BUDIREDLA RAMAMURTI Vs. MATTA SITARAMAYYA

JUDGEMENT

(1.) This Civil Revision Petition raises the question of the power of a Court to scale down a compromise decree under Section 8 of the Madras Agriculturists Relief Act, IV of 1938.

(2.) The relevant facts may be briefly stated. The petitioner is the judgment- debtor. He and the respondent had dealings on account starting in 1922. On 26th March, 1928, the petitioner executed a promissory note in settlement of that account. On 3 April, 1928, he executed a second promissory note for a fresh advance. On 20 July, 1929, he executed a promissory note for Rs. 4,600 comprising the amounts due on the two previous notes and a small amount in cash advanced at that time. It was alleged that on the 27 September, 1930, there was an arrangement whereby the petitioner undertook to pay the amount due on this promissory note within a, given time or to execute a mortgage over certain properties. No payment having been made and no mortgage having been executed, the respondent filed a suit O.S. No. 44 of 1931 on the promissory note of 1929, claiming a charge over the properties covered by the alleged agreement to mortgage. He also obtained an attachment before judgment of the properties in respect of which the charge was claimed. On 8 August, 1932, a decree was passed in terms of a compromise. The compromise recited that the transactions between the parties had been examined by mediators who had decided that the whole of the debt claimed should be recovered from the family properties of the defendants, and that the defendants had agreed that the suit debt, costs and subsequent interest calculated at Rs. 7,150 in all should be a charge on the properties mentioned in the plaint and it was agreed that the defendants were to be given time till 1 October, 1932, to pay the amount so settled. It is to be noted that this compromise does not appear to have dealt with matters extraneous to the suit and that it provided for the payment of the full amount claimed by the plaintiff with interest. The lower court following the decision of Pandrang Row, J., in C.R.P. No. 86 of 1939 held that in scaling down the decree, the starting point must be the decree itself and that it was not open to the Court to go behind the compromise and treat the original debt as the debt which is to be scaled down.

(3.) Now, we have held in a very, recent decision, Ramaseshayya V/s. Kutumba Rao (1940) 2 M.L.J. 235 that in the simple case of a decree on a debt, the Court must, with reference to the terms of Section 8(1) of Act IV of 1938 look to the debt upon which the decree is passed and not regard the decree itself as the debt which has to be scaled down. A decree embodying a compromise is in one respect different from a decree merely directing payment of the debt which forms the subject- matter of the suit. The effect of the compromise is the substitution of a new contract for the contract sued on, which new contract itself forms the basis of the decree. When we come to apply Secs.8 and 9 to such a decree, we must have regard to the provisions of Section 7 which lays down that Notwithstanding any contract or decree of Court to the contrary, all debts payable by an agriculturist at the commencement of this Act, shall be scaled down in accordance with the provisions of Chapter II of the Act.