of 1949) be remanded to the Subordinate Court for determination of the amount, after crediting any payments already made by or on behalf of the third defendant.
Holding and Implications
Core Ruling: APPEAL ALLOWED.
The Full Bench held that the legal representative of the third defendant is entitled to the benefits of the Amending Act (Madras Agriculturists Relief (Amendment) Act XXIII of 1948) and to have the debt scaled down in accordance with the amended provisions with reference to Exhibits D and E. The Court expressly overruled the contrary view taken in C.M.A. Nos. 316 and 391 of 1947.
Direct consequences ordered by the Court:
- I.A. No. 981 of 1949 is remanded to the Subordinate Court for determination of the scaled-down amount, after giving credit for any payments made by the third defendant or the third defendant's legal representative.
- The appellant is entitled to his costs in this Court.
- No orders were necessary on C.M.P. Nos. 8384 and 8627 of 1950.
On implications, the opinion confined itself to statutory interpretation and the parties before the Court: it overruled the earlier decisions identified and applied S.16(iii) to permit retroactive relief where decrees had become final but were not fully executed or satisfied before the commencement of the Amending Act. The consequence for the parties is that the third defendant (through his legal representative) may obtain scaling down under the amended statute; the actual quantified effect is to be worked out on remand. The opinion did not elaborate beyond these direct effects.
This summary is limited strictly to the content and holdings contained in the provided opinion. No facts or conclusions not present in the opinion have been added.
(In pursuance of the Order of Reference, made on 10-7-51, this appeal coming on for hearing, the Court delivered the following)
JUDGMENT
(Delivered by Satyanarayana Rao, J.)
This civil miscellaneous appeal has been placed before us under the directions of the Honourable the Chief Justice for a reconsideration of the decision in C.M.A Nos. 316 and 391 of 1947 by our learned brethren Subba Rao and Somasundaram JJ. As the case itself has been referred to us and not merely a question, it is necessary to state the facts out of which this appeal arises in order to appreciate the questions that arise for decision.
The legal representative of the third defendant in O.S.N 16 of 1939 and who is also her adopted son is the appellant in this appeal and also the petitioner in C.M.P Nos. 8384 and 8627 of 1950. O.S No. 16 of 1939 was instituted to enforce a mortgage dated 6th November 1926 for a sum of Rs. 12,000, executed by defendants 1 to 3 and also by the first defendant as guardian of his minor son the fourth defendant. The first defendant is the husband of the second defendant and the third defendant is the first defendant's paternal uncle's widow. She adopted one of the sons of the first defendant. The mortgage (Ex. A) was executed to discharge certain earlier debts. The property covered by the mortgage belonged originally to certain Chintapalli people who mortgaged the property to the plaintiff on 24th May 1920 for a sum of Rs. 5000 (Ex. D). They were also indebted to the same plaintiff under a promissory note dated 1st December 1921 (Ex. E.) the principal of which was Rs. 1,000. Under two documents dated 14th June 1925 (Ex. G.) and 12th October 1925 (Ex. H.) the property was purchased by the second defendant subject to the earlier mortgage and also with an obligation attached that from and out of the consideration for the sale the debt due under the promissory note should be discharged by her. It is common ground that the purchase by the second defendant, the wife of the first defendant was for the benefit of the family, the suit was instituted on 15th October 1939 and in that suit the third defendant claimed, taking advantage of the provisions of Madras Act IV of 1938, that she was entitled to have the debt scaled down along with the other defendants who also claimed similar reliefs. She pleaded further that she was only a surety for the debt and her liability was coextensive with that of the principal debtors. The learned Subordinate Judge who tried the suit allowed the benefits of the Act to the third defendant also to the same extent as he had allowed to the other defendants who were the other mortgagors, that is, the debt was scaled down so as to reduce the debt due under the suit mortgage to the principal amount due under Exs. D and E.
There were two appeals against that decision to this Court one by the plaintiff which was A.S No. 6 of 1942 and the other by the defendants 3 and 7, A.S No. 516 of 1941. We may leave out of consideration A.S No. 516 of 1941 as it has no bearing to the present controversy. In A.S No. 6 of 1942 the plaintiff creditor claimed that she was entitled to a decree against the third defendant for the principal sum mentioned in the suit mortgage with interest scaled down according to the provisions of the Act, and that the decree granted by the lower Court giving her also the benefits of the provisions of the Act so as to reduce the debt further as in the case of other mortgagors was not justified. This Court held that the third defendant was not entitled to the benefits of the Act in the same and to the same extent as the other defend, ants as she became a debtor for the first time only when she joined in the execution of the suit mortgage in 1926. The learned Judges were not satisfied that the position of the third defendant was that of a surety. The judgment of this Court was pronounced on 2nd December 1943. After this in the usual course, a final decree in the suit was passed on 27th March 1946. The creditor thereafter filed E.P No. 148 of 1946 on 28th November 1946 to bring the mortgaged properties to sale. Apparently these proceedings dragged on for a long time for some reason or other and meanwhile the Madras Agriculturists Relief Act was amended by Act XXIII of 1948 which came into force on 25th January 1949. Under the amended provisions a new explanation (Explanation III) to S. 8 was added by which the view taken by this Court regarding the requirements that go to constitute “the same creditor” and “the same debtor” within the meaning of the Act was radically altered. With a view to make this provision retrospective they introduced also S. 16, the construction of which is the subject-matter of this appeal. Taking advantage of these provisions the third defendant in the first instance applied under S. 20 of the Act in E.A No. 219 of 1949 to stay the execution of the decree which was granted by the Court on 28th June 1949, the petition itself having been filed six days earlier. This was followed by an application to scale down the decree. This was I.A No. 981 of 1949 dated 10th August 1949. The application was naturally opposed by the decree-holder on various grounds. The learned Subordinate Judge, who disposed of the matter finally rested his decision on the ground that as the decree that was ultimately passed, namely, the preliminary decree was one passed by the High Court, the remedy if any, of the third defendant was to have moved this Court for scaling down the decree and that he had no jurisdiction therefore to deal with the matter. He also expressed his opinion on the other points also which was adverse to the third defendant. In the result, the application I.A No. 981 of 1949, was dismissed by the learned Subordinate Judge on 6th March 1950. Against that decision the legal representative of the third defendant, the third defendant having died in the meanwhile, preferred C.M.A No. 460 of 1950 on 18th July 1950 and by way of abundant caution on 14th August 1950 he also filed C.M.P No. 8627 of 1950 to scale down the decree debt in A.S No. 6 of 1942.
When the appeal and the petition were posted before myself and Raghava Rao J. the effect of S. 16 of the Madras Agriculturists Relief (Amendment) Act XXIII of 1948 was debated. It was contended on behalf of the appellant that Sub-Cl. (iii) of S. 16 of that Act enables the appellant to claim the benefits of the Act notwithstanding the earlier adjudication of this Court which has become final, while for the respondent this position was contested and reliance was placed by the respondent on a decision of a Bench of this Court in C.M.A Nos. 316 and 391 of 1947 in which the view which supports the respondent was taken. As we left a doubt regarding the correctness of this decision the matter was referred to a Full Bench for reconsideration.
It cannot be seriously disputed that the appellant is entitled to the benefits of the new Act if the provisions of Act XXIII of 1948 are held to be retrospective. If the appellant is entitled to the benefits of the new provisions the debt should be scaled down in accordance with those provisions. The point therefore for consideration is whether the Act is retrospective. In order to give retrospective effect to the provisions of the Act, S. 16 was enacted in the Act; (XXIII of 1948). It is as follows:
“The amendments made by this Act shall apply to the following suits and proceedings, namely:—
(i) all suits and proceedings instituted after the commencement of this Act;
(ii) all suits and proceedings instituted before the commencement of this Act, in which no decree or order has been passed, or the decree or order passed has not become final, before such commencement;
(ii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act:
Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act.”
The provisions of this section are clearly mandatory as the section itself says that the amendment made by this Act “shall apply” to the following suits and proceedings. The clause that is relied on in support of the contention advanced on behalf of the appellant by his learned Advocate Mr. Rama Rao is Cl. (iii). He also at one stage of the arguments attempted to rely on Cl. (i) but, when it was pointed out to him that there was no proceeding instituted after the commencement of this Act in the present case except the proceeding for scaling down which has been started after the new Act came into force he abandoned that contention and did not further press his contention based on Cl. (i). Clause (i) therefore may be left out of consideration altogether. It cannot be doubted that the two Cls. (ii) and (iii) are entirely independent and are intended to provide for different situations. As has been rightly pointed out on behalf of the respondent by Mr. Kuppuswami in construing a provision like this which gives retrospective operation to a statute it is incumbent upon the Court to give effect to the plain language of the section and that retrospective operation should not be unduly extended; nor should it be negatived or cut down if the language makes it imperative that such operation should be given. It is not open to a Court of construction in interpreting a statute either to add or to subtract from the language of the statute. As far as possible an attempt should be made to reconcile and interpret the provision of a statute in a manner so as to make none of the provisions ineffective or nugatory. If possible the provisions of the Act must be so construed as to give effect to all the provisions. A provision can be rejected as unnecessary only if a Court is driven to such a situation and not otherwise. Bearing these principles in mind it is clear that Cl. (ii) applies to pending proceedings, that is, proceedings which were instituted before the commencement of the Act but which did not become final before such commencement. This is made clear by the clause in which the decree or order passed has not become final. It implies therefore that if the decree or order passed in a suit or proceeding becomes final before the commencement of the Act the provisions of the Act cannot be applied to such a suit or proceeding. But in Cl. (iii) the words “in which the decree or order passed has not become final” do not occur. It is quite general and applied to all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act so that it seems to apply to decrees or orders even if they had become final before the commencement of this Act provided the decree or order has not been executed or fully satisfied. The view taken by the learned Judges in the civil miscellaneous appeals already referred to was that while the two clause's are independent, Cl. (iii) has no application to proceedings in which the decrees or orders have become final before the commencement of the Act. It is this view which is also pressed now before us by the learned Advocate for the respondent. While we agree with the learned Judges in holding that the two clauses are independent, we are unable with great respect to accept the view that Cl. (iii) applied only to cases in which the decrees or orders have not become final. If the decree or order has not become final before the commencement of this Act, Cl. (iii) in our opinion seems to be unnecessary and as such the case would be covered by Cl. (ii). Further it would be difficult to imagine that a decree or order which has not become final can be finally executed or can be finally satisfied. No doubt it is true that even when an appeal is pending a decree may be executed and satisfaction may be entered. But all that is only subject to the result of the appeal. If the appeal succeeds or the amount due by the defendant to the plaintiff is increased by the appellate Court fresh execution has to be started, the satisfaction must be re-opened and the execution must proceed. The Legislature, in our opinion, when it enacted these two provisions must have intended that even in the case of decrees or orders which have become final, having regard to the provisions of the new Act, relief should be had by the judgment-debtor so long as the decree or order was not executed or was not satisfied in full before the commencement of the Act. If however a decree was executed in part and before it was fully satisfied the debt was scaled down under the pro-visions of the Act as a result of which the creditor was found to have received more than what he was entitled to the proviso enacts that in such a situation the creditor should not be required to refund any sum which has been paid to or realised by him before the commencement of this Act. The question is asked, and legitimately, as to which are the kinds of decrees or orders which have become final and which are sought to be excluded by implication in Cl. (ii) of S. 16. It is of course not easy to give an exhaustive list of such decrees or orders. It may be that the Legislature contemplated that decrees and orders of a declaratory nature and which are not executable and which have become final before the commencement of the Act, need not be opened. A reading of the two clauses together would suggest that Cl. (iii) would apply exclusively to executable decrees or orders which though they have become final before the commencement of the Act are still in the stage of unfinished execution and at the stage at which satisfaction was not fully received. The view which we take, in our opinion, reconciles both the clauses and does not make any of the clauses unnecessary. For, if the view taken by the learned judges and strongly pressed now before us by the learned Advocate for the respondent is accepted, it seems to us that Cl. (iii) is wholly unnecessary. Such a construction of a statute should be as far as possible avoided if it is possible to avoid it. We are therefore of opinion that the view taken by the learned Judges in C.M.A Nos. 316 and 391 of 1947 is erroneous and the decision must be overruled.
The result of our view is that the legal representative of the third defendant is entitled to the benefit of the provisions of the Amending Act XXIII of 1948 and to have his debt scaled down in accordance with the provisions of the Act with reference to Exs. D and E also. As the amount has not been ascertained by the lower Court we think the best course is to allow the appeal and remand the application to the lower Court for the determination of the amount after giving credit to payments, if any, made by the third defendant or the third defendant's legal representative. I.A No. 981 of 1949 is therefore remanded. The appellant is entitled to his costs in this Court.
No orders are necessary on C.M.P Nos. 8384 and 8627 of 1950.
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