N.A. Visalakshi Achi vs Mayalagu and Another

Rajagopala Ayyangar, J.—This second appeal raises for consideration the proper construction of Section 9(A), Sub-section (9)(1) of the Madras Agriculturists'' Relief Act and has been placed before a Bench by an order of Krishnaswami Nayudu, J.

The Plaintiff is the Appellant before us. A usufructuary mortgage was executed in his favour on 17th August 1945, for a sum of Rs. 2,000.

Apparently the mortgagee entered into possession of the property immediately thereafter. On 5th August 1947, the mortgaged property was leased back to the mortgagor now represented by the Respondents for a period of one year (fasli 1357), on terms of his delivering 30 kalams of samba paddy of 54 measures per kalam.

Without any writing therefore ,the lease was renewed for another year--fasli 1358. The lessee, however, did not pay the rent for either 1357 or 1358 and the present suit was filed for the recovery a sum of Rs. 1,303-11-10, being the value of paddy agreed to be delivered as rent for faslis 1357 and 1358 with interest at six per cent per annum from the due dates. The plea of the Defendant was twofold. The first was that as they were agriculturists entitled to the benefits of Act IV of 1938, the debt should be scaled down in accordance with the provisions of Section 9(A), Sub-section 6, corresponding to the present Sub-section 9. The second was that the rent for fasli 1357 had been paid up and discharged. The trial Court held against the Defendants in respect of both these defences. It found that no portion of the rent for fasli 1357 had been paid up and also that the Defendants were not entitled to the relief u/s 9(A) by reason of the usufructuary mortgage having been executed after Act IV of 1938 was enacted. It passed a decree, however, for Rs. 922-4-3, which figure was reached by disallowing interest prior to the suit. The decree allowed the Plaintiff interest at 5 1/2 per cent per annum from the date of the plaint and costs. The Defendants filed an appeal to the Sub-Court of Devakottai raising only the question of their claim to a scaling down under the Madras enactment and did not further agitate their plea as to discharge. The learned Subordinate Judge rejected the contention of the Plaintiff that usufructuary mortgages executed after 22nd March 1938 would not be governed by Section 9(A)(9), and applying its provisions reduced the claim to 5 1/2 per cent of the principal amount of Rs. 2,000, that is, Rs. no per year and passed a decree for Rs. 220. It is from this judgment and decree of the Subordinate Judge that the present second appeal has been filed by the mortgagee-lessor.

The appeal came on before Krishnaswami Nayudu, J., and before him learned Counsel for the Appellant relied on the decision of Subba Rao, J., in T.V. Srinivasaraghava Aiyangar Vs. M. Narasimha Mudaliar, and contended that as the suit was merely for the recovery of rent and not one for redemption, the provisions of Section 9(A), Sub-section (9) could not be availed of by the mortgagor. On the other hand, learned Counsel for the mortgagor-Respondents urged that by reason of the decision of a Bench in A. Sankara Aiyar Vs. Yagappan Servai, and the observations contained in another Bench decision in Venkatanarayana Rao v. C. Savansukha (1954) 2 M.L.J. 47, the correctness of the ruling of Subba Rao, J., should be reconsidered. In view of this argument, Krishnaswami Nayudu, J., directed the appeal to be posted before a Bench.

We are clearly of the opinion that the two Bench decisions referred to above do not affect the correctness of the decision of Subba Rao, J., and do not, in fact, bear upon the point decided by that learned Judge. The question that was mooted in T.V. Srinivasaraghava Aiyangar Vs. M.

Narasimha Mudaliar, was whether the scaling down provided for by Section 9(A), Sub-section (9)(1) of the Madras Agriculturists'' Relief Act was available to the mortgagor-lessee in every suit for the recovery of the rent due, or whether the relief provided was confined to suits for redemption, wherein the entire relationship between the mortgagor and the mortgagee was being put to an end to for ever. The learned Judge after a consideration of the relevant provisions of Section 9(A) and the scheme of the enactment came to the conclusion that it was only to a suit which involved redemption of the mortgage that these provisions could be applied. The question of the correctness of this decision of Subba Rao, J., came up before one of us in Civil Revision Petition Nos. 1109 and 1110 of 1953. The facts of that case were practically identical with those of the present and the position was thus formulated:

The argument of Mr. Kesava Ayyangar, learned Counsel for the Petitioners, is that this [Section 9(A), Sub-section 9(a)(1)] is an independent provision which treats all rents due from a mortgagor where a usufructuary mortgage leases back the property to the mortgagor, as interest due on the mortgage money with the result that the provisions of Section 8 or Section 9 read with Section 12 or Section 13 of the Act apply to the scaling down of such rent viewed as interest. On the other hand, in the decision of this Court, above mentioned, Subba Rao, J. has held that the scaling down effected by this sub-section is available to a mortgagor-lessee only in cases where he files a suit for redemption, and that this apart, the provision is inapplicable to cases where a mortgagee files a suit for the recovery of the rent stipulated under the lease-back.

The language of the different sub-sections of Section 9(A) and the scheme underlying the provisions were again analysed and the conclusion was stated in these terms:

The above analysis makes it clear that Sub-section (9) is really an analogue to Sub-sections 3 to 6 in cases where there is a lease-back. Just as the earlier sub-section apply only for the determination of the amounts payable to a mortgagee to enable redemption to be effected, Sub-section 9 also is similarly designed and operates to achieve a similar purpose. The machinery therefore of the scaling down provision can only apply for the determination of the sum payable for redemption and the words of the provision referring to the rent payable to the mortgagee as interest on the principal amount of the mortgage debt cannot be divorced from this scheme and invoked as an independent provision for scaling down rents. This conclusion is reinforced by the use of the expression the "entire debt" at the end of Sub-clause (i).

We have heard no argument to throw doubt upon the correctness of the reasoning in this judgment or the conclusion reached. Learned Counsel for the Respondents relied on a decision in A. Sankara Aiyar Vs. Yagappan Servai, for, the position that the Court should go behind the debt sued on in order to find out its origin and that if that debt really represented interest, the Defendant was entitled to a scaling down on that footing. This, however, is wholly irrelevant for the consideration of the point involved in the decision of Subba Rao, J. There can be no doubt that if Section 9(A), Sub-section (9)(a)(i) stood as an independent provision, the scaling down would be as contended by learned Counsel for the Respondents which is all the assistance that the decision in A. Sankara Aiyar Vs. Yagappan Servai, affords him. As we have pointed out earlier, Section 9(A), Sub-section (9)(a)(i) is not an independent provision but in the context and setting in which it appears is designed for the determination of the amount payable on redemption.

It was conceded before us that the decision in Venkatanarayana Rao v. C. Savansukha (1954) 2 M.L.J. 47 did not have any bearing upon the point arising for consideration in the present appeal.

If matters stood as they were when this litigation commenced or even when this appeal was filed, there could be no doubt that the judgment of the learned District Munsif would have to be restored though for quite different reasons. In passing we might mention that the District Munsif was wrong in holding that the suit mortgage of August 1945 was not governed by the provisions of Madras Act IV of 1938 and that the Subordinate Judge was right in the view that he took as regards applicability of this enactment as amended.

Almost at the close of his arguments seeking to support the interpretation of Section 9(A)(9) of the Madras Agriculturists'' Relief Act which was upheld by the Subordinate Judge, learned Counsel for the Respondents brought to our notice that subsequent to the decision of the lower appellate Court, his client had filed a suit for redemption of the suit mortgage which had been decreed. We adjourned the proceedings to enable the Respondents to place before us the judgment in the redemption action so that we might consider the decree to be passed on the claim for rent for faslis 1357-1358 in the light of that decree. We have now been furnished with copies of the judgment in the Respondents'' suit Original Suit No. 364 of 1951 on the file of the District Munsif's Court, Devakottai, for the redemption of the suit mortgage and of the judgment of the Subordinate Judge of Devaksttai in Appeal Suit No. 71 of 1952 on appeal from that decree. These establish that subsequent to the decision of the lower Appellate Court in the present case, a sum of Rs. 1,500 had been paid to the mortgagee by the purchaser of one of the items of the mortgaged property. The two Courts dealing with the redemption suit have further held that the principal amount under the usufructuary mortgage should be statutorily deemed to have been written down to Rs. 1,600 by virtue of the subsistence of the mortgage from 1945 to 1951. It is also made out that the balance of Rs. 100 has been paid by the mortgagor and the mortgage has been redeemed and the judgments make it clear that all other claims between the mortgagor and the mortgagee have been decided except the claim for rent for faslis 1357-1358, which was excluded from the scope of the suit as being the subject-matter of this second appeal pending in this Court. It is also now admitted that the decree in Appeal Suit No. 71 of 1952, on the file of the Sub-Court, Devakottai, has become final and that no second appeal has been filed therefrom.

In view of these facts which transpired subsequent to the decision of the learned Subordinate Judge now under appeal, it is clear that the amount of rent due for faslis 1357-1358 has to be scaled down by applying the provisions of Section 9(A)(9) of the Agriculturists'' Relief Act, by allowing interest at 5 1/2 per cent per annum u/s 9 read with Section 13 of the Act.

In the earlier part of our judgment, we have held that the Appellant-lessor was entitled to a decree for the full amount of the rent stipulated by the parties under the contract on the ground that the present suit not being one for redemption the scaling down provisions do not apply. If the decree for the full amount were executed and the sum recovered, the amount thus received would be taken into account at the time of redemption, when of course the scaling down provision would be applied and any excess received over any sum properly payable as interest--that is calculated at 5 1/2 per cent per annum would go in reduction of the principal amount due under the mortgage. This is the scheme of Section 9(A)(9) of the Act, and as in the present case the entire sum due to the mortgagee for redemption has been paid off except in relation to the rent due for faslis 1357-1358. The allowance of any sum in excess of Rs. 110 per year would lead merely to further proceedings becoming necessary to scale down this decree. In order, therefore to obviate multiplicity of proceedings we propose to deal with the claim for rent as if it arose in a suit for redemption and pass a decree only for such amount as the mortgagee would be entitled to, in such an action. There can be no dispute that viewed in this light, the sum due would be only Rs. 110 per year which is the same which has been decreed to the Appellant by the learned Subordinate Judge.

The result is that the decree of the learned Subordinate Judge has to be affirmed though on very different grounds The appeal will, therefore, stand dismissed and the judgment of the lower appellate Court affirmed.

In regard to costs, as the Appellant was justified in coming up to this Court and as it is only by virtue of the proceedings instituted after the second appeal was filed that the Appellant's rights have been cut down, we consider that this is a proper case in which there should be no order as to costs in the second appeal.