Madras High Court
Kangan vs Kannammal And Ors. on 19 February, 1996
Equivalent citations: (1996)2MLJ77
JUDGMENT Raju, J.
1. The above second appeal has been filed by the first defendant, who failed throughout, against the judgment and decree of the learned District Judge, West Thanjavur, dated 30.11.1981 in A.S. No. 27 of 1981 confirming the judgment and decree of the learned District Munsif, Thanjavur, dated 22.4.1981 in O.S. No. 439 of 1980.
2. First respondent- plaintiff filed the suit on a promissory note dated 2.5.1970 said to have been executed by the first defendant- appellant and others for recovery of a sum of Rs. 4,900 being the principal amount due. The case of the plaintiff in the trial court was that the first defendant, his father Kulandaivelu and one Kulandai Servai jointly executed the promissory note in question forasum of Rs. 5,000 on 2.5.1970 for valuable consideration received by them, that except the first defendant, the other two persons died in 1974, that defendants 3 and 4 are the heirs of Kulandai Servai, that defendants 1 and 2 are the heirs of Kulandaivelu, that on 9.4.1973 a sum of Rs. 100 has been paid, that the said payment has been endorsed on the promissory note, which has been marked as Ex.A-2 and which has also been signed by the first defendant, that the defendants are entitled to the benefits of Tamil Nadu Acts 15 of 1975,16 of 1976, 40of 1978 and 40 of 1979, that the plaintiff was under the bona fide impression that the defendants are entitled to the benefits of the said Acts and therefore, the period from 16.1.1975 to 13.6.1979, namely 4 years, 5 months and 28 days, has to be excluded while computing the period of limitation, that such exclusion is permissible under the Tamil Nadu Act 40 of 1979, that the endorsement of payment made by the first defendant is binding on the other heirs of the first executant, that the defendants are not entitled to the benefits of the Tamil Nadu Act 13 of 1980 and that since the defendants having not paid the amount, the suit has come to be filed for recovering the same.
3. The first defendant filed a written statement and the same was adopted by the other defendants contending that the suit was barred by limitation, that though the suit promissory note way executed, it was not supported by consideration, that it was executed pursuant to an arrangement to secure the payments for the supply of flowers, that defendants 3 and 4 are not related as brother and sister, that defendants 2 and 3 are not the sole heirs of Kulandaivelu and there are other heirs, that Kulandaivelu Servai was not alive on the date when the endorsement was made and therefore, he could not have made the endorsement, Ex. A-2, that the first defendant, who was a divided son, had never acted as the agent of the deceased Kulandaivelu, that the defendants are entitled to the benefits of the Tamil Nadu Act 13 of 1980 and therefore, the suit is liable to be dismissed.
4. On the above claims and counter claims, the suit came to be tried and both parties adduced oral evidence and documents were marked only on the side of the plaintiff. The learned trial Judge by his judgment and decree dated 23.4.1981 decreed the suit holding that the suit promissory note was duly supported by consideration, that the endorsement of payment, Ex.A-2, was valid, binding on all the defendants and that the defendants are not entitled to the benefits of Act 13 of 1980 and that the suit cannot be said to be barred by limitation as contended by the first defendant. Aggrieved, the first defendant pursued the matter on appeal before the District Court, West Thanjavur. The learned District Judge also by the Judgment and decree dated 30.11.1981 concurred with the findings of the trial court and dismissed the suit. Hence, the above second appeal.
5. This Court at the time when the second appeal was admitted on 4.8.1983 formulated the following substantial question of law:
When Section 34 of Act 40 of 1979 applies only to cases where the suit cannot be filed for certain sum in view of the bar under Section 7 of Act 40 of 1978, and in the instant case when the plaintiff was under no disability to institute a suit after 15.7.1978, was the learned Subordinate Judge right in holding that the plaintiff is entitled to exclude time as per Section 34 of Act 40 of 1979?
6. First respondent - plaintiff, in spite of notice, has not entered appearance and notice to other respondents has been dispensed with at the request of the appellant. Since the first respondent, who is the contesting party, has not appeared, in appointed Mr. R. Muthukuaraswamy, Government Pleader, as amicus curiae in this matter to assist the court in view of certain issues arising on account of the provisions made in Sections 32, 33, and 34 of the Tamil Nadu Act 40 of 1979. Pursuant to the same, the learned Government Pleader appeared and on getting the relevant particulars relating to the legislation in question made his submissions in assisting the court to decide the issues arising in this appeal.
7. Learned Counsel for the appellant has not chosen to raise any other ground except the one based on the bar of limitation in the manner it has been formulated by a learned judge while admitted the second appeal, as noticed supra. In order to support the claim that the suit was barred, the learned Counsel relied upon the decision in Sri Agastheeswara Swami Devasthanam v. Rajagopal Konar (1992)1 LW. 71. The said decision was rendered by Srinivasan, J, and it was held therein was hereunder:
It is not clear from the report as to whether the debt was deemed to be discharged under Section 7(1)(a) or Section 7(2)(i) of the Tamil Nadu Act 40 of 1978. Those facts are not referred to in the report. However, if the learned Judge intended to lay down as an abstract proposition that all debts on which suits were barred, by the moratorium legislations prior to the passing of Tamil Nadu Act 40 of 1978 would come within the purview of Section 34 of the said Act, I must express my respectful dissent. The language of the section is clear. It cannot be presumed or assumed that the legislature provided for a contingency which did not exist. Nor can the Legislature be attributed with ignorance of the provisions of Act 40 of 1978. As pointed out already, there were two contingencies in which suits were barred by the provisions of Tamil Nadu Act 40 of 1978. They were under Section 7(1)(a) and Section 7(2)(i) of the said Act. It is only to such suits, Section 34 of Act 40 of 1979 would apply. The Legislature would not have intended to make the section applicable to suits which could have been instituted under Tamil Nadu Act 40 of 1978 and which were not barred by the provisions of that Act. The expression "barred" cannot be construed to cover even cases which were not barred and in which suit could have been filed for scaled down amounts. If the Section is given effect to fully, the only result that will follow is that suits which were completely barred by the provisions of Tamil Nadu Act 40 of 1978 are alone entitled to have the benefit of exclusion of the entire period between 15.1.1976 to 13.6.1979.
Before the learned Judge, attention appears to have been drawn to an earlier decision of another learned Judge S.A. Kader, J., in Sivasubramaniam alias Kandasami v. Mohideen Pitchai 99 L. W. 198, and while dealing with the said decision, Srinivasan, J. held as hereunder:
My attention is drawn to a Judgment in Sivasubramaniam alias Kandasami v. Mohideen Pitchai 99 L. W. 198. In that decision, S.A. Kader, J. considered the debt due on a promissory note dated 18th March, 1974 by an agriculturist. The suit was filed on 8th June, 1981. The moratorium was held to be in force from 16th June, 1975 to 14th June, 1979. The learned Judge held that the plaintiff was entitled to exclude the entire period of four years, four months and 27 days and his suit was in time. He referred to Section 34 of the Tamil Nadu Act 40 of 1978 and observed as follows:
This section covers the period covered by the Tamil Nadu Indebted Agriculturists (Temporary Relief) Act 15 of 1976 as amended by the Tamil Nadu Debt Relief Laws (Amendment) Act of 1977 the Tamil Nadu Debt Relief Laws (Second Amendment) Act of 1977 and the Tamil Nadu Debt Relief Laws (Amendment) Act 2 of 1978; and the period during which the Tamil Nadu Debt Relief Act 40 of 1978 was in force, that is from 15th January, 1976 to 13th June, 1979, when the Tamil Nadu Debt Relief Act 40 of 1979 came into force. But the section is not happily worded, as I shall now show.
Under Section 34, the period commencing, on and from 15th January, 1976 and ending with the date of the publication of this Act (13th June, 1979) is excluded in cases where suits or applications for execution would have been instituted or made but for the fact that the institution of the suit or the making of the application was barred by the provisions of the Tamil Nadu Debt Relief Act 40 of 1978. As already pointed out, the Tamil Nadu Debt Relief Act 40 of 1978 did not bar the institution of the suit or the making of the application for execution, but only provided for scaling down of certain debts, the legislature could not have intended to provide for a contingency which did not exist. What the Legislature has really intended is the application of the section to cases covered by the Rules of scaling down provided for in the Tamil Nadu Debt Relief Act 40 of 1978, the period from 15th January, 1976 till the date of the publication of the Act 40 of 1979 (13th June, 1979) is excluded in computing the period of limitation for filing a suit or making of an application for execution.
In the light of the above two decisions, it becomes necessary for me to consider the respective ratio of those two decisions to come to a conclusion as to which of the two decisions that will apply or could be applied to the case on hand.
8. The fact that the suit promissory note came to be executed on 2.5.1970 and that there was an endorsement of payment on 9.4.1973 and the suit as such came to be filed before the trial court on 29.1.1980 are matters which have become final and over which there can be no dispute or controversy, in view of the factual findings of the courts below. The question which looms large for consideration is, therefore, as to whether the plaintiff could take advantage of Section 34 of the Tamil Nadu Debt Relief Act 40 of 1979. The fact that if the suit has been filed on 15.7.1978 when the Tamil Nadu Debt Relief Act 40 of 1978 came into force in terms of the provisions contained therein, the suit would have been well within the period of limitation is not in serious controversy. Equally if it is held by this Court also as has been held by the courts below that the plaintiff is entitled to avail of the benefits of Section 34 of Act 40 of 1979. The Suit presented in this case would be well within the period of limitation, is not also in dispute. The above result flows from the various debt relief legislations Tamil Nadu Acts 10 of 1975,48 of 1975, President's Act 15 of 1976, Presidents act 16 of 1976, President's Act 3 of 1977, Tamil Nadu Act 1 of 1977, Tamil Nadu Act 2 of 1978 and Tamil Nadu Act 40 of 1979. Consequently, the only issue that requires detailed consideration is about the applicability or otherwise of Section 34 of Tamil Nadu Act 40 of 1979 to the case on hand.
9. Tamil Nadu Act 40 of 1978 was enacted and by virtue of Section 1(2), it shall be deemed to have come into force on 15.7.1978. The provisions of the said Act provided for permanent debt relief by way of liquidation or scaling down of debts, as the case may be, to specific classes of weaker sections of society consisted of agriculturists and other indebted persons in the State. It appears that when the provisions of the said Act were sought to be enforced, and implemented, writ petitions have been filed in this Court challenging the constitutional validity of the same and in the course of hearing of such cases, certain difficulties have been noticed, necessitating re-examination of the provisions on the constitutional aspects and on such re-examination, the State came to a decision that the permanent debt relief shall be by way of only scaling down of debts. To give effect to the said object, Tamil Nadu Act 40 of 1979 was enacted. So far as the provisions of the said Act are concerned, by virtue of Section 31, Tamil Nadu Act 40 of 1978 came to be repealed. Tamil Nadu Act 40 of 1979 was published in the Tamil Nadu Government Gazette on 13.6.1979 and by virtue of Section 1(3), the said Act except Sections 32 to 34 shall be deemed to have come into force on 15.7.1978 and Sections 32 to 34 of the Act were directed to come into force on the date of the publication of the said Act, namely, 13.6.1979. The repeal of Tamil Nadu Act 40 of 1978, the fact that the re-enacted Tamil Nadu Act 40 of 1979 came into force with effect from 15.7.1978. as also the date on which the repeal of Tamil Nadu Act 40 of 1978 was itself brought about would all lead to the position as though for all purposes, Tamil Nadu Act 40 of 1978, has never been enacted and that Tamil Nadu Act 40 of 1979, without Sections 32 to 34 which were brought into effect from 13.6.1979, alone were in full force and effect even as on 15.7.1978.
10. Section 34 of Tamil Nadu Act 40 of 1979 reads as hereunder:
Exclusion of time for limitation and dissolution of stay proceedings in respect of certain suits and applications: (1) Where, on or after the 15th day of January, 1967, but before the date of the publication of this Act in the Tamil Nadu Government Gazette, any suit for the recovery of any amount towards any liability arising out of the debt due from a debtor would have been instituted or any application for the execution of a decree passed in any such suit would have been made but for the fact that the institution of the suit or the making of the application was barred by the provisions of the Tamil Nadu Debt Relief Act, 1978 (Tamil Nadu Act 40 of 1978) in computing the period of limitation or limit of time prescribed for such suit or application the period commencing on and from the 15th day of January, 1967, and ending with the date of the publication of this Act in the Tamil Nadu Government Gazette, shall be excluded.
Where any proceedings in any of the suits or applications of the nature mentioned in Sub-section (1) were stayed by any of the provisions of the Tamil Nadu Debt Relief Act, 1978 (Tamil Nadu Act 40 of 1978) the stay effected in respect of such proceedings shall stand dissolved and such suit or application shall be proceeded with under this Act from the stage which had been reached when further proceedings in such suit or application were stayed.
It is while construing Sub-section (1) of Section 34, the decision in Sivasubramaniam's case, 99 L.W. 198 and Sri Agastheeswaraswami Devasthanam's case (1992) 1 L.W. 71, came to be rendered expressing virtually two divergent views. As against the view taken by the learned Judge who decided the Sivastibramaniam's case, Srinivasan, J. was of the view that except in respect of cases where the debt deemed to be discharged under Section 7(1) (a) or Section 7(2) (i) of Tamil Nadu Act 40 of 1978, it could not be said that the suits in other contingencies were barred by the provisions of Tamil Nadu Act 40 of 1978. According to the learned Judge, the expression "barred" used in Sub-section (1) of Section 34 of Tamil Nadu Act 40 of 1979, cannot be construed to cover even cases which were not barred and suits could have been filed for scaled down amounts and that is how the learned Judge has held that the only result that follows is that the suits which were barred completely by the provisions of Tamil Nadu Act 40 of 1979, are alone entitled to have the benefit of exclusion of the entire period between 15.1.1976 and 13.6.1979.
11. I have carefully considered the submissions of the learned Counsel for the appellant and the learned Government Pleader and also the two decisions referred to above placed before me in this connection. The fact that the creditors could not have filed suits for the entire debt amount due and after coming into force of Act 40 of 1978 but prior to its repeal, if any creditor wanted to file suit, it could have been filed only for the scaled down amount in cases or contingencies not covered by Section 7(1) (a) or 7(2) (i) of Act 40 of 1978, cannot be disputed. The consequence of enacting provisions to permit suits for recovery of any debt not for the entire amount that may become due and realizable otherwise under the terms and conditions of the lending or borrowal but only for a reduced sum after complying with the provisions enacted for scaling down the debt, would, in my view constitute a bar for the purpose of Section 34 as a total embargo placed from recovering the debt as a consequence of the discharge given under the statutory provisions themselves to a debt. The expression "barred" is a word in general used to characterise the effect of statute of limitations and it at times used to signify a legal destruction for ever or taking away for a time of the right. Any hindrance or obstruction by a barrier created by a statute preventing a recovery in law even a portion of the claim or denying part of course of action would come under the expression 'barred' since it operates as a bar, though not in the sense of total destruction or discharge of the claim but at least for effecting a partial discharge or destruction of the claim and making it beyond the reach of the owners of the right. As far as the provisions of the Act under consideration are concerned as noticed earlier, the impediment created by various debt relief legislations prevented the recovery of the debts till the coming into force of Tamil Nadu Act 40 of 1979 which purported to give permanent as well as total relief in respect of certain specified categories of debts and a permanent, but partial relief in respect of other categories or classes of debts. Insofar as there is no indication under the provisions of Tamil Nadu Act 40 of 1979 and particularly in Section 34 to confine the benefit of extended period of limitation only to the claim or category of debts in respect of which total relief has been given under Tamil Nadu Act 40 of 1978, there is no justification to restrict or confine the operation and application of the provisions contained in Section 34 of Tamil Nadu Act 40 of 1979 only to the class and category of debts in respect of which a permanent and total bar or statutory discharge was contemplated and given under the provisions of Tamil Nadu Act 40 of 1978.
12. That apart, the various debt relief legislations enacted from time to time have brought about a disability and stalemate in the recovery of debts by moving courts till the coming into force of Tamil Nadu Act 40 of 1978 on 15.7.1978. Inasmuch as the provisions of Tamil Nadu Act 40 of 1979 were enacted more as a legislation for replacing or substituting by repealing the earlier Act of 1978 with a new scheme only for scaling down of debts in the manner provided under Tamil Nadu Act 40 of 1979, the legislature seemed to have felt the need for introducing Sections 32 to 34 to cover the various contingencies that may arise on account of repeal of Tamil Nadu Act 40 of 1978 and enforcement and implementation of the provisions of Act 40 of 1979. On a careful reading of Sections 32 to 34,1 am of the view that they devised and provided a scheme not only to grant certain relief by way of scaling down but also confer an extended period of limitation in favour of the creditors as package deal and erase the effects or remove the obstacles created under Act 40 of 1978 even partially once and for all and introduce only one pattern of relief. If the extended period of limitation envisaged under Section 34 is to be construed so as to make it available only to those cases of claims covered or cases of debts in respect of which not only a permanent but total bar has been created under Tamil Nadu Act 40 of 1978 on account of the total discharge envisaged of certain claim or categories of debts only, there was no necessity for providing under Section 34 for exclusion of time from 15.1.1976 since the period on and from 15.1.1976 was well-covered by at least two presidential enactments for a period of one year at any rate. In my view, the legislature could not be considered to have intended to create a nebulous or doubtful state of affairs by using the word 'barred' intending the said expression to apply and to cover only cases of a permanent and total bar on account of such statutory discharge of the debt. The date with reference to which repeal of Act 40 of 1978 has been made and its replacement by the provisions of Tamil Nadu Act 40 of 1979 excluding Sections 32 to 34 with retrospective effect from the publication of the coming into force of Tamil Nadu Act 40 of 1978 and the prospective application given to Sections 32 to 34, in my view were intended to ensure availability of the continued benefit of exclusion of time for limitation in cases of all debts irrespective of whether the discharge given under Tamil Nadu Act 40 of 1978 is total or partial. The provisions contained in Section 32 for abatement of the pending proceedings under the repealed Act and destruction of any right accrued or acquired under the repealed Act under Sub-section (3) of Section 32 and denial of the right to pursue such rights accrued and liability incurred under the repealed Act directly to come under the provisions contained in Section 33 providing for removal of doubts, would make it clear and in my view, reinforce and support the provision of total exclusion of limitation, except in cases of class or category of debts, which are outside the purview of Tamil Nadu Act 40 of 1978.
13. Consequently, I am of the view that of the two views expressed in the two decisions referred to above, the one taken by the learned Judge who decided Sivasubramaniam's case 99 L. W. 198, appeals to me to be a more reasonable and acceptable one and the one to be taken keeping in view public interest also. It is a well-accepted principle that the law of limitation does not destroy the right but only deny the remedy to enforce through courts beyond the period of limitation prescribed for vindicating the rights of parties. Having regard to the said position underlying the law of limitation, wherever there are room for doubts, the benefit of the case should be given to the holder of rights and the construction otherwise would bring about a more drastic situation than that was really intended by the statute. In the case on hand, the plaintiff, has also averred in the plaint that they were under the bona fide belief that the defendants were entitled to the benefits under the various debt relief legislations including Tamil Nadu Act 40 of 1978 and therefore, she did not come to court at the earliest point of time. In view of all the above, I am of the view that the conclusion of the courts below that the suit filed by the plaintiff was not barred by limitation, does not call for nay interference in this second appeal.
14. Learned Counsel for the appellant also made an incidental submission that the plaintiff in paragraph 9 of the plaint has stated that the plaintiff would be satisfied if the decree is granted for the principal amount only without any interest and that, therefore, the plaintiff must be denied of the claims for interest. No doubt, on a verification of the plaint, it in seen that in paragraph 9 the said submission has been made and as a matter of fact, court-fee has also been paid only for the principal amount of Rs. 4,900. The effect of the same, in my view, would be that the plaintiff cannot claim any interest till the date of suit only and as far as the subsequent interest is concerned, it is a matter inevitably following the decree and for post-institutional period, the plaintiff cannot be denied interest taking advantage of the statement made in paragraph 9 of the plaint. As a matter of fact, the trial court has granted subsequent interest only from the date of plaint till the date of decree at 12% per annum and thereafter at 6% per annum till the date of realisation. Such decree is in conformity with law and does not call for any interference. The second appeal, therefore, fails and shall stand dismissed. There will be no order as to costs.
15. I place on record my appreciation for the efforts taken by Thiru R. Muthukumaraswamy, Government Pleader to analyse the materials pertaining to the provisions for consideration in this case and assisting the court.