Umamaheswaram, J.:— This is an appeal directed against the Judgment and Decree of the Subordinate Judge of Amalapuram, in O.S No. 66 of 1954. The suit was filed for recovery of a sum of Rs. 23,882-15-1, as against defendants 1 to 4 and 8 personally and defendants 1 to 7 from out of the joint family properties. The Court below exonerated defendants 5 to 7 and passed a decree as against defendants 1 to 4 and 8 for a sum of Rs. 16,436-8-7 with interest at 3½ per cent, from the date of suit till payment The learned Subordinate Judge further directed that the decree might be executed against the 8th defendant only after the plaintiff exhausted his remedies against defendants 1 to 4. The plaintiff has consequently preferred the appeal in so far as his claim was disallowed.
2. Four questions arise for consideration in the appeal: (1) whether the liability was incurred on 3rd November, 1951, when the accounts were settled or whether the liability was incurred as and when the monies were borrowed from the plaintiff; (2) whether the Subordinate Judge was right in disallowing interest from the several dates of borrowing at 5½ per cent; (3) whether the Court below was justified in awarding interest at 3½ per cent from the date of suit till the date of realisation; and (4) whether the Court having passed a joint and several decree against the defendants 1 to 4 and 8 had a discretion to direct the plaintiff to exhaust his remedies against defendants 1 to 4 before proceedings against the 8th defendant? Section 13 of the Madras Agriculturists Relief Act, hereinafter referred to as ‘the Act’, provides that in any proceeding for recovery of a debt, the Court shall scale down all interest due on any debt incurred by an agriculturist after the commencement of the Act so as not to exceed a sum calculated at 5½ per cent, per annum simple interest. The first question that arises for decision is whether the debts by the defendants were incurred on the respective dates of borrowing or when the accounts were settled between the parties as on 3rd November, 1951. The expression ‘incurred’ is used not only in section 13 but also in sections 8 and 9 of the Act. The meaning of the word ‘incur’ as given in the Webster's New International Dictionary is to “render liable or subject to, entail”. In Bouvier's Law Dictionary, the meaning is given as follows: “To have liabilities cast upon one by act of parties or operation of law”. We have no doubt whatsoever that the liability is incurred only when the amount is borrowed and not when the accounts are settled or when any document is executed is pursuance of the settlement of accounts.
3. The meaning as given in Bouvier's Law Dictionary was adopted by a Bench of the Madras High Court in Mottai Meera v. Chinna Shaik Abdul Kadir Rowther . 1939 1 M.L.J 528.. Varadachariar, J., delivering the judgment of the Bench held that the word ‘incurred’ in the opening sentence of section 9 no doubt suggested the idea of a liability voluntarily incurred but the terms of clause 1 of that section seemed to indicate that the section referred not only to contractual liability, but even to liabilities arising under law, custom or decree of Court. Reference was next made to the decision in Govindaraja Nadar Namadevar Reddiar2. The learned Judges therein held that:
“the literal and plain meaning of the words ‘where a debt is incurred by a person’ seems to us to mean a debt which has been incurred.”
4. The two decisions referred to supra do not in any way deal with the question that directly arises for consideration in the instant case. As stated by us already, we are quite clear that the liabilities must be held to have been incurred as on the respective dates of borrowing by the defendants.
5. Under the terms of section 13 of the Act, the plaintiff is entitled to interest at the rate of 5½ per cent from the date of each borrowing. The respondents herein are entitled to counter-interest on the several payments made by them at the same rate.
6. The third question that arises for consideration is whether the Subordinate Judge was right in allowing interest at the rate of 3 per cent, from the date of suit till the date of payment. That depends upon an interpretation of the terms of section 34, Civil Procedure Code. Section 34, (1) Civil Procedure Code, enacts:
“Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit (with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such prnicpal sum) from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit.”
7. The learned Subordinate Judge, who, awarded interest at 3½ per cent, from the date of the suit till the date of payment, has given no reasons whatsoever for fixing the rate of interest at 3½ per cent. It is clear from the terms of section 34(1), Civil Procedure Code, that the maximum interest that might be awarded is 6. In proper cases, the Court has discretion to award a lesser rate of interest. But the Court must exercise a sound judicial discretion in so allowing or disallowing interest: Vide Abdul Hussain v. Seth Fazal Bhai. In Hakim Rai v. Ganga Ram, Lord Romer refused to interfere with the discretion exercised by the High Court in awarding interest on the sum found due at the rate of 6 per cent, per annum from the date of the institution of the suit until realisation. As the Subordinate Judge has given no reasons whatsoever for fixing the rate of interest at 3½ per cent, we are unable to hold that he exercised his discretion soundly or wisely. The rate of interest fixed under the Act in section 13 is 5½ per cent. We think that we might adopt that rate and award 5½ per cent, on the principal sum from the date of the suit till the date of realisation.
8. The last question that falls to be decided is whether the Subordinate Judge acted rightly in directing the plaintiff to proceed against the 8th defendant after exhausting his remedies as against defendants 1 to 4. The case of the plaintiff is that the family of defendants 1 to 7 and the 8th defendant were the partners in rice mill business and that the amounts were borrowed by defendants 1 to 4 and 8 for the purpose of the partnership. It appears from the accounts produced by the plaintiff that the 8th defendant has signed in the account books at the time of the opening of accounts as also at the time of the settlement of accounts. The plaintiff examined himself as P.W 1 and deposed that the 8th defendant was a partner along with the family of defendants 1 to 7. In the written statements filed by the 1st and 8th defendants, it was stated that the 8th defendant was only a surety. This case was spoken to by the 1st defendant examined as D.W 2. The 8th defendant did not enter the witness-box and say that he was only a surety. The 1st defendant, who admitted that there were accounts in regard to the mill business, has not produced them to establish the fact that the 8th defendant was not a partner and that he was only a surety. We therefore agree with the contention of Sri. Poorniah, the learned Advocate for the appellant, that there should be a joint and several decree as against defendants 1 to 4 and 8. The Subordinate Judge having accepted the contention of the appellant and passed a joint and several decree had no discretion left in him to direct that the plaintiff should exhaust his remedies as against defendants 1 to 4 and to proceed against the 8th defendant last. Sri T.V Veerabhadrayya, the learned Advocate for the respondents, invited our attention to the terms of Order 20, rule 11, Civil Procedure Code, as conferring such discretion on the Subordinate Judge. Order 20, rule 11(1), Civil Procedure Code, provides that the Court may, at the time of passing a money decree, order that payment of the amount decreed shall be postponed or shall be made by instalment. No authority has been placed to show that under the provisions of Order 20, ruel 11(1), Civil Procedure Code, the Court is entitled to postpone the payment of the decree amount by one of the defendants till the decree is executed as against the other defendants who are jointly and severally liable. Moreover, no reasons were given by the Subordinate Judge as to why he inserted such a provision in the decree. In the result, the decree of the lower Court is modified as aforesaid. The appellant will be entitled to costs to the extent to which he has succeeded in this Court. The order for costs made in the Court below will stand. The learned Advocates for the appellant and respondents will file a joint memo, as to the amount payable by the respondents to the appellants as per the directions given above within one week from today.
9. This appeal having been set down to this day, for being mentioned, the Court made the following:
10. Order:— A memo, of calculation is filed by the learned Advocates on both sides. According to the memo, a sum of Rs. 17,411-6-0 is due on as 8th September, 1952. It will carry interest at 5½ per cent, per annum for that date till the date of payment.
11. Decree modified.