GOPALA MALLER Vs. VALLITHOKUVAYIL VELLOTH KRISHNAN

JUDGEMENT

(1.) This civil revision petition arises out of an order under Section 19 of Madras Act IV of 1938. There is no serious dispute as to the facts. The 1 defendant here and another person were indebted under a contract which was anterior to 1932. That debt ripened into a decree of 1933. To discharge that decree a fresh promissory note was executed by the 1 defendant (one of the two judgment- debtors) and by the 2nd defendant who was not apparently concerned in the earlier debt. Both the defendants are agriculturists and they applied under Section 19 to scale down the debt. The lower Court has scaled down the debt as against both the defendants on the basis of its being a renewal of the original liability. The plaintiff decree-holder has filed the present revision petition in which he contests, firstly, the validity of Act IV of 1938 and secondly, the propriety of the scaling down order. It is conceded now that the question of the validity of the Act is settled by the Full Bench decision and that so far as the 1 defendant is concerned, the scaling down is correct. It is however contended that the 2nd defendant is not entitled to any relief on the basis of the explanation to Section 8 and that the most that he can claim is the relief under Section 9 in the matter of interest on the promissory note which discharged the decree of 1933.

(2.) We have held in Neelappa Reddiar V/s. Solaimuthu Udayan (1940) 2 M.L.J. 517, that in order to claim the benefit of the explanation to Section 8 the debtor must be the same debtor who incurred the antecedent liability. In Periakaruppan Chettiar V/s. Appaji Naidu (1940) 2 M.L.J. 786, we recognised that there might be cases in which there was a substantial identity of the debtor though in form the debt appeared to have been incurred by different individuals. That was a case of a joint family debt incurred by certain co-parceners along with strangers and renewed by different co-parceners from those who executed the earlier note. In C.R. P. No. 1905 of 1940 we had to deal with an application under Section 19 to scale down a decree against two judgment-debtors one of whom claimed that his liability was only that of a surety, the other judgment-debtor being the person who was liable under the earlier debts to which the decree could be traced back. We held that whereas the judgment-debtor who was a party to the earlier debts could claim that his liability was a renewal of a pre-existing liability, so far as the alleged surety was concerned he could not by any proceeding under Act IV of 1938 claim that his debt was to be scaled down with reference to the amount for which the principal judgment-debtor was found liable and that if the surety was entitled to relief having regard to the terms of Section 128 of the Contract Act he must claim that relief in separate proceedings and not in proceedings under Act IV of 1938. From this decision it follows that when there is a debt due by A which is renewed by a later debt due jointly and severally by A and B, B cannot claim that his liability under the later debt is a renewal of an antecedent debt, though A can put forward such a claim.

(3.) In the present case we are dealing with actual proceedings in a suit so that defences are open not merely under Act IV of 1938 but also under the general law. It is not denied that the 1 defendant is entitled to the benefit under Act IV which the lower Court has awarded. It is however contended that the 2nd defendant was liable only as a surety and that by virtue of Section 128 of the Contract Act, the liability of the principal debtor having been reduced, the surety's liability should be proportionately reduced on the ground that it must be co-extensive with that of the principal debtor. This contention cannot succeed, for, in the first place, it is not established that the 2nd defendant was a surety, strictly speaking. The promissory note Ex. A makes it clear that both the defendants bound themselves jointly and severally to pay the amount of the debt to the promisee in consideration for the satisfaction of the decree debt against the 1 defendant. The lower Court infers from this fact that the 2nd defendant was a mere surety. But the contract itself makes the 2nd defendant liable as a principal and for that liability the abandonment by the promisee of his decree against the 1 defendant is a sufficient consideration. By the terms of Section 132 of the Contract Act a mere knowledge by the promisee that the 2nd defendant was only a surety for the 1st defendant would not affect the liability of the promisors to the promisee under the contract. Nor is it open to the 2nd defendant to let in parole evidence to vary the terms of the contract Ex. A (Vide Narasimhamurthi V/s. Ramaswami (1912) 24 M.L.J. 91). By the terms of a written contract both the defendants are jointly and severally liable for the full amount of the debt. There is sufficient consideration as regards both the defendants for this contract and it is not in our opinion open to the 2nd defendant to try and whittle down his liability by reason of any private arrangement with the 1 defendant to which the promisee was not a party.