DANDU SARRAJU Vs. YERRA SESHAYYA

JUDGEMENT

(1.) This case has been referred by our learned brother Mr. Justice Manohar Pershad to a Bench, as it raises some important questions of law as to the interpretation of section 13 of the Madras Agriculturists Relief Act (Act IV-of 1938). The facts leading to the present appeal are briefly as follows : 3 The first defendant executed a promissory note, Exhibit A-2 dated 19th October, 1950, in favour of the plaintiff for a sum of Rs. 5,000 payable with interest at the rate of Rs. 9 per cent, per annum annual compund. This promissory note was renewed on 18th November, 1952, under Exhibit A-1 for a sum of Rs. 6,032-9-0 by the first defendant as well as by his wife, the second defendant. The plaintiff's case is that as the first defendant requested the plaintiff to grant him time for payment, he insisted upon the second defendant also to join in the renewal and as such the second defendant bound herself as a principal debtor. The plaintiff sued for the recovery of the amount due under Exhibit A-1 deducting the amounts paid subsequently. The suit was accordingly laid for the recovery of Rs. 612-12-5 calculating interest at the statutory rate of 5 1/2 per cent, from 18th November, 1952, the date of the suit promissory note on the sum of Rs. 6,032-9-0 which is the principal sum due thereunder. The plaintiff pleaded that even apart from the question of the grant of time to the defendants for payments he is under law entitled to recover the outstanding amount of debt, calculating interest on the principal sum secured under the suit promissory note at the statutory rate of 5 1/2 per cent, after deducting the amounts paid.

(2.) The defendants pleaded that they are agriculturists and that the plaintiff is ' not entitled to the suit amount. They denied that the first defendant ever prayed for time for payment and that there was consideration for any sum in excess of the statutory rate calculated on the original principal due under Exhibit A-2 after giving credit to the payments made. They further pleaded that the suit promissory note is a mere voucher or acknowledgment of the amount due under the earlier promissory note. The trial Court held that the defendants were agriculturists, that the suit promissory note was a mere voucher and that it was not supported by consideration to the extent of the excess of interest included in the suit promissory note, Exhibit A-1, over and above the rate provided for under the Act. It accordingly decreed the suit for a sum of Rs. 64-15-2 with future interest thereon from the date of the suit, at 51 per cent, per annum. Both the plaintiffs as Well as the defendants were dissatisfied with the decree of the trial Court and preferred appeals, A.S.Nos. 14 and 28 of 1956 on the file of the Subordinate Judge's Court, Narsapur. The learned Subordinate Judge held, concurring with the trial Court, that Exhibit A-1 was executed by the defendants as a mere voucher in renewal of Exhibit A-2 and that A-1 is not supported by consideration to the extent of the excess interest included in it over and above that which is due according to Madras Act IV of 1938. In the lower appellate Court the plaintiff conceded that the debt was liable to be traced back to Exhibit A-2 so far as the first defendant was concerned. The main contest in the lower appellate Court centered round the question whether the liability of the second defendant who was also an agriculturist, could be traced back to the earlier promissory note, Exhibit A-2, dated 10th November, 1950. Following certain decisions of the Madras High Court and the Andhra High Court, the learned Subordinate Judge held that the debt cannot be traced back so far as the second defendant was concerned, to the promissory note Exhibit A-2 and accordingly passed a decree against the first defendant for a sum of Rs. 40-5-0 with subsequent interest at 51 per cent from 2nd October, 1955, till realisation and against the second defendant for the entire amount sued for. Aggrieved by this decree of the appellate Court, the defendants have preferred the above Second Appeal.

(3.) Mr. Satyanarayana, appearing on behalf of the appellants, contends that the debt is liable to be scaled down tracing it back to the principal of the earlier promissory note, dated 10th October, 1950. As his argument is based on the language of section 13, it is better to extract the section so far as is relevant for the purpose of his argument :