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Joseph v. Varkey Joseph And Another
Summary of Opinion
Factual and Procedural Background
This revision arises from a reference made by Justice Kochu Thommen by his order dated 4 April 1986 seeking re-consideration of the judgment rendered by Justice Narendran in Veluthakunju v. Sankaran, 1979 Ker LT 501.
The petitioner is the decree-holder, having obtained a decree in O.P(DR). No. 66 of 1971 under Act 11/1970 from the Sub Court, Alleppey. The decree found a sum of Rs. 10,698/- due as on 14-7-1970, payable by 17 instalments, and also entitled the petitioner to future interest on the decretal amount. The petitioner sought execution in E.P. No. 82/77 for the balance due.
On 9th December 1980 the respondents deposited Rs. 11,4221.76 and sought certification that the decree was fully satisfied. The respondents claimed that they were not liable to pay future interest for the period from 14-10-1975 to 14-1-1977 by reason of Section 7 of the Kerala Debtors (Temporary Relief) Act, 1975 (Act 30 of 1975). The executing court accepted that contention and certified the decree as satisfied. The petitioner challenged that order by filing this revision petition.
Legal Issues Presented
- Whether the respondents are liable to pay future interest as directed by the Sub Court, Alleppey for the period from 14-10-1975 to 14-1-1977 in view of Section 7 of the Kerala Debtors (Temporary Relief) Act, 1975.
- Whether the decision in Veluthakunju v. Sankaran (1979 Ker LT 501) correctly stated the law regarding the survival of rights under Section 7 of the 1975 Act after repeal, and therefore whether it requires re-consideration.
Arguments of the Parties
Petitioner (decree-holder) — principal contentions
- The petitioner contends that the respondents remain liable to pay future interest as directed by the Sub Court for the decretal period, and thus challenges the executing court's certification of satisfaction.
- The petitioner relies upon the judgment of Justice Narendran in Veluthakunju v. Sankaran (1979 Ker LT 501) which supports the view that rights under Section 7 could not be claimed after the 1975 Act ceased to be in operation if the debtor had not claimed and secured the benefit during the Act's currency.
Respondents — principal contentions
- The respondents claimed, and the executing court accepted, that by operation of Section 7 of the Kerala Debtors (Temporary Relief) Act, 1975 no interest accrued in respect of debts for the period mentioned in Section 3 (14-10-1975 to 14-1-1977), and therefore they were not liable to pay interest for that period.
- The respondents further contended that the decision in Veluthakunju v. Sankaran did not correctly lay down the law and required re-consideration.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Veluthakunju v. Sankaran, 1979 Ker LT 501 | Held that a debtor who did not claim or secure the benefit under Section 7 of the 1975 Act while it was in force could not claim that relief after the Act ceased to operate; the learned single judge treated the 1975 Act as a temporary statute and held that accrued rights were not saved by the repealing Act. | The court examined and disagreed with this view. It concluded there was no basis for treating the 1975 Act as a temporary statute and consequently overruled Veluthakunju on the point that the rights under Section 7 did not survive repeal. |
| Krishnan v. State of Madras, AIR 1951 SC 301 | Sets out the general rule that, in regard to a temporary statute, proceedings being taken under it will ipso facto terminate when the statute expires (used by the single judge to justify non-survival of rights). | The court noted that the learned single judge relied on this principle but held that the 1975 Act was not a temporary statute; hence the application of Krishnan in that manner was not appropriate for negating the survival of rights under the 1975 Act. |
Court's Reasoning and Analysis
The court proceeded by first identifying the statutory provisions relevant to the dispute:
- Section 3 of the Kerala Debtors (Temporary Relief) Act, 1975 bars institution of suits for recovery of debt, applications for execution of decree in respect of a debt, and related appeals/revisions for one year from commencement or for such longer period as the Government may notify; suits and proceedings pending at commencement stand stayed for that period. The period under Section 3 was extended until 14-1-1977 by notification.
- Section 7 provides that no interest shall accrue during the period mentioned in Section 3 in respect of a debt due at the commencement of the Act from a debtor entitled to the benefits of Section 3.
From these provisions the court acknowledged that "by the operation of Section 7 no interest accrued in favour of the petitioner and against the respondents" for the period 14-10-1975 to 14-1-1977 — meaning the creditor would not be entitled to claim interest for that period.
The pivotal legal question was whether the right conferred by Section 7 could be enforced after the 1975 Act was repealed. The court examined the reasoning in Veluthakunju where the learned single judge had treated the 1975 Act as a temporary statute and applied the principle from Krishnan v. State of Madras to conclude that rights under Section 7 did not survive repeal if not claimed during the Act's currency.
The court rejected the premise that the 1975 Act was a "temporary statute." Its reasons:
- The relief provided by the Act was temporary in character but that did not make the Act itself a temporary statute which would expire by efflux of time; had the Legislature intended a limited life for the statute it would have specified a fixed period in the Act.
- Section 3 authorised the State Government to extend the bar period by notification without prescribing any outer limit on such extension; this mechanism is inconsistent with the notion of the Act being self-expiring or temporary.
- If the 1975 Act were temporary it would not have been necessary to repeal it; instead it was repealed by the Kerala Debt Relief Ordinance, 1977 and subsequently replaced by the Kerala Debt Relief Act, 1977, indicating a legislative choice to repeal rather than to allow expiry by efflux of time.
Because the court held the 1975 Act was not temporary, it found that Section 4 of the Interpretation and General Clauses Act (which provides that rights, privileges, obligations or liabilities acquired, accrued or incurred under a repealed enactment are saved and may be enforced after repeal unless a different intention appears) applied to the repeal of the 1975 Act by the 1977 Act. The court rejected the argument that Section 13(2) of the 1977 Act (which expressly saves actions done under the 1977 Ordinance) demonstrated a contrary intention with respect to the 1975 Act; the express saving for the Ordinance was required because an Ordinance has a limited life, whereas no similar saving clause was required for the 1975 Act if it was not to be treated as temporary.
The court concluded that the declaration in Section 7 conferred an enduring right on a debtor, and that right vested and could be enforced even after repeal of the 1975 Act. For these reasons, the court held that the decision in Veluthakunju that took the contrary view was incorrect and overruled it.
Holding and Implications
Holding (core ruling): Revision dismissed. The court held that the right conferred by Section 7 of the Kerala Debtors (Temporary Relief) Act, 1975 vested in the respondents and could be enforced even after the repeal of the 1975 Act. The court expressly overruled the decision in Veluthakunju v. Sankaran, 1979 Ker LT 501 insofar as it held otherwise.
Implications:
- Direct effect on the parties: The petitioner’s revision challenging the executing court’s certification was dismissed; the executing court’s acceptance of the respondents' claim under Section 7 (that no interest accrued for the period 14-10-1975 to 14-1-1977) stands, and the respondents’ position that they were not liable to pay interest for that period is upheld by the present court's analysis.
- Precedential effect: The court overruled the earlier decision in Veluthakunju v. Sankaran (1979 Ker LT 501) on the point concerning survival of rights under Section 7 after repeal of the 1975 Act, and held that Section 4 of the Interpretation and General Clauses Act applies to save accrued rights on repeal unless a contrary intention appears.
- Costs: No costs were awarded.
Order: Revision dismissed. No costs.
Malimath, C.J:— This revision has come up before us on a reference made by Justice Kochu Thommen by his order dt. 4th April, 1986 on the ground that the judgment rendered by Justice Narendran in Veluthakunju v. Sankaran, 1979 Ker LT 501 requires re-consideration.
2. The petitioner is decree-holder, he having obtained the same in O.P(DR). No. 66 of 1971 under Act 11/1970 from the Sub Court, Alleppey. A sum of Rs. 10,698/- was found due from the respondents as on 14-7-1970 and the respondents were required to pay the same by 17 instalments. The petitioner was also entitled to future interest on the principal amount found due. The petitioner sought execution in E.P No. 82/77 for the balance of the amount due to him. On 9th December, 1980 the respondents deposited Rs. 11,4221.76 and prayed that it be certified that the decree is fully satisfied. In doing so a claim was made by the respondents to the effect that they are not liable to pay future interest from 14-10-1975 till 14-1-1977 having regard to the provisions of S. 7 of the Kerala Debtors (Temporal Relief) Act, 1975 (Act 30 of 1975). The executing court accepted this contention and certified that the decree stands satisfied. It is the said order that was challenged by the petitioner in this revision petition.
3. The short question for consideration is as to whether the respondents are not liable to pay future interest as directed by the Sub Court, Alleppey for the period from 14-10-1975 to 14-1-1977. The contention of the petitioner receives full support from the judgment of Justice Narendran in Veluthakunju's case, (1979 Ker LT 501). The stand taken by the respondents, however, is that the said decision does not lay down the law correctly and that therefore the same requires re-consideration.
4. The Kerala Debtors (Temporary Relief) Act, 1975 (hereinafter referred to as ‘the 1975 Act’), was enacted as is clear from its preamble to provide temporary relief to certain debtors in the State of Kerala. Section 3 of the said Act states:
“3. Bar of suits and applications and other proceedings.— No suit for recovery of a debt shall be instituted, no application for execution of decree in respect of a debt shall be made and no appeal, revision petition or application for review against any decree or order in any such suit or application shall be presented or made in any civil or revenue court before the expiry of one year from the commencement of this Act or such longer period as may be specified by the Government by notification in the Gazette; and all such suits, applications, appeals and petitions instituted, made or presented before such commencement and pending at such commencement shall stand stayed for the said period.”
It is clear from this provision that no steps could be taken either for recovery of a debt or for execution of a decree in respect of a debt due from a debtor and no appeal or revision petition or application for review in respect of such proceedings could be filed before the expiry of one year from the commencement of the Act, or such longer period as may be specified by notification in the gazette. The section further provides that suits and other proceedings for recovery of debts that were already pending on the date of commencement of the Act stand statutorily stayed for the said period. The power under S. 3 was actually exercised, and the period specified in S. 3 was extended till 14th January, 1977. There is another important provision with which we are concerned viz., S. 7 which reads as follows:
“7. Interest not to accrue in respect of debts.— No interest shall accrue during the period mentioned in S. 3 in respect of a debt due at the commencement of this Act from a debtor entitled to the benefits of S. 3.”
It is clear from this provision that interest could not accrue against the debtor during the period mentioned in S. 3 of the Act. As the period mentioned in the section is from 14-10-1975 to 14-1-1977, by the operation of S. 7 no interest accrued in favour of the petitioner and against the respondents in respect of the decretal date. It is not and it cannot be disputed that the clear effect of S. 7 of the 1975 Act is to prevent the accrual of interest for the period mentioned in S. 3, meaning thereby that the creditor would not be entitled to claim interest for the said period.
5. In Veluthakunju's case, (1979 Ker LT 501), Justice Narendran has taken the view that the debtor if he has not claimed and secured the benefit under S. 7 when the 1975 Act was in force, would not be entitled to claim any relief on the strength of S. 7 of the said Act after the said Act ceased to be in operation. The learned single Judge has come to that conclusion holding that the 1975 Act is a temporary statute and that the rights conferred by S. 7 have not been saved by the repealing Act. The 1975 Act was repealed by the Kerala Debt Relief Ordinance, 1977 which in turn was replaced by the Kerala Debt Relief Act, 1977. Section 13 of the 1977 Act which provides for repealing and saving reads as follows:
“13. Repeal and saving.— (1) The Kerala Debtors (Temporary Relief) Act, 1975 (30 of 1975) and the Kerala Debt Relief Ordinance, 1977 (9 of 1977) are hereby repealed.
(2) Notwithstanding the repeal of the Kerala Debt Relief Ordinance, 1977 (9 of 1977), anything done or deemed to have been done or any action taken or deemed to have been taken under that Ordinance shall be deemed to have been done or taken under this Act.”
The learned single Judge has pointed out that the rights that accrued in favour of the respondents under S. 7 of the 1975 Act have not been saved by the 1977 Act which repealed the 1975 Act, following the principle laid down by the Supreme Court in Krishnan v. State of Madras, AIR 1951 SC 301 that the general rule in regard to a temporary statute is that, in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires. It was held that the respondents not having claimed and secured the benefit on the strength of S. 7 of the 1975 Act before 14-1-1977, they are not entitled to claim any relief on the strength of the said provision after the same ceased to be in operation. It appears to us that there is not (no) basis for the assumption made by the learned single Judge that the 1975 Act was a temporary statute. Though the relief sought to be granted by the said Act was temporary relief, in favour of debtors as defined in the Act, it is not possible to hold that the Act itself was a temporary statute. It is not an Act which could expire by efflux of time fixed by the statute. If the Legislature intended that the life of the statute should be for a limited period that period would have been specified in the Act itself. Section 3 of the 1975 Act provides for bar of suits and applications and other proceedings for a period of one year from the commencement of the Act. There is a further provision entitling the State Government to extend the period specified by S. 3 by means of a notification issued in the gazette. Even in regard to the period that could be specified by the State Government under S. 3, no limitation as such has been prescribed. Hence as long as the Act remained without being repealed, the power under S. 3 could be exercised extending the period by issuing an appropriate notification in the gazette. Such would not have been the position if the 1975 Act was a temporary statute. If the 1975 Act was a temporary statute, ordinarily there would not have been a need to repeal the same as it would have expired by efflux of time. But we find in this case that the 1975 Act was repealed by the Ordinance 9 of 1977 which was replaced by the 1977 Act. Though the relief granted by the Act was of a limited character, it is not possible to take the view that the 1975 Act was a temporary statute. Consequently, it follows that the view taken by the learned single Judge that S. 4 of the Interpretation and General Clauses Act which provides for the consequences of repeal is not attracted to the repealing of the 1975 Act by the 1977 Act is not correct.
6. But then it was contended that even if the 1975 Act was not a temporary statute as a different intention has been expressed in the 1977 Act that we must hold that the provisions of S. 4 of the General Clauses Act are not attracted. For this argument reliance was placed on the language of S. 13 of the 1977 Act. By S. 13, the 1975 Act as also the Kerala Debt Relief Ordinance, 1977 have been repealed. Sub-sec. (2) of S. 13 provides that notwithstanding the repeal of the Kerala Debt Relief Ordinance, 1977, anything done or deemed to have been done or any action taken or deemed to have been taken under that ordinance shall be deemed to have been done or taken under the Act. It was pointed out that whereas there is an express provision in this behalf in regard to action taken or deemed to have been taken under the repealed Ordinance of 1977, there is no such provision in regard to the repealing of 1975 Act. It was contended that if the intention of the Legislature was to save anything done or deemed to have been done or any action taken or deemed to have been taken under the 1975 Act, there would have been provision similar to sub-sec. (2) of S. 13 in respect of 1975 Act as well. It is necessary to point out that the provisions of S. 4 of the General Clauses Act get attracted whenever there is a repeal of any State enactment unless a different intention appears. Sub-sec. (2) of S. 13 which deals with the Ordinance, in our opinion, is not sufficient to draw the inference that a different intention appears from the language of S. 13 of the 1977 Act. A specific provision came to be made to save the right that had accrued under the Kerala Debt Relief Ordinance 1977, as what was being repealed or replaced was an ordinance which had a limited period of life like a temporary statute. No such provision was required to be made in respect of the repeal of the Kerala Debt Relief Act, 1975 as it was a permanent statute. It is also not possible to draw the inference that the Legislature intended to deny relief to debtors under the 1975 Act if they had not secured relief under the said Act during the period when the said Act was in force. Besides, it is necessary to point out that the declaration by S. 7 itself is enough to confer right on the debtor and nothing more was required to be done. The 1977 Act did not contemplate any proceedings to be taken for enforcement of 1975 Act during the period specified in S. 3. On the contrary S. 3 itself makes it clear that there is a bar to initiate proceedings during the period mentioned in S. 3. We have therefore no hesitation in taking the view that S. 4 of the General Clauses Act is applicable to the repeal of 1975 Act by the 1977 Act. Section 4(c) of the General Clauses Act makes it clear that any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed is saved and the same can be enforced even after the repeal of the enactment. Hence we have no hesitation in taking the view that the right conferred by S. 7 of the 1975 Act was of an enduring character and it vested in the respondents rights which could be enforced even after the repeal of 1975 Act. As it is not possible, with great respect, to agree with the view taken by Justice Narendran, the decision reported in Velunthkunju v. Sankaran, 1979 Ker LT 501 is hereby overruled.
7. For the reasons stated above this revision fails and is dismissed. No costs.
Revision dismissed.
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