PAYIDI VENKATASUBBAYYA Vs. GHADIYAM SESHAREDDI

JUDGEMENT

(1.) This Civil Miscellaneous Second Appeal has been referred to a Bench by Satyanarayana Rao, J. The facts that gave rise to this appeal may be briefly stated. The appellant's father borrowed a sum of Rs. 100 from the father of the respondent under a promissory note about 35 years ago. Subsequently, there were a number of renewals of the promissory note. On nth May, 1929, a sum of Rs. 200 and on 1st October, 1932, a sum of Rs. 100 were paid towards the promissory notes. After the death of the respondent's father there was a partition in the family between the respondent and his brother some time prior to 1933 and the suit promissory note and another promissory note fell to the share of the respondent. After the partition, the appellant,, who is the son of the original executant, renewed the promissory note from time to time in favour of the respondent. The suit promissory note Exhibit A-7 dated 26th March, 1937, was executed by the appellant in favour of the respondent. On the said promissory note, the respondent filed a suit O.S. No. 142 of 1943 and obtained a decree therein. The appellant filed I.A. No. 1347 of 1949 under section 19 of the Madras Agriculturists' Relief Act for scaling down the decree debt on the ground that he was entitled to trace back the debt to its origin and if so traced and the amounts paid by him were given credit towards the promissory note, no amount would be due from him.

(2.) The learned District Munsif accepted his contention but the learned Subordinate Judge, on appeal, modified the order of the first Court, relying upon the decision of, Hanumayya v. Nayudamma. He held that, in view of that decision, the debtor cannot trace back" his debt beyond the promissory note executed by the appellant in favour of the respondent, i.e., Exhibit A-6 dated 27th March, 1934. The appellant preferred this appeal against the order of the learned Subordinate Judge. The question raised in this appeal is whether Explanation III to section 8 of the Madras Agriculturists' Relief Act governs the facts of this case. Explanation III reads :-

(3.) The question is whether the respondent, to whose share the debt was allotted in the partition, is the same creditor within the meaning of the Explanation. In Hanumayya v. Nayudamma1, one of us, as a Judge of the Madras High Court, held that neither Explanation IV nor Explanation III applied to similar facts in that ease. But subsequently a Division Bench of this Court of which one of us was a member reconsidered the correctness of that decision and pointed out that in that case the question, namely, whether the assignee of a creditor would be a creditor within the meaning of that Explanation was neither raised nor considered. That question was expressely raised and considered by the aforesaid Division Bench in C.M.A. No. 396 of 1948. In that, case, a debt was assigned by the father in favour of his son and the subsequent promissory notes were executed or renewed in his favour. In dealing with the question whether the assignee was a creditor, the following observations were made : "At first sight 'Explanation III appears to make a distinction between the case of a debtor and that of a creditor. In the case of a debtor, it expressly applies the same rule to his heirs, legal representatives or assigns. But, in the case of a creditor, those three categories of persons are omitted. It is, therefore, argued that heirs, legal representatives or assigns are not affected by the said Explanation.