# S. PL. NARAYANAN CHETTIAR v. M. AR. ANNAMALAI CHETTIAR

- **Citation:** [1959] Supp. 1 S.C.R. 237
- **Court:** Supreme Court of India
- **Decided:** 1956-04-01
- **Case number:** Civil Appeal No. 117 of 1955
- **Bench:** Jafer Imam, S. K. Das, J. L. Kapur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s-pl-narayanan-chettiar-v-m-ar-annamalai-chettiar-1648
- **Pages:** 17

## Headnote

Debt Relief-Agriculturist-Scaling down of decree debt-Enabling statute coming into force pending appeal-Application made after
appellate decree-Whether barred by res judicata-Madras Agriculturists Relief Act, z938 (IV of z938), as amended, s. z9(2)-Madras
Agriculturists Relief (Amendment) Act (XXIII of z948), s. z6,
els. (ii), (iii).
In 1944 the respondent instituted a suit for the reco~ery
of money due under an award dated July 31, 1935, whereby the
appellant and his brother were directed to pay a certain amount
to the respondent. The suit was dismissed by the trial Court
Mckenzie 6- Co.
Lid.
v.
Its Workme11
and Others
Kapur].
October 3r.
238
SUPREME COURT REPORTS [1959] Supp.
r958
but on appeal the High Court passed a decree on March 9, 1951.
During the pendency of the appeal in the High Conrt the Madras
Na•ayanan
Agriculturists Relief Act, 1938, was amended by Act XXIH of
Ch•tti••
1948, which inter aliaby adding sub-section (2) to s. 19 of the main
v.
Act enabled decrees passed after the commencement of the Act
Annamalai Ch•tti•• to be scaled down under the provisions of the Act.
By cl. (ii)
to s. 16 of the amending Act, which came into force on January
25, 1949, it was provided that "that the amendments made by
this Act shall apply to ......... all suits and proceedings instituted
before the commencement of the Act, in which no decree or
order has been passed before such commencement ". On October 5, 1951, the appellant made an application to the trial court
for scaling down the decretal debt under s. 19(2) of the Madras
Agriculturists Relief Act, 1938, as amended, but the application
was dismissed on the ground that the trial court had no jurisdiction to act under that sub-section as the decree sought to be
scaled down had been passed by the High Court. The appellant
preferred an appeal to the High Court and also made a separate
application for scaling down the decretal debt under s. 19(2) of
the Act.
The High Court took the view that s. 19(2) was controlled by s. 16 of the amending Act and that cl. (ii) of s. 16 was
applicable to the case, but that as the appellant whose appeal
was pending at the commencement of the amending Act did not
apply for scaling down before the decree was passed although
he had the opportunity to do so, his application subsequent to
the decree was barred by the principle of res judicata.
Held, tha,t the High Court erred in its view that in order to
get relief under s. 19(2) of the Act, read with cl. (ii) of s. 16
of the amending Act, the appellant must have made the application when the appeal was pending and before a decree had
been passed.
For the application of cl. (ii) of s. 16 of the amending Act,
the true test is whether the suit or proceeding was instituted
before January 25, 1949, and whether no decree or order for repayment of a debt had been passed before that date, and it is
not necessary that the suit or proceeding should be pending on
the date of the application under s. 19(2) of the Act. In cases
covered by tha.t clause a party can ask for relief under the Act
at two stages, before a decree for repayment of the debt had
been passed, and also after such a decree had been passed, and
since s. 19(2) of the Act in express terms enables a debtor to
claim a relief under the provisions of the Act after a decree had
been passed, the appellant is entitled to the benefit of s. 19(2) of
the Act read with s. 16, cl. (ii), of the amending Act.
While cl. (ii) of s. r6 applies to suits and proceedings which
wer~ instituted before January 25, 1949· but in which no decree
or order had been passed, or the decree or final order passed had
not become final, before that date, cl. (iii) applies to decrees or
orders, which, though they had become final before January 25,
•
(I) S.C.R. SUPREME COURT REPORTS
239
1949, were still in the state of unfinished execution and at the
stage at which satisfaction had not been fully received.
Venkataratnam v. Seshamma, I. L. R. [1952]
Mad. 492,
approved.
Narayanan
Ch

## Text

(1) S.C.R. SUPREME COURT REPORTS
237
the strikers had ta.ken up a belligerent attitude and
the lock out was fully justified. The Labour Appellate
Tribunal a.warded to the 24 workmen reinstated by its
amended order dated September 28~ 1956, back wages
from April 1, 1956, to the date of reinstatement as was
done by the Industrial Tribunal in the case of workmen Nos. 2 to 24, whom the Tribunal had ordered to
be reinstated. As we have come to the conclusion
that the order of reinstatement by the Industrial
Tribunal of workmen Nos. 2 to 24 and by the Appellate Tribunal of workmen Nos. 25 to 48 was erroneous,
neither of the two sets of workmen is entitled to back
wages by way of compensation.
The appeal is therefore allowed and the decision of
the Labour Appellate Tribunal as to all the workmen
n.nd the award of the Industrial Tribunal as to workmen Nos. 2 to 24 are set aside and the claim for compensation which was argued before us is disallowed.
As the workmen have been dismissed and no compensat.ion has been allowed tho proper order as to costs is
that both parties do pay their costs of this appeal.
Appeal allowed.
S. PL. NARAYANAN CHETTIAR
v.
M. AR. ANNAMALAI CHETTIAR
(JAFER IMAM, S. K. DAS and J. L. KAPUR, JJ.)
Debt Relief-Agriculturist-Scaling down of decree debt-Enabling statute coming into force pending appeal-Application made after
appellate decree-Whether barred by res judicata-Madras Agriculturists Relief Act, z938 (IV of z938), as amended, s. z9(2)-Madras
Agriculturists Relief (Amendment) Act (XXIII of z948), s. z6,
els. (ii), (iii).
In 1944 the respondent instituted a suit for the reco~ery
of money due under an award dated July 31, 1935, whereby the
appellant and his brother were directed to pay a certain amount
to the respondent. The suit was dismissed by the trial Court
Mckenzie 6- Co.
Lid.
v.
Its Workme11
and Others
Kapur].
October 3r.
238
SUPREME COURT REPORTS [1959] Supp.
r958
but on appeal the High Court passed a decree on March 9, 1951.
During the pendency of the appeal in the High Conrt the Madras
Na•ayanan
Agriculturists Relief Act, 1938, was amended by Act XXIH of
Ch•tti••
1948, which inter aliaby adding sub-section (2) to s. 19 of the main
v.
Act enabled decrees passed after the commencement of the Act
Annamalai Ch•tti•• to be scaled down under the provisions of the Act.
By cl. (ii)
to s. 16 of the amending Act, which came into force on January
25, 1949, it was provided that "that the amendments made by
this Act shall apply to ......... all suits and proceedings instituted
before the commencement of the Act, in which no decree or
order has been passed before such commencement ". On October 5, 1951, the appellant made an application to the trial court
for scaling down the decretal debt under s. 19(2) of the Madras
Agriculturists Relief Act, 1938, as amended, but the application
was dismissed on the ground that the trial court had no jurisdiction to act under that sub-section as the decree sought to be
scaled down had been passed by the High Court. The appellant
preferred an appeal to the High Court and also made a separate
application for scaling down the decretal debt under s. 19(2) of
the Act.
The High Court took the view that s. 19(2) was controlled by s. 16 of the amending Act and that cl. (ii) of s. 16 was
applicable to the case, but that as the appellant whose appeal
was pending at the commencement of the amending Act did not
apply for scaling down before the decree was passed although
he had the opportunity to do so, his application subsequent to
the decree was barred by the principle of res judicata.
Held, tha,t the High Court erred in its view that in order to
get relief under s. 19(2) of the Act, read with cl. (ii) of s. 16
of the amending Act, the appellant must have made the application when the appeal was pending and before a decree had
been passed.
For the application of cl. (ii) of s. 16 of the amending Act,
the true test is whether the suit or proceeding was instituted
before January 25, 1949, and whether no decree or order for repayment of a debt had been passed before that date, and it is
not necessary that the suit or proceeding should be pending on
the date of the application under s. 19(2) of the Act. In cases
covered by tha.t clause a party can ask for relief under the Act
at two stages, before a decree for repayment of the debt had
been passed, and also after such a decree had been passed, and
since s. 19(2) of the Act in express terms enables a debtor to
claim a relief under the provisions of the Act after a decree had
been passed, the appellant is entitled to the benefit of s. 19(2) of
the Act read with s. 16, cl. (ii), of the amending Act.
While cl. (ii) of s. r6 applies to suits and proceedings which
wer~ instituted before January 25, 1949· but in which no decree
or order had been passed, or the decree or final order passed had
not become final, before that date, cl. (iii) applies to decrees or
orders, which, though they had become final before January 25,
•
(I) S.C.R. SUPREME COURT REPORTS
239
1949, were still in the state of unfinished execution and at the
stage at which satisfaction had not been fully received.
Venkataratnam v. Seshamma, I. L. R. [1952]
Mad. 492,
approved.
Narayanan
Chettiar
v.
The question whether cl. (ii) refers to decrees and onlers of Annanznlai Chettitir
a declaratory nature, which are not executable but which haYe
become final before January 25, 1949, left open.
The opinion expressed in Jagannatham Chetty v. Parthasarathy Iyengar, A.LR. 1953 Mad. 777, that the word 'proceedings' iu s. 16 of the amending Act must relate to proceedings
instituted for repayment of a debt and not to execution proceedings which are for enforcement of a decree or order, doubted
and the question left open.
CIVIL APPELLATE
JURISDICTION:
Civil
Appeal
No. 117 of 1955.
Appeal by special leave from the judgment and
order dated the 25th l\'farch, 1953, of the Madrns High
Court, in Civil Misc. Petition No. 6577 of 1952.
R. Ganapathy Iyer, for the appellant.
Sardar Bahadu.r, for the respondent.
1958. October 31. The Judgment of the Court was
delivered by
S. K. DAs, J.-In this appeal, pursuant to special
s. r<. Das J.
leave against the judgment and order of the High
Court of Madras, the question for decision is whether
the appellant who claims to be an agriculturist debtor
is entitled to apply for scaling down of his decretal
debt under the provisions of the Madras Agrieuhurists'
Relief Act (Mad. IV of 1938), hereinafter called the
Act, as amended by the Madras Agriculturists' Relief
(Amendment) Act (Mad. XXIII of 1948), hereinafter
called the amending Act.
The facts which have led to this appeal arc that a
partnership firrri, briefly described as M.A.R. ]'irm,
whose pa.rtners were Arunachalam Chetty, his two
sisters and Subramaniam Chetty, was carrying on the
business of money lending. On the death of Arunachalam Chetty on July 6, 1916, Subramaniarn Chetty, one
of the surviving partners, took over the assets of the
dissolved partnership firm at a valuation of Rs. 25,000
and carried on the business under the name and style
240
SUPREME COURT REPORTS [1959] Supp.
'958
of P.L. S. Firm of which the partners were SubramaniNa,ayanan
am Chetty, Vellachi Ac hi, and his two daughters, and
chettia'
in 1919 Palaniappa Chetty, father of the appellant, joinv.
ed the partnership. The amount of Rs. 25,000 was crediAm1amalui c1,,11;.,, ted in the accounts of the new partnership. On April 19,
1919, the accounts showed a balance of Rs. 16,369-12
s. K. Das. f.
as being due to the share of the deceased Arunachalam Chetty which by the year 1935 swelled up to a
figure of Rs. 55,933-15.
Subramaniam Chetty died in
1924 and the business was carried on after his death by
his widow Lakshmi Achi and her daughter and Palaniappa Chetty. In 1930 Palaniappa Chetty died and his
sons joined the business in his place. Disputes arose
between the partners in 1935 which were referr.ed to
arbitration and under an award given on. July 31,
1935, Arunachalam Ohetty and his sister were directed
to pay to the estate of M.A.R. Rs. 34,958-ll-6 and the
defendants, now appellant and his brother, a sum of
Rs. 20,975-3 and corresponding entries were made in
the account books of P.L.S. Firm. In 1944 the plaintiff,
now respondent, as the adopted son of Arunachalam
Chetty filed a suit for recovery of the amount which
the award had directed the defendants to pay. The
defendants were the two sons of Palaniappa Chetty.
They denied the adoption of the respondent to Arunachalam Che tty and also pleaded the bar of limitation.
The trial Court held the adoption to be invalid and
upheld the plea of limitation. The plaintiff took an
appeal to the High Court which held the adoption to
be valid and also held the suit to be within limitation.
It remitted the case to the trial Court for determining
certain issues and after the findings were received, the
suit was decreed on March 9, 1951, for a sum of
Rs. 26,839-15-9. The appellant applied to the High
Court for leave to appeal to this Cburt'and also applied
for stay. Leave was granted but stay was refused; as
no security was furnished under the rules, the High
Court later revoked the certificate granting leave.
During the pendency of the appeal in the High
Court, the Act of 1938 was amended by the amending
Act by which new reliefs were given to agriculturist
debtors. On October 5, 1951, the appellant ma.de an
(l) S.C.H..
SUPREME COURT REPORTS
241
application to the Trial Court. for scaling down the
'958
decretal debt under s. 19 (2) of the Act which was adNarayanan
ded by the amending Act. The trial Court held that
Chetliar
the decree could be scaled down under s. 19 (2) of the
v.
Act., but it had no jurisdiction to grant that relief as A 1111am,tai Cliellior
the decree sought to be scaled down had been passed
by the High Court.
Against this order the appellant
s. K. Das f. ·
took an appeal to the High Court on July 4, 1952, and
also made a separate application in the High Court
for scaling clown the decretal debt under s. 19 (2) of
the Act. The High Court dismissed the application
on March 25, 1953.
The appellant then applied for
leave to appeal under Art. 133 of the Constitution but
this was refused on OctoLer 6, 1953, and this Court
gni.nted special leave on April 19, 1954.
The ground on which the High Court refused relief
under s. 19 (2) of the Act was that "the retrospective
operation of s. 19 (2) was controlled by s. 16 of the Act
XXIII of 1948 " and tha.t cl. (ii) of s. 16 applied and
as the appellant whose appeal was pending at the
eomrnencement of the amending Act did not apply for
scaling down before the decree was passed although he
had the oppor.tunit.y to do so, his application subsequr~nt to the <leurue was barred by the principle of res
judicata. 'fhe provisions of s. 19 (2) of the Act which
gave the right to obtain relief of scaling down notwithstanding the provisions of the Code of Civil Procedure
to the contrary were held inapplicable, because s. 19
(2) of the Act was itself " limited by the provisions of
s. 16 of Act XXlII of 1V48 ". The High Court observed that although the appellant had tiled an additioual written statement claiming relief nuder the Burma
Debt Li~ws, uo prnyer was wade for any reliof under
t.ho Act.
The High Court said :-
"A party who had an opportunity Lo raise a plea
Lut did uot mise the Plea. is precluded by principles
of res iudicata from raising the plea over again at a
subsequent stage. But it is so.id that the principle of
r£is jndicata has no application to the present case as
section 19 (1) which is incorporated by reference iu
section 19 (2) says that a petitioner would be entitled to the relief given to him under that section
3'
242
SUPREME COURT REPORTS
(1959] Supp.
'958
notwithstanding anything stated in the Code of Civil
Procedure. But this argument ignores the fact that
Narayanat1
Chettiar
the scope of section 19 (2) is itself limited by the proviv.
sions of section 16 of Act XXIII of 1948" .
• innamoiai ChettiarThe High Court then referred to the full bench judgment in Sriramreddi v. Sriramreddi (1), where at p. 454
s. K. Das J.
it was said :-
"But if the application is not made before the judgment is delivered, it will be too late for a judgment.
debtor to raise the question. The final judgment and
the decree must be drawn up in accordance therewith".
But it is unnecessary for us to go into the effect of
that judgment in the present case, because it dealt
with a different situation and related to proceedings
when the Act had not been amended.
The object of the Act as is shown by its preamble
was to relieve an agriculturist of the heavy burden of
indebtedness in the province (now State) of Madras.
With that object in view provisions were made in the
Act to scale down certain debts, as defined in the Act,
of the agriculturist debtors. See T. N. Krishna Iyer v.
NaUa Thambi Mudaliar and others('). The extent of
scaling down of the debts and the procedure therefor
were laid down in the Act. Section 19 made provision for scaling down of decrees.
As the scope of
relief under this section was limited to debts and decrees anterior to the commencement of the Act in
March, 1938, the objective to be achieved i.e. of giving
relief to the agriculturist debtors remained unrealised
and therefore the Legislature again stepped in and
passed the amending Act, which commenced on January 25, 1949, the object of which was to give further
relief in the case of debts incurred before the commencement of the Act but where the decree was passed after such commencement and, secondly, where
both the debt incurred and the decree passed were of
a date after the Act. By the amending Act several
amendments were made in the Act which were made
applicable to suits and proceedings set out in s. 16 of
the amending Act. One such amendment was the
(1) I.L.R. [1942] Mad. 346.
(2) (1955) I M.L.J. 215.
(1) S.C.R. SUPREME COURT REPORTS
243
addition of s. 19(2) and the amenalment of s. 19 of the
rgsB
Act which was renumbered as s. 19(1). This section
Narayanan
which provides for scaling down of decrees, is as
Chelliar
follows :-
v.
S. 19(1) "Where before the commencement of AnnamalaiCltettiar
this Act, a Court has passed a decree for the repayment
of a debt, it shall on the application of any judgments. K. Das f.
debtor who is an agriculturist or in respect of a Hindu
joint family debt, on the application of any member
of the family whether or not he is the judgment-debtor
or on the application of decree holder, apply the provisions of this Act to such decree and shall notwithstanding anything contained in the Code of Civil Procedure, 1908, amend the decree accordingly or enter
satisfaction, as the case may be :
Provided that all payments made or amounts recovered whether before or after the commencement
of this Act, in respect of any such decree shall first be
applied in payment of all costs as originally decreed
to the creditor ".
(2) "The provisions of sub-section (1) shall also
apply to .cases where after the commencement of this
Act, a Court has passed a decree for the repayment of
a debt payable at such commencement".
Counsel for the appellant has contended that (1) the
High Court had erred in its interpretation of s. 16(ii)
of the a.mending Act, (2) had not given effect to the
beneficial provisions of s. 19(2) of the Act, and (3) had
erroneously applied the principles of res judica.ta. and
thus impaired the efficacy of s. 19 which affords relief
to an agriculturist debtor notwithstanding the provisions of the Code of Civil Procedure to the contrary.
It is necessary to refer at this stage to the amending
Act, which came into force on January 25, 1949. Section 16 of this Act provides:
S. 16 "The amendments made by this Act
shall apply to the following suits and proceedings,
namely:-
(i) all suits and proceedings instituted after the
commencement of this Act;
(ii) all suits and proceedings instituted before the
commencement of this Act, in which no decree or
244
SUPREME COURT REPORTS [1959] Supp.
order has been passed, or in which the dccreCI or order
N•'"Y"''""
has not become final, before such commencement;
chetti"'
(iii) all suits and proceedings in which the decree
v.
or order passed has not been executed or satisfied in
Annamaz..; Chtttiar full before tho commencement of this Act: Pro\•ided
s. K. 0 ,., J.
that no creditor shall be required to refund any sum
which has been pairl-to or realised by him before tho
commencement of this .Act".
Unfortunately, the langmi.gc of "· Hl is not very clear
and lends itself to difficulties of interpretation.
\V c
agree with the High Court that s. 16 of the amending
Act controls !:he amendments made by that Act in
tho sense that those a.mcndments apply to the suits
and proceedings described in the three clauses of s. 16.
Sub-section (2) of s. 19 waH one of the amendment-R
which was inserted by the ammending Act and therefore the appellant-debtor mnst establish that he is entitled to relief under sub-s. (2) of s. 19, because his cas"
comes under one of the three clauses of s. 16.
The
High Court held that cl. (ii) of s. 16 applied in the
present case; but the appellant-debtor could and
should have raised the plea for relief under the Act
when the appeal was pending in the High Court and
as ho did not do so, he was barred from claiming
relief under s. 19(2) on the principle of re.- iudicata.
We do not think that this Yiew is correct anrl our
reasons are the following.
The three clauses of s. 16 are independent of ea<'h
other and cl. (i) refers to suits and proceedings instituted after the commencement of the amending Act.
the relevant date being January 25, 1949. Clause (i)
has no application in the present case and need not
be further considered. Clause (iii), it seems clear to
us, applies to suits and proceedings in which the
decree or order passed had become final, but had not
been executed or satisfied in full before Jan nary 25,
1949: this means that though a final decree or order
for repayment of the debt had been passed before
Jan nary 25; 1949, yet an agriculturist debtor can
claim relief under the Act provided the decree has not
been executed or satisfied in full before the aforesaid
date. It should be remembered in this connection
(l) S.C.R.
RUPREME COURT REPORTS
245
that the word ' debt' in the Act has a very compre1958
hensive connotation. It means any liability in cash
Naray""a"
or kind, whether secured or unsecured, due from an
Chllliar
agriculturist, whether payable under a decree or order
v.
of a civil or revenue court or otherwise etc. It is, Annamalai Cha11iar
therefore, clear that the word ' debt ' includes a
decretal debt. On t,he view that cl. (iii) applies in
s. K. Das 1·
those cases only where a final decrl'e or order for repayment of the debt had been made before .January 25, 1949, it has no application in the present
case; because the decree for repayment of the debt
was passed on l\Iarch 9, 1951, which was after
,January 25, 1949.
We then go to cl. (ii).
This clause is in two parts
and talks of two different situations; one is when no
decree or order has been passed and the other is when
the decree or order passed has not become final.
There is, however. a. common element, and the common element is that cl. (ii) refers to suits and proceedings instituted before January 25, 1949. Now,
the argument which learned counsel for the appellant
has presented is this.
He says that the common
element referred to above is satisfied in the present
case, because the suit was instituted long before January 25, 1949.
He then says that no decree or order
for repayment of the debt having been passed before
March 9, 1951, the first situation envisaged by cl. (ii)
a.rose in the present case and the appellant-debtor was
entitled to avail himself of all or any of the amendments ipade by the amending Act, including the
amendment made in s. 19 by the insertion of sub-s. (2)
thereof. In the alternative, he says that if the word
'decree' or 'order' means any decree or any order,
even then cl. (ii) applies, because the decree of dismissal passed in the suit had not become final on January 25, 1949, for an appeal was then pending. We
do not think it necessary to consider the alternative
argument of learned counsel for the appellant ; because
we are of the view that having regard to the other
provisions of the Act, the words " decree or order "
occurring in cl. (ii) must niea.n decree or order for repayment of a debt.
Wha.t. then is the position before
246
SUPREME COURT REPORTS [1959] Supp.
'958
us ? As we see it, the position is this. Here is a suit
which was instituted before the commencement of the
.v <JJ'ayrnu111
d
Chettia'
amen ing Act, namely, January 25, 1949. This suit
v.
was pPnding on that date and no decree or order for reA"""'""'"; Chc11ia, payment of the debt had been made by that date. The
decree for repayment of the debt was made some two
s. "· D•• J.
years after, on .Vfarch 9, 1951. Therefore, the two conditions laid down for the first part of cl. (ii) are present and it clearly applies to the present case. The
High Court recognised this, but thought that the appellant-debtor could ask for relief at only one stage,
namely, when the appeal was pending and before a
decree had been passed, and if the appellant-debtor
did not do so, he was barred from claiming any relief
on the principle of re8 judicata. It is here, we think
with great respect, that the High Court has gone
wrong. The relief under s. 19 (2), in terms, is a relief
which can be claimed after a decree for repayment of
the debt has been passed. It says that the provisions of
sub-s. (1) shall apply to cases where, after the commencement of the Act, a court has passed a decree for
the repayment of a debt payable at such commencement. The commencement of the Act referred to in
s. 19(2) is the commencement of the main Act (Mad. IV
of 1938),. It is not disputed that the debt in the present
case was payable at such commencement and the
court had passed a decree for repayment of that debt
after such commencement. Section 19(2) in terms
applied, and by reason of the provisions of sub-s. (1)
of s. 19 which were also attracted to the present case,
the appellant-debtor was entitled to the relief asked
for notwithstanding anything contained in the Code of
Civil Procedure, 1908. It is true that the doctrine of
re.s .iudicata is a doctrine of wide import, and s. 11 of
the Code of Civil Procedure is not exhaustive of it.
There is high authority for the view that the principle
of res judicata may apply apart from the limited provisions of the Code of Civil Procedure, but the question
before us, as we see it, is not so much the application
of the principle of res judicata, as the proper construction of s. 19 of the Act and cl. (ii) of s. 16 of the amending Act. In our opinion, s. 19 in express terms entitles
I _,
I
\
(1) S.C.R.
SUPREME COURT REPORTS
247
the appellant-debtor to claim a relief under the
r95B
•
provisions of the Act when the court has passed a.
Narayanan
decree, after the commencement of the Act, for the
Chittiar
repayment of a debt payable at such commencement.
v.
The question then is-does cl. (ii) of s.. 16 take a.way Annamalai Ch1ttiar
that right? We are unable to see how it qoes.
We
have already expressed the view earlier that the two
s. J(, Das J.
conditions for the application of the first part of cl. (ii)
of s. 16 are fulfilled in the present case. If that is so,
we fail to appreciate how the appellant-debtor ca.n be
barred from claiming relief under s. 19 (2) on the
principle of res judicata. If the statute in express
terms gives him a pa.rticula.r right, we do not see
how he can be deprived of it. To hold that the appellant could ask for relief only when the a.ppea.l wa.s
pending would be to deny him relief under s. 19(2),
which relief he ca.n claim only after a. decree for repayment of the debt has been passed. It is true that he
might have claimed relief under other provisions of
the Act at the stage when his appeal was pending;
for example, he might have claimed relief under s. 9.
Does that, however, mean that he is precluded from
claiming the relief under s. 19(2) after the decree ha.s
been passed? We venture to think that the answer
must be in the negative. To hold that the a.ppella.ntdebtor in the· present case could a.sk for a. relief only
at the pre-decree "Stage will be ta.nta.mount to holding
that he is not entitled to relief under s. 19(2), even
though s. 16 says that all the amendments shall apply
to suits and proceedings described in the three clauses
thereof. If, as the High Court held, the amendments
made by the a.mending Act could be availed of only
when the provisions of s. 16 thereof applied a.nd further
that cl. (ii) of that section applied to the present suit
in its appellate stage, then all the amendments ma.de
by the a.mending Act must apply including the amendment to cl. 19. It will be illogical to hold that a.11 the
amendments apply save a.nd except sub-s. (2). It may
prima facie a.ppea.r to be anomalous that it should be
available to a party to ask forr relief under the Act after
the passing of the decree, when he had an opportunity
of asking for that relief before the decree was
1958
248
SUPREME COUR'l' REPORTS [1959] Supp.
passed, but did not do so. The legislature may not
have realised that this would be so,· but as the amend.
Narayanan
Ch.itiar
ments stand, it is clear that in cases covered by cl. (ii)
v.
of s. 16 of the amending Act, a party is entitled to ask
Annama/a; Ch<11iar for relief under the Act at two stages, before lt decree
for repayment of the debt has been passed and also
s. K. Das J.
after such a decree has been passed. Different considerations will, however, arise if a party asks for relief
under the Act at the pre-decree stage and that relief is
refused on the ground that the Act does not entitle
him to any relief under it. If a party, even after snch
refusal, makes a second applicatiou, then the principle
laid down in Narayanan Chettiar v. Rathinaswam·i
Padayachi ('), will apply and the second application
must fail on the ground that it has already been deckled in his presence that he is not entitled to any relief
under the Act.
One. other point h<>s to be referred to in this connection. On behalf of the respondent-creditor it has been
pointed out to us that on the date the application for
relief under s. 19(2) was made in the High Court, nu
suit or pruoeeding · was actually pending, the High
Court having passed a decree llluch eal"lier, na.lllely, on
March 9, 1951.
As a matter of fact, the application
for relief under s. l!l(2) for scaling down the decree
was ma.de in the High Court sometime in 1952.
We
are of the view that cl. (Ii) of s. 16 describes the nature
of suits or .proceedings in which the amen<lment.s shall
a.ppl,Y and the pendency of a. suit or proceeding on a
particular date after J anua.ry 25, Hl4U, is not the true
test. 'l'he true test is whether the suit or proceeding was
illl!tituted before January 25, l94U, and whether in that
suit or proceeding no decree or order for repayment of
a. debt had been passed before that date. That test
having been fulfilled in the present case, cl. (ii) of s. lu
of the amending Act did not stand in the way of the
i.ppella.nt·wl.ten he asked for relief under s. 19(2) of the
Act.
We now tum to such authorities a.shave been placed
before us. The authorities are not all consistent, a.nd
the language of els. (ii) and (iii) of s. 16 of the amending
(<) A.l.R. 1953 Mad. 4>1.
(1) S.C.R.
SUPREME COURT REPORTS
249
Act has perhaps led to some of the difficulties of interi958
prntation referred to therein. The earliest decision
brought to our notice is the decision in Velagala
N ~~;,,~;:n
Sriramareddi and others v. Karri Sriramareddi (1).
v.
This is a full bench decision of the Madras High Court Annmnalai Chettiar
to which we have already referred in an earlier part
of this judgment. The next decision is that of Venkatas. K. D.is J.
ratnam v. Seshamma (2), which; is also a Full Bench
decision of the Madras High Court. It deals with the
construction of clauses (ii) and (iii) of s. 16 of the
amending Act with particular reference to the view
expressed in certain earlier cases of the same High
Court with regard to cl. (iii) of s. 16. The view
expressed in the earlier cases, to which the learned Judges who decided the case out of which the
present appeal has arisen were parties, was that cl. (iii)
of s. 16 had no application to proceedings in which the
decrees and orders had become final before J anua.ry
25, 1949. The Fnll .Bench did not accept that view as
correct. Satyanarayana. Rao, J., who delivered the
judgment of the Court said:
"It cannot be doubted that the two clauses (ii)
a.nd (iii) are entirely independent and a.re intended to
provide for different situations ........ .
" The view ta.ken by the learned Judges in the
Civil Miscellaneous Appeals, already referred to, was
that, while the two clauses a.re independent, .clause (iii)
has no application to proceedings in which the decrees
and orders have become final before the commencement of the Act. It is this view which is also pressed
now before us by the learned Ad voca.te for the respondent. While we agree with the lea.rued Judges in holding that the two .clauses a.re independent, we a.re
unable, with great respect, to accept the view that
clause (iii) applied only to cases in which the decrees
and orders have not become final. If the decree or
order has not become final before the commencement
of this Act, clause (iii), in our opinion, seems to be unnecessary a.nd as such the case would be covered by
cla.use (ii).
~'urther, it would be difficult to imagine
(1) LL R. (1942] Mad. 346.
32
(2) I.L.R. [1952) Mad. 492, 498, 499.
250
SUPREME COURT REPORTS [1959] Supp.
I958
that a decree or order which has not become final can
be finally executed or can be finally satisfied. No
N~~:it~:;•
doubt it is true that, even when an appeal is pending,
v.
a decree may be executed and satisfaction may be
Annamalai Chettiar entered. But all that is only subject to the result of
the appeal. If the appeal succeeds or the amount due
s. K. Das J.
by the defendant to the plaintiff is increased by the
Appellate Court, fresh execution has to be started, the
satisfaction must be re/opened and the execution must
proceed. The Legislature, in our opinion, when it
enacted these two provisions, must have intended that,
even in the case of decrees or orders which have
.become final, having regard to the provisions of the
new Act, relief should be had by the judgment-debtor
so long as the decree or order was not executed or was
not satisfied in full before the commencement of the
Act.
If, however, a decree was executed in part and,
before it was fully satisfied, the debt was scaled down
under the provisions of the Act, as a result of which
the creditor was found to have received more than
what he was entitled to, the proviso enacts that, in
such a situt\tion, the creditor should not be required to
refund any sum which has been paid to or realised by
him before the commencement of this Act. The qnes.
tion is asked, and legitimately, as to which are the
kinds of decrees or orders which have become final and
which are sought to be excluded by implication in clause
(ii) of section 16. It is of course not easy to give an
exhaustive list of such decrees and orders. It may be
that the legislature contemplated that decrees and
orders of a declaratory nature, and which are not
executable and which have become final before the
commencement of the Act, need not be re-opened. A
reading of the two clauses together would suggest that
clause (iii) would apply exclusively to executable
decrees or orders which, though they have become final
hefore the commencement of the Act, are still in the
stage of unfinished execution and at the stage at which
satisfaction was not fully received. The view which
we take, in our opinion, reconciles both the clauses and
does not make any of the clauses unnecessary."
We concur in the view expressed above that cl. (iii) of
(1) S.C.R. SUPREME ~OURT REPORTS
251
s. 16 applies to decrees or orders which, though they
r958
had become final before January 25, 1949, are still in
Narayanan
the stage of unfinished execution and at the stage at
Chettiar
which satisfaction has not been fully received, and
v.
cl. (ii) applies to suits and proceedings which were Annamolai Chettior
instituted before January 25, 1949, but in which no
decree or order had been passed or the decree or order
5· K Das .f.
passed had not become final before that date.
We
consider it unnecessary in the present case to go into
the further question whether cl. (ii) refers to decrees
and orders of a declaratory nature, which are not
executable but which have become final before January
25, 1949. That is a question which does not fall for
decision in the present case and we express uo opinion
thereon. In Kanakammal v. Muhammad Kathija
Beevi (1) it was observed:
" The mere fa.ct that the judgment-debtor raised
an objection to the executability of ~he whole decree
on the ground that it has to be scaled down is no
ground for sea.ling down the decree and the court will
not be justified in so scaling down without a separate
application. This is also another ground for holding
that the judgment-debtor is not barred from filing the
application to scale down the decree even though he
had not raised the question at an earlier stage of the
execution proceedings. \Ve are therefore definitely of
opinion that an application under s. 19 of the Act is
not one which comes under s. 47, Civil Procedure Code,
and therefore the principle of res judicata in execution
cannot apply to the facts of the present case."
The decision in Narayanan Chettiar v. Rathinasami
Padayachi (2), related to a different point altogether,
namely, sticccssive applications under s. I!) or s. 20
of the Act.
In that case the question was whether
the judgment-debtor not having filed an application
under s. 19 within the prescribed time from the
date of the stay order under s. 20 passed on his
prior application was precluded from again filing
auother application under s. 20 followed by a.n application under s. 19. It was held that he was not so
entitled. In Jagamtatham Chetty v. Parthasarathy
{I) A.I.R. 1953 l\Iad. 188, l8g.
(2) A.I.R. 1953 Mad. 421.
252
SUPREME COURT REPOltTS (1059] Supp.
r95B
Iyengar (1) the question as to the meaning of the word
Narnyanan
'proceedings ' in s. 16 was considered and it was
Ch•ttiar
observed that the word 'proceedings' ins. 16 must
v.
relate to proceectings instituted for repayment of a
AnnamalaiCh"tiordebt and not f.o execution proceedings which are for
enforcement of a decree or order.
We greatly doubt
s. I<. Das 1·
whether that is the correct view to take, particularly
when the expression 'debt' includes a decretal debt;
but as the question does not arise in the present case
we refrain from making any final pronouncement. In
H emavathi v. Padmavathi (') it was held that the
amending Act was retrospective so as even to apply to
a debt which had already been scaled down once by
the application of the Act and even where the rights
of the parties had been finally adjudicated by de.cree or
order of a court, provided that the decree or order ha.<l
not been executed or fully satisfied. That was held to
be the effect of cl. (iii) of s. 16 of the a.mending Act.
In Lingappa Chettiai· v. Chinnaswami Naidu (3), the
view taken by Subba ·Rao and Somasuuda.ram, JJ.
(the same Judges who decided the present case) in au
earlier decision that a party who had au opportunity
of getting the beneficent prodsions of the Act applied
to him before the amendment, but did not avail himself of the same, is disentitled to invoke the provisions
of sub-s. (2) of s. 19, was dissented from and Govinda
Menon, J., who gave the judgment of the Court, said:
" \:Ve do not find any difficulty in holding that
sub-s. (2) of section 19 is applicable to cases like the
present, and the retrospective nature of that sub-section a.s contemplated by clause (iii) of section 16 of Act
XXIII of 1948 cannot be restricted or circumscribed
by any other clause in that section."
In T. N. Krishna Iyer v. Nallathambi Mudaliar and
others (') Krishna.swami N ayudu, J., said that the
object of s. 16 of the amending Act was to render the
application of the amendments to a. wide range of
suits, both to suits instituted before and after the commencement of the a.mending Act and to such suits in
which the decrees have not only become final but have
(1) A.I.R. 1953 Mad. 777·
(3) (1955) I M.L.J. '· 5.
(2) I.L.R. [1954] Mad. 8g1.
(4) (1955) I M.L.J. 215-
(1) S.C.R. SUPREME COUHT REPORTS
253
not been executed or satisfied and so long as something
r95!1
remains to be <lone out of the decree, the Act could
,Varayanan
be made .applicable. It seems to us that both on authoChettia•
·
rity and principle, the correct view'is that the appelv.
!ant was entitled to the benefit of s. 19(2) of the Act, Annamalai Chettiar
read with s. 16, cl. (ii) of the a.mending Act.
These are our reasons for holding that the view
5• K. Das f.
taken by the High Court is not correct and the appeal
must, therefore, be allowed and the case sent back to
the High Court for consideration on merits in accordance with law. The appellant will get his costs of
this Court; costs incurred in the High Court before and
hereafter will be dealt with by the High Court at the
time of the final decision.
There were two applications filed by the appellantdebtor for the relief which he claimed. One was filed
. in the trial court and the other in the High Court. The
trial court dismissed the application on the ground
that the High Court a.lone had jurisdiction to give such
relief. The appellant preferred an appeal to the High
Court and also filed an application there. The question.
which is the proper court to give relief to the appellant is a matter on which we a.re making no pronouncement. That is a. matter which will be dealt
with by the High Court.
Appe,al allowed. Case remanded.