NIMMAKAYALA JAGGANNA NAIDU Vs. YARLAGADDA AMMANNAMMA

JUDGEMENT

(1.) This appeal is brought against the Order of the Subordinate Judge, Amalapuram, to scale down the debt in a particular manner. The salient facts of the case are these : The respondent recovered judgment for a large sum of money in a suit founded on a mortgage against the appellants. The mortgage was created by the appellant in favour of the respondent for a sum of Rs. 12,500. The mortgagee retained in her hands a part of the consideration to discharge the debts due by the mortgagor. One of such debts was covered by a promissory note, Exhibit P-4 for a sum of Rs. 1,200 executed in favour of the father of the respondent on 15th May, 1932. The mortgagor's family was indebted to the father of the respondent in a large sum of money, to evidence which a number of promissory notes were executed one of which was Exhibit P-4. After the Madras Agriculturists' Relief Act (IV of 1938) came into operation, the appellant applied to the Subordinate Judge, Amalapuram, to scale down the decree. The debt was scaled down under section 8 of the Act. On appeal, the High Court of Madras modified the decree by scaling it down under section 9. While matters stood thus, the Madras Agriculturists' Relief Act, 1938, was amended by adding the words "whether by the same or a different debtor and whether in favour of the same or a different creditor" to Explanation III of section 8. The appellant taking advantage of this amendment sought a further scaling down of the debt contending the Exhibit P-4 in favour of the respondent's father should be traced back to the original borrowing. While this petition was pending in the trial Court, Explanation HI was further amended which substituted the following Explanation III :-

(2.) In spite of these amendments the trial Court thought that the appellant could not get the relief prayed for as that promissory note would not fall within the ambit of the new Explanation. In the result, the petition was dismissed. It is this view of the Subordinate Judge that is assailed before us now. The question that calls for consideration is, whether the appellant could invoke the Explanation ; in other words, whether Exhibit P-4 could be regarded as having been included in a fresh document, and whether the mortgagee while taking a mortgage was acting on behalf of the promisee under Exhibit P-4 or in his interest or of any other person acting on his behalf or in his interest. The circumstances that have prompted the appellant to claim the benefit of this Explanation are these. Although the mortgagee undertook to pay off the debt under Exhibit P-4 he had not in fact discharged that debt. Some months after the execution of the mortgage, the brother of the respondent on whom the estate of the payee under Exhibit P-4 devolved endorsed the promissory note in favour of the mortgagee and later on returned the promissory notes to the mortgagor with the endorsement of discharge thereon. Having regard to these facts, it is urged by the learned Advocate-General that the old debt, i.e., the debt due to the father of the respondent, was included in the mortgage as the debt was not actually discharged by the mortgagee. So long as the debt was not extinguished, it should be deemed to have been included in the fresh document and consequently the debtor could have recourse to this Explanation, proceeds the argument of the Advocate-General. We do not think we can accede to the proposition of the Advocate-General. We are inclined to the view that when the mortgagee was directed to discharge the debt of Veeranna, the payee under Exhibit P-4, the debt was not included in the fresh document. Having regard to this arrangement, the old liability is put an end to. Thus the identity of old debt is destroyed. It is only if that identity is preserved that the transaction could fall within the connotation of the expression that the debt has been " included in a fresh document".

(3.) There is also another difficulty in assenting to the proposition formulated on behalf of the appellant. Another requisite should be satisfied to enable the debtor to gain the advantage of this section, namely, that the payee or the mortgagor should be acting on behalf of the old creditor or in his interest. It is difficult to postulate in this case that the respondent acted on behalf of the father when she took the mortgage or that she did it in his interest. There is absolutely no material which could support any such plea. That apart, the respondent was at that time a minor and as such could not have acted on behalf of the old creditor.