Raman Chettiar and Another vs Raman Chettiar and Others

Rajamannar, C.J.—The only question which it is necessary for us to decide for disposal of this appeal relates to the construction of the Accrual of Interest (War Time Adjustment) Act, which is Burma Act XI of 1947. This Act came into force on 25th February 1947 and the operative provision of this Act is contained in Section 3 which runs thus :

Notwithstanding anything contained in any other law for the time being in force or in any contract of loan or mortgage deed no interest shall accrue or he payable upon any loan or mortgage other than usufructuary mortgage made in Burma before the 5th day of May 1942, for or in respect of the period which falls within the 8th day of December 1941 and the date on which the provisions of Section 7 of the Court (Emergency Provisions) Act, 1943, cease to operate or are repealed.

Loan is defined in Section 2 as meaning a loan whether of money or in kind and includes any trans action which is in the opinion of the Court in substance a loan The present proceedings arise out of a suit filed by the Respondents to direct Defendants 1 and 2 to render true and proper accounts to them in respect of a deposit in the Defendants'' AR.M.A. firm in Danubyu by the first Plaintiff''s adoptive mother and to which, on her death, the first plaintiff became entitled, and which the first Plaintiff transferred in the name of his minor daughters, the other Plaintiffs, and to pass a decree in favour of the Plaintiffs for the amounts so found due, together with subsequent interest and costs of the suit. On 7th September 1943, a decree was passed in favour of the first Plaintiff for a sum of Rupees 12,053-3-9 with subsequent interest at 1� per cent per annum from 23rd August 1941 and costs. There was eventually a final decree also passed on 14th August 1944. There were payments from time to time of moneys towards this decree and for the balance remaining due the decree-holders filed an execution petition. Thereupon, the judgment-debtors who are the Appellants before us, filed an application purporting to be under sections 47 and 151 of the Code of Civil Procedure, objecting to the execution petition, alleging that they were not liable to pay interest for the period 8th December 1941 to 31st March 1947, because of the provisions of Burma Act XI of 1947, which we have just quoted above, and that a sum of Rs. 2,846-11-0, being the interest for the (sic) Period should be deducted from the claim of the decree(sic) The decree-holders inter alia urged that the Burma (sic) apply to interest due under decrees of Court. Subordinate Judge held that so long as the debt (sic) ma, the provisions of the enactment will apply even when the debt had merged into a decree whether as a result of compromise or otherwise. Applying therefore the said Act he held that the judgment-debtors were not liable to pay interest for the period 5th December 1941 to 31st March 1947. But he did not determine the actual amount of interest for the period, because he thought it was unnecessary. He cast the burden on the decree-holders to omit in any execution petition they may file the claim for interest for the above said period. Against this order of the learned Subordinate Judge the decree-holders filed an appeal to this Court, Civil Miscellaneous Appeal No. 376 of 1950, which was heard and disposed of by Mack J. The learned Judge allowed the appeal and set aside the order of the learned Subordinate Judge. He was inclined to agree with the view of the learned Subordinate Judge that even interest due under a decree would be governed by the provisions of Section 3 of the Burma Act, but he held that an executing Court could not wipe out an amount included in the decree by applying the provisions of that Act. He considered that it was necessary that on an application the decree should be amended on the analogy of amendment of decrees under Madras Act IV of 1938. The learned Judge further held that interest from the date of suit to date of decree is a matter solely for the Court to decide u/s 34 of the Code of Civil Procedure, and would not fall within the purview of Section 3 of the Burma Act. It is on these grounds that the learned Judge held against the judgment-debtor who have filed the present Letters Patent Appeal against that decision.

In our opinion the construction placed by the learned Subordinate Judge and Mack J., on the provisions of Burma Act XI of 1947, is not sound. The Act gives relief by way of wiping out interest only in respect of certain kinds of liability, namely, liability for interest which accrues or is payable upon any loan or mortgage other than usufructuary mortgage made in Burma before 5th May 1942. Unless, therefore, interest can be held to have accrued or have be (sic) payable upon any loan or mortgage the debtor Ann (sic) the benefit of Section 3 of the Act. Now in this (sic)be said that there is any interest which has (sic) has become payable upon any contract of (sic)

The relevant period is from 8th December 1941 to 31st March 1947. Now the preliminary decree v passed on 7th September 1943. That was in terms of a compromise and the figure of Rs. 12,053-3-9, is the figure greenhorn between the parties. How much of this sum represents berets, we are unable to ascertain. It is, therefore, impossible apply the provisions of the Burma Act in any event the he period between 8th December 1941 and 7th September 194.

What then about the interest accruing under the deer after the passing of the decree? Giving the plain meaning to the language of Section 3 of the Burma Act read with the definition of loan in Section 2 , we are of the view that interest which is due and payable under a decree of Court cannot be treated as interest accruing or becoming payable upon the loan or mortgage. The fact that the decree itself was passed in a suit based on a loan would not render the liability to pay interest under the decree, as directed by the Court, a liability flowing from the contract of loan. The award of interest from the date of decree to the date of payment is not because of the terms of any contract between the parties. It is because of the act of the Court in exercising the power conferred on it by Section 34 of the Code of Civil Procedure. Apparently this is the view taken by the Burma Court on this question. Mack J.''s attention was drawn to this but he was not prepared to agree with this view. We however think that this is the proper view to take of the provisions of Section 3 of the Burma Act. We agree with the order of Mack J., though not on the same ground given by the learned Judge, that the claim of the judgment-debtors founded on the provisions of the Burma Act is not sustain able. The appeal is dismissed but there will be no order as to costs.