BALASUBRAMANIA CHETTY AND ORS. Vs. WALAJABAD DHANASEKARA SASWATHA NIDHI LTD. BY ITS SECRETARY P.R. SUBRAMANIA NAIDU AND ANR.

JUDGEMENT

(1.) THIS appeal arises out of a suit filed by respondent 1, a Nidhi on the foot of to two mortgages executed in its favoer one by defendant 1, Natesa Chetti and his younger brother Thangavelu Chetti since deceased, on 25 -7 -1929 for Rs. 1000 (Ex. P -1) and the other by Natesa Chetti for himself and as guardian of his son defendant 2 then 8 months old and Thangavelu Chetti on 30 -3 -1931 for Rs. 2000 (Ex. P -2). The plaintiff prayed for a mortgage decree for Rs. 5755 -12 -0 in the aggregate. Defendant 1's principal contention was that the suit debts must be taken to have been completely discharged by an order passed under Section 10 (2), Madras Debt Conciliation. Act, 1936, by the Debt Conciliation Board, Chingleput on 18 -4 -1940. He also claimed a deduction of Rs. 480 being the principal amount of 30 shares held by him in the plaintiff Nidhi and relief under Madras Act, 4 [iv] of 1938. Defendant 1's written statement was adopted on behalf of defendants 2 and 3, the minor sons of defendant 1, by their mother and guardian ad litem Defendant 3 was born sometime in 1942. On 14 -12 -1933, Thangavelu Chetti executed in favour of Natesa Chetti what is termed a release deed but what is in substance a deed of partition whereby the properties covered by the suit mortgages except suit items 1 and 2 were allotted to defendant 1 while those two items weretaken by Thangavelu Chetti. It was provided, that the suit mortgages were to be discharged by defendant 1. Thangavelu Chetti died in July or August 1942. Defendants 4 to 6 are his daughters who were obviously impleaded by the Nidhi to protect itself against a possible contention that the release deed was not real or not acted upon. Defendant 7 took a mortgage of items 1 and 2 from Thangavelu Chetti and after the latter's adjudication as an insolvent purchased the equity of redemption in them from the Official Receiver of Bangalore. Defendant 8 is a subsequent mortgagee from defendants 1 and 2 under a mortgage of 20 -6 -1934 and defendants 9 to 11 are lessees of portions of the hypotheca.

(2.) THE lower Court upheld the contention based upon the provisions of the Madras Debt Conciliation Act to the extent of defendant 1's share which it fixed at 1/6th but rejected it so far as the remaining 5/6th share is concerned. It refused to give credit in respect of the amount of Rs. 480 as claimed on behalf of defendants 2 and 3 but scaled down the debt to a certain extent under Madras Act 4 [IV] of 1938. In the result it passed a mortgage decree for Rs. 3702 -8 -0 and proportionate costs, interest on Rs. 3000 at 61/4 per cent, per annum from date of suit to date of decree and interest at 6 per cent, per annum subsequent to decree against a 5/6th share in the hypothecs which according to it represents the interests of defendants 2 and 3 and of Thangavelu Chetti.

(3.) THE plain effect of Section 10 (2) consequent upon the admitted failure of the plaintiff to file the required statement would seem to be to discharge the debt so far as the applicant or those represented, by him are concerned. But this is sought to be denied by the respondent by two lines of argument. The first is that Section 10 (2) was amended by Madras Act, 9 [Ix] of 1943, with retrospective effect. By Madras, Act 9 [Ix] of 1943 the following sub -section was substituted for the original Sub -section (2) of Section 10: