SOMANCHI SODEMMA Vs. TANIKELLA NARAYANA MURTY

JUDGEMENT

(1.) This Letters Patent Appeal is directed against the order of our learned brother, Munikanniah, J. dated 18th January. 1963 made in A. A. O. No. 188 of 1959, whereby he has allowed the appeal and directed the lower Court to proceed with the enquiry for scaling down the debt in accordance with law. The Plaintiff-appellant, who is the sister of the Defendant-respondents, instituted a suit. O. S. No. 9 of 1946 on the file of the Subordinate Judge, amalapuram, fot specific performance of the contract of sale and for compensation of Rs. 2, 500/- for withholding the performance of the agreement and nondelivery of possession. The contention was that the defendants were indebted to the plaintiff on the foot of promissory notes executed by their father and renewed by them in acknowledgement of their liability from time to time. In lieu of it, they had agreed to convey in favour of the plaintiff properties valued at Rs. 7,000/- and to put her in possession thereof. This was under an un-registered agreement of sale executed on 21-1-1941. The defendants had failed to deliver possession and execute the document as undertaken by them. The plaintiff was, therefore, obliged to file a suit for specific performance and for damages for non-compliance of the terms of the agreement. In the alternative, it was prayed that the direction may be given to each and every defendant to pay a sum of Rs. 1,900/- each with subsequent interest with a charge on the estate of their late father. The suit was compromised on 17-10-1946, the appellant-plaintiff agreeing to give up her claim for specific performance and for damages. The defendants No. 1 to 3 and 5 agreed to pay a sum of Rs. 2,589-5-2 with interest at 6% per annum from the date of the compromise and the 4th defendant undertook to pay a sum of Rs. 610-11-0 at the same rate of interest. A decree followed in terms of the compromise. Later, the appellant-decree-holder filed E. P. No. 72 of 1957 against the 1st defendant for the recovery of a sum of Rs. 2589-5-2 with interest. The defendant-judgment-debtor pleaded that being an agriculturist he was entitled to the scaling down of debt in accordance wich the provisions of the Madras Agriculturists Debt Relief Act (Act No IV of 1938). The decree-holder resisted the petition contending that as the decree-debt was the result of compromise, it could not be scaled down and further that the claim of the judgment-debtor was barred by res judicata. The trial Court thereupon framed the following points for consideration :" (1) Whether the petitioner is entitled to claim that the decree debt in o. S. 9/46 is liable to be scaled down ? (2) If point 1 is in the affirmative, what is the amount of the decree debt as scaled down ?"the learned Subordinate Judge then proceeded to examine the merits of the respective claims and on a consideration of the material on record came to the conclusion that the debt was liable to be scaled down, under Section 13 of the madras Act IV of 1938 treating the amount fixed under the compromise as a starting point for scaling down. Aggrieved by this order, the judgment debtor came in appeal in C. M. A. No. 188 of 1959 and, as stated earlier, our learned brother, Munikannaiah, J. allowed the appeal and directed the lower Court to proceed with the enquiry and scale down "the dabe in accordance with law. It is against this order that the L. P. A. has been filed. The contention of the learned Counsel for the appellant is that in accordance with the terms of compromise in Ex. A-17, the appellant agreed to waive her claim for specific relief and compensation and accepted to take from the judgment debtors sums spacified in the compromise memo. Her claim was, therefore, altogether new and could not be traced back to any prior debt or scaled down under the provisions of the Madras Act IV of 1938. In other words, his argument is to the effect that by reason of the compromise the identity of the debt has been wholly lost, notwithstanding the fact that the earlier promissory notes were being renewed from time to time. The alternative reliefs sought in the suit, O. S. No. 9 of 1946,no doubt refer to the liability of the judgment debtors under the old debts but by the terms of the compromise, the appellant-decree holder had relinquished her claim for specific relief and for compensation and it is only for ariving at a figure fixing the individual liability of the judgment debtor that a reference was made to the pre-existing debts. The learned Counsel for the respondent, on the other hand, has urged that it is only the old debts which have been split up and re-imposed by the terms of the compromise. They are distinctly referable to the earlier debts, and the calculation memo filed by the appellant in fixing the individual liability clearly warrants that view. It will be convenient to refer to the relevant terms of the compromise decree in O. S. No. 9 of 1946 at this stage. It reads as under :1. "that the plaintiff do give up her claim in the suit for specific performance of contract of sale dated 21-1-41 in respect of the plaint schedule lands and for damages ; 2. that the sale deeds dated 19-9-1943 executed by the 1st defendant, 2nd defendant and late Viyyamma, severally in favour of the plaintiff are hereby cancelled ; 3. that the 1st defendant do pay plaintiff, for and in full satisfaction of the suit claim and costs in so far as he is concerned Rs 3,589-5-2. with interest thereon at 6 per cent per annum from this date till payment, and that the plaintiff be entitled to recover the same with a charge on the properties as per schedule 1 appended to the compromise petition, i. A. No, 1006 of 46 (attached to the decree) through process of court together with incidental costs. "the other terms imposed similar liabilites on 2nd, 3rd and 4th defendants. The figure of Rs. 2,589-5-2 has been arrived at with reference to the previous debts under Exs. A-26, A-29, etc. , in the following manner : (1) Amount of Ex. A-26 with interest accruing thereon upto the date of compromise ;. . Rs. 939-14-0 (2) Amount of Ex. A-29 with interest upto the date of compromise :. . Rs. 1,038-11-B (3) 1/5th share of the 1st defendant from out of the amount of the promissory note executed by late Viyyamma. . Rs. 395-11-6 (4) 1st defendant's share of the costs of the suit:. . Rs. 215-10-0 total : Rs. 2,589-5-2 it is apparent therefrom that the first three items distinctly relate to the liabilities under the old debts and to which a fresh liability of costs of the suit has been imposed. If, however, there has been no reference to the old debts and the decree in O. S. No. 9 of 1946 had been obtained as a result of compromise, the plaintiff giving up a part of the suit amount and the defendants agreeing to pay an amount by way of compensation or damages, the position would have been different and it could rightly be urged that the identity of the old debts had been completely lost. But, in the instant case, though a claim for specific performance has been relinquished and some of the documents executed in favour of the appellant have been cancelled, the alternative relief sought and recorded in the terms of compromise is distinctly referable to the revival of the old debts. It is to be noted that even at the time of compromise, the old debts under the promissory notes were still intact and were being reniewed from time to time. In these circumstances, it is difficult to hold that the reference to the pre-existing liability was merely for the purpose of arriving at a figure acceptable to the other side and that the compromise was a fresh contract. Referring to the case of Bomanjiv. The Secretary of State the learned counsel has urged that when the parties have entered into a formal contract, that contract has to be construed according to its own terms and not be explained by the antecedent communings which led upto it. It was a case under Bombay land Revenue Code in which certain assessments were sought to be imposed in respect of propery which had been granted in perpetuity to the ancestors of the plaintiffs in that suit. The lower Court chose to examine the correspondence which had taken place between the parties even before the grant was made. In this connection, it was observed that when a formal contract had been entered into, it should be construed according to its own terms and there was no necessity of interpreting it by the antecedent communing. The Act under which relief is sought, in the instant case, specifically provides for giving relief to the agriculturists by scaling down their old debts in certain circumstances. The Court has necessarily in providing the said relief to look into the antecedent debts and thus, the principle enunciated in the said ruling has no application. The learned Counsel for the appellant has next referred to the decisions in Syama Rao v. Hanumantha Rao and Modin Kutti v. Naryana Unni Moopili nair and also a Full Bench decision of the Madras High Court in Suryanarayana v. Venkataramana Rao. The learned Judge who disposed of the appeal has elaborately dealt with them and distinguished them on facts. We do not think it necessary to traverse the same ground once again, In the Full Bench decision, there had been settlement of accounts and a fresh document was executed by the debtor. That had the effect of discharging the interest on one hand and of appropriating payment on the other. It was held that such a transaction is outside Explanation 1 to Section 8 of Madras Act IV of 1938. The said decision has no direct bearing on the facts of the instant case, It, therefore, does not advance the case of the appellant. In the other two cases cited above, having regard to the facts of the case, it was found difficult to ascertain what amount of debt was to be scaled down after appropriating the amounts specified in the compromise. Therefore, the Courts held that in those circumstances it was improper to scale down the debt. No such difficulty is envisaged in the present proceedings, On the other hand, in the case of Narayanan v. Veeru it has been held that a decree on a compromise is substantially the same as a decree on any other contract and to the extent to which the compromise is a renewal ot a pre-existing debt, the decree has to be scaled down with reference to the original principal, The learned Counsel for the appellant seeks to distinguish it on the ground that it is not a renewal of a pre-existing debt, According to him, the compromise, which is based on certain relinquishments made by appellant, has changed the texture of the debt and the liability created under the compromise is de hors the pronote and in no circumstances it can be said to be a renewal of an old debt. No doubt, certain rights which had accrued to the appellant-plaintiff have been given up according to paras 1 and 2 of the compromise memo filed in O S. No. 9 of 1946 but these relinquishments seem to be based on undertaking by the respondent to make payments according to the pre-existing debts. Tt is not correct to say that the previous debts had been taken into consideration only for assessing the measure of the liability. The manner in which the individual liability of the defendant has been fixed is a clear indication that it was meant to revive the old debts under a new garb the amounts under Exs. A-26 and A-29, the previous pronotes have been, specifically mentioned in the calculation memo. Thus, the identity of the debt is not lost though it has been embodied in a fresh document, in the case of Sriramulu v Ravuri Nagaiah l a Full Bench of this Court held that when the petitioner is entitled under Sec 13 of the Madras Agricult-urists Relief Act to have the debt scaled down, the debt can be traced back to origin irrespective of whether it is renewed or included in a fresh docu-ment in favour of the same creditor or a different person or whether the debtor is the same or not So that, the mere fact that a fresh document has been ex-ecuted does not amount to novation of contract. Any change or alteration in the debtor or creditor would not be sufficient to take away the case from explantion III to Section 8 of the Madras Agriculturists Relief Act, 1938. The same view was taken by a Bench of the Madras High Court in Srinivasa pillai v. Muthayya Pillai 2 wherein it has been laid down that so long as the identity of a debt can be traced, any change or alteration would not take the case away from the Explanation. The real test, in our opinion, to ascertain whether the compromise decree pertains to the earlier debts or amounts to a fresh liability is whether an action on the original pro-notes can now be maintained. Obviousy the answer is in the negative, Therefore, it is difficult to hold that the identity of the debt has been lost and the compromise decree is nothing but an attempt to circumvent the provisions of the Agriculturists Relief Act. In that view, the conclusion of the appellate Judge does not call for interference. The next point that has been urged by the learned Counsel for the appel-lant is that the respondent having derived benefit from the terms of the compromise could not turn round and claim for the scaling down of debt. According to him, the respondent is estopped from doing so, but it is to be noted that this cont ention was not raised before the appellate Court. Apart from that, there can be no estoppel against a Statute The respondent is claiming only the relief which has been provided under the Act to the indebted agricul-turists. Therefore, the contention of the learned Counsel that the respondent is estopped from putting forward his claim for scaling down the debt is not entitled to any weight. No other point has been urged before us, We, therefore, hold that the direction given by the appellate Court to make the necessary enquiry and proceed to scale down the debt is in accordance with law. The appeal is, accordingly, dismissed with costs. T. N.