{"id":185012,"date":"1953-05-18T00:00:00","date_gmt":"1953-05-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/cheruvu-nageswaraswami-vs-rajah-vadrevu-viswasundara-on-18-may-1953"},"modified":"2017-04-27T11:57:29","modified_gmt":"2017-04-27T06:27:29","slug":"cheruvu-nageswaraswami-vs-rajah-vadrevu-viswasundara-on-18-may-1953","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/cheruvu-nageswaraswami-vs-rajah-vadrevu-viswasundara-on-18-may-1953","title":{"rendered":"Cheruvu Nageswaraswami vs Rajah Vadrevu Viswasundara … on 18 May, 1953"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Cheruvu Nageswaraswami vs Rajah Vadrevu Viswasundara … on 18 May, 1953<\/div>\n
Equivalent citations: 1953 AIR 370, \t\t 1953 SCR 894<\/div>\n
Author: B Mukherjea<\/div>\n
Bench: Mukherjea, B.K.<\/div>\n
           PETITIONER:\nCHERUVU NAGESWARASWAMI\n\n\tVs.\n\nRESPONDENT:\nRAJAH VADREVU VISWASUNDARA RAOAND OTHERS\n\nDATE OF JUDGMENT:\n18\/05\/1953\n\nBENCH:\nMUKHERJEA, B.K.\nBENCH:\nMUKHERJEA, B.K.\nMAHAJAN, MEHR CHAND\nHASAN, GHULAM\nBHAGWATI, NATWARLAL H.\n\nCITATION:\n 1953 AIR  370\t\t  1953 SCR  894\n\n\nACT:\nHindu  law-Debts-Father's power to alienate  sons'  interest\nfor  antecedent\t debts-Whether\t'property'  and\t passes\t  to\nReceiver  on insolvency of father-Sale by Receiver,  whether\nvests sons' interest in purchaser-Provincial Insolvency Act,\n1920,\tas   amended   in   1948,   s.\t  28A--Retrospective\noperation--Madras  Agriculturists' Relief Act, 1938, ss.  7,\n8-Purchaser of equity of redemption--Right to claim relief.\n\n\n\nHEADNOTE:\nUnder the provisions of s. 28A of the Provincial  Insolvency\nAct,   1920,  as  amended  by  the   Provincial\t  Insolvency\n(Amendment)  Act  of  1948, which has  been  expressly\tmade\nretrospective,\t when  a  Hindu\t father\t governed   by\t the\nMitakshara law is adjudged a bankrupt, his power to alienate\nthe interest of his sons in the joint family properties\t for\nthe satisfaction of his antecedent debts not contracted\t for\nillegal\t or immoral purposes, passes to the Receiver as\t his\n\"property\" within the meaning of the Act.\nConsequently,  where  a Hindu father who has  mortgaged\t the\njoint  family property for an antecedent debt which  is\t not\nillegal or immoral becomes insolvent and the receiver  sells\nthe property, the interest of his sons in the property\talso\nvests  in  the purchaser, even in the case of  a  sale\theld\nbefore\tthe Amendment Act of 1948 came into force,  and\t the\nsons cannot redeem the property.\nSat  Narain  v. Sri Kishen<\/a> (63 I.A. 384), Rama\tSastrulu  v.\nBalakrishna Rao (I.  L. R. 1943 --Mad. 83) and Viswanath  v.\nOfficial Receiver (I.L.R. 16 Pat. 60) referred to.\nThough the liability of a person who has purchased an equity\nof  redemption after 22nd March, 1938, to pay  the  mortgage\ndebt  arises only on the date of his purchase, if  the\tdebt\nitself\texisted\t on  the 22nd March, 1938,  and\t if  it\t was\npayable by an agriculturist on that date, the purchaser\t can\nclaim  the  benefits  conferred\t by  s.\t 7  of\tthe   Madras\nAgricultural  Relief  Act,  1938,  if  he  himself  was\t  an\nagriculturist on the date of his application.\nPeriannia v. Sellappa (I.L.R. 1939\t218) referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 76 of 1950.
\nAppeal\tfrom  the Judgment and Decree of the High  Court  of
\nMadras dated 18th April 1945, in
\n895<\/span>
\nAppeals Nos. 56 and 192 of 1941 reversing in part the decree
\nof  the\t Court of the Subordinate Judge of  Masulipatani  in
\nOriginal Suit No. 29 of 1937.\n<\/p>\n
B.Somayya   (C.\t  Mallikarjuna\tRow,  with  him)   for\t the
\nappellant.\n<\/p>\n
K.Rajah\t  Aiyar\t (R.   Ganapathy  Aiyar-,  with\t  him)\t for
\nRespondent No. 1.\n<\/p>\n
Respondent No. 10 appeared in person.\n<\/p>\n
1953.  May 18.\tThe Judgment of the Court was delivered by
\nMUKHERJEA J.-The appellant before us is the sixth  defendant
\nin  a  suit, commenced by the  plaintiff-respondent  in\t the
\ncourt  of  the\tSubordinate  Judge  at\tMasulipatam   (being
\nOriginal  Suit No. 29 of 1937) for recovery of a sum of\t Rs.
\n99,653\tannas odd by enforcement of a simple mortgage  bond.
\nThe mortgage bond is dated 28th September, 1930, and it\t was
\nexecuted  by defendant No. 1 for himself and as guardian  of
\nhis  two minor sons–defendants 2 and 3-all of whom  consti-
\ntuted  together\t a  joint Hindu family at  that\t time.\t The
\nplaintiff   mortgagee  happens\tto  be\tthe  son-in-law\t  of
\ndefendant  No.\t1 and at the time of the  execution  of\t the
\nmortgage the first defendant was indebted to a large  number
\nof  persons including the mortgagee himself, and being\thard
\npressed by his creditors requested the plaintiff to lend him
\na sum of Rs. 1,25,000 on the hypothecation of the properties
\nin  suit,  to enable him to tide over his  difficulties\t and
\ndischarge  his\tdebts.\t The  total  consideration  of\t Rs.
\n1,25,000  as stated in the deed is made up of the  following
\nitems :-\n<\/p>\n
(1)Rs. 13,065, which was the amount due on a promissory note
\nexecuted  in favour of the plaintiff by the first  defendant
\non the 17th January, 1928.\n<\/p>\n
(2)Rs.\t13,285 due under another promissory note dated\t18th
\nAugust,\t 1930  executed by defendant No.1 in favour  of\t the
\nwife of the plaintiff and later on transferred by her to the
\nplaintiff on 28th September, 30.\n<\/p>\n
(3)Rs.\t25,000 paid by the plaintiff by endorsing in  favour
\nof defendant No. 1 a cheque for that amount
\n896<\/span>
\ndrawn  in  his\tname  by  the  Co-operative  Central   Bank,
\nRamchandrapuram on the Central Urban Bank, Madras.
\n(4)  Rs. 937-8-0, the amount paid in cash by plain-
\ntiff to\t  defendant No.1 for purchasing stamps for the
\nmortgage document.\n<\/p>\n
(5)  Rs. 72,712-8-0, the amount of future advances which the
\nplaintiff  promised to make from time to time  to  defendant
\nNo.1 according to his convenience.\n<\/p>\n
The  money lent was to carry interest at 7 1\/2 % simple\t per
\nannum and the due date of payment of the principal money was
\n30th September, 1933.  The interest would, however, have  to
\nbe  paid  annually on the 30th of September every  year,  in
\ndefault of which the whole of the principal and interest  in
\narrears would become repayable immediately with interest  at
\n9%  compound per annum with yearly rests.  It was  expressly
\nstated in the mortgage deed that if the mortgagee was unable
\nto advance the entire amount of Rs. 1,25,000, the terms\t set
\nout  above would apply to the amount actually advanced.\t  It
\nappears that after the execution of the mortgage bond a\t sum
\nof  Rs.\t 3,000 only was paid by the mortgagee  to  defendant
\nNo.1  on  5th of November, 1930.  In the plaint,  which\t was
\nfiled  by  the plaintiff on the 15th  September,  1937,\t the
\ntotal  claim was laid at Rs. 99,653 annas odd, out of  which
\nRs.  55,287  annas odd constituted the\tprincipal  money  as
\nstated above and the rest was claimed as interest calculated
\nat the rate of 9% per annum compound with yearly rests.
\nBesides the original mortgagors, who were defendants Nos.  1
\nto  3 in the suit, there were three other persons  impleaded
\nas parties defendants.\tDefendant No. 4 was the Receiver  in
\ninsolvency in whom the entire estate of the defendant No.  1
\nvested\tby  reason of his being adjudged a  bankrupt  by  an
\norder  of  the\tDistrict  Judge of  Kistna  dated  the\t18th
\nJanuary,  1932\tin  Insolvency Proceeding No.  20  of  1931,
\nstarted\t at  the instance of another creditor of  the  first
\ndefendant.   Defendant No. 5 was a lessee in respect of\t the
\nmortgaged properties under defendant No. 4, while the  sixth
\ndefendant was the purchaser of all the mortgaged
\n897<\/span>
\nproperties  from the Receiver in insolvency.  The  Receiver,
\nit seems, had put up all the suit properties to sale subject
\nto  the mortgage on 19th April, 1937, and they were  knocked
\ndown  to  defendant  No. 6 for the price of  Rs.  1,340.   A
\nregistered  deed I of sale was executed by the\tReceiver  in
\nfavour of the purchaser on 20th January, 1939.
\nThe  defendants\t 1 to 3 did neither appear nor\tcontest\t the
\nsuit.  Defendant No. 4 appeared in person but disclaimed any
\ninterest  in  the  suit properties.   The  defendant  No.  5
\ncontended that he was a lessee under defendant No. 4 for one
\nyear only and was not a necessary party to the suit at\tall.
\nThe  suit  was\treally contested by  defendant\tNo.  6,\t the
\npurchaser  at  the Receiver’s sale.  The  defence  taken  by
\ndefendant  No. 6 in his written statement was  substantially
\nof a two-fold character.  It was pleaded in the first  place
\nthat the bond in suit was a collusive document not supported
\nby any consideration and was executed by defendant No. 1  in
\nfavour\tof  his own son-in-law, with a view  to\t shield\t his
\nproperties  from  the  reach of his  creditors.\t  The  other
\ncontention  put\t forward was that the interest\tclaimed\t was
\npenal  and  usurious.\tAfter  the  passing  of\t the  Madras
\nAgriculturists’\t Relief Act in March, 1938,  this  defendant
\nfiled  an additional written statement, with the  permission
\nof  the\t court,\t in  which he raised the  plea\tthat  as  an
\nagriculturist  he  was entitled to the reliefs\tprovided  in
\nthat Act and that the mortgage debt should be scaled down in
\naccordance with the provisions of the same.
\nThe  trial Judge by his judgment dated the 29th July,  1940,
\ndecreed\t the  suit in part.  It was held that  the  mortgage
\nbond  was  not\ta  collusive  document\texecuted  with\t the
\nintention  of defrauding the creditors of the mortgagor;  it
\nwas   a\t  genuine   transaction\t  and\twas   supported\t  by
\nconsideration.\t On  the other point, the  court  held\tthat
\ndefendant  No.\t6 was an agriculturist and was\tentitled  to
\nclaim  the  reliefs  under Madras Act  IV  of  1938.   After
\ndeducting  all outstanding interest which  stood  discharged
\nunder section 8(1) of the
\n898<\/span>
\nAgriculturists\tRelief Act, the principal money due  to\t the
\ncreditor on that date was found by the trial court to be Rs.
\n42,870 annas odd.  This figure was arrived at by taking only
\nthe original amounts actually advanced on the two promissory
\nnotes mentioned above and further, deducting from them,\t the
\npayments made by the debtor towards the satisfaction of\t the
\nprincipals  in each.  Thus a preliminary decree was made  in
\nfavour\tof the plaintiff entitling him to recover a  sum  of
\nRs.  42,870-4-0\t together with interest at 6 1\/4  per  annum
\nfrom  1st  October, 1937, to 1st November,  1940,  the\tdate
\nfixed for payment under the preliminary decree.\t In default,
\nthe whole amount was to carry interest at 6% per annum.\t  It
\nmay be mentioned here that the Subordinate Judge in deciding
\nissue  No. 3 held expressly that the provision\trelating  to
\npayment of compound interest at an enhanced rate in  default
\nof  payment of the stipulated interest on the due dates\t was
\nin  the nature of a penalty and should be relieved  against;
\nbut  as the court scaled down the interest under Madras\t Act
\nIV of 1938, it became unnecessary to consider in what manner
\nthis relief should be granted under section 74 of the Indian
\nContract Act.\n<\/p>\n
Against\t this decision, two appeals were taken to  the\tHigh
\nCourt  of  Madras,  one by the plaintiff and  the  other  by
\ndefendant  No. 6. The plaintiff in his appeal (being  Appeal
\nNo.  56 of 1941) assailed that part of the judgment  of\t the
\nSubordinate  Judge  which gave the defendant  No.  6  relief
\nunder  the  Madras  Agriculturists’ Relief  Act;  while\t the
\nappeal of the sixth defendant (being Appeal No. 192 of 1941)
\nattacked  the very foundation of the mortgage decree on\t the
\nground\tthat the mortgage being a collusive  and  fraudulent
\ntransaction, the plaintiffs suit should have been  dismissed
\nin toto.  The defendants 2 and 3, although they remained  ex
\nparts  during the trial in the first court, filed, in  forma
\npauperig,  a memorandum of cross-objection  challenging\t the
\ndecree of the Subordinate Judge on the ground that as  their
\ninterest  in  the mortgaged properties did not pass  to\t the
\ndefendant  No,\t6 by virtue of the  Receiver’s\tsale,  their
\nright of
\n899<\/span>
\nredemption  remained intact and ought to have been  declared
\nby the trial Judge.\n<\/p>\n
Both these appeals as well as the cross-objection were heard
\ntogether by a Division Bench of the High Court and they were
\ndisposed  of by one and the same judgment dated the 18th  of
\nApril, 1945.\n<\/p>\n
The High Court affirmed the finding of the trial Judge\tthat
\nthe  bond  in  suit was supported by  consideration  to\t the
\nextent\tof Rs. 55,287-8-0 as alleged in the plaint and\tthat
\nit  was\t a  valid and bona fide\t transaction.\tThe  learned
\nJudges\theld,  differing  from the  trial  court,  that\t the
\ndefendant  No. 6 was not entitled to claim any relief  under
\nthe provisions of the Madras Agriculturists’ Relief Act, and
\nthat in any event the court below was not right in  reducing
\nthe amount of the principal money from Rs. 55,287-8-0 to Rs.
\n42,870,\t there\tbeing no renewal of a prior debt so  far  as
\ndefendant No. 6 was concerned.\tThe court agreed in  holding
\nthat the provision relating to payment of enhanced  interest
\nin  case  of default amounted to a penalty and\treduced\t the
\nrate  of  interest from 9% compound to 71  %  compound\twith
\nyearly\trests.\t Lastly, the High Court allowed\t the  cross-
\nobjection of defendants 2 and 3, being of opinion that their
\ninterest  in the mortgaged properties could not vest in\t the
\nReceiver  on  the insolvency of their father  and  that\t the
\ndefendant No. 6 could not acquire the same by virtue of\t his
\npurchase  from\tthe Receiver.  The defendants Nos. 2  and  3
\nwere,  therefore, allowed the right to redeem the  mortgaged
\nproperties  along with defendant No. 6. The result was\tthat
\nthe plaintiff was given a decree for a sum of Rs. 55,287-8-0
\nwith interest at 7 1\/2 compound with yearly rests up to\t the
\ndate  of redemption and subsequent interest was\t allowed  at
\nthe  rate  of 6% per annum.  Interest was to  be  calculated
\nfrom  28th September, 1930, on Rs. 52,287-8-0 and. from\t 5th
\nNovember,  1930, on the amount of Rs. 3,000.   Against\tthis
\ndecree, the defendant No. 6 obtained leave to appeal to\t the
\nPrivy\tCouncil\t and  because  of  the\tabolition   of\t the
\njurisdiction  of  the  Privy Council, the  appeal  has\tcome
\nbefore us.\n<\/p>\n
900<\/span><\/p>\n
Mr. Somayya, who appeared in support of the appeal, did\t not
\npress  before  us  the contention raised on  behalf  Of\t his
\nclient\tin  the\t courts\t below\tthat  the  mortgage  was   a
\nfraudulent  transaction\t or  was void  for  want  of  consi-
\nderation.  He assailed the propriety of the judgment of\t the
\nHigh  Court  substantially  on\tthree  points.\t His   first
\ncontention is, that the decision of the High Court  allowing
\na right of redemption to defendants 2 and 3 cannot stand  in
\nview   of  the\tamendment  introduced  by   the\t  Provincial
\nInsolvency  Amendment  Act, 1948, which has  been  expressly
\nmade  retrospective.  The second point taken by the  learned
\ncounsel\t is that the defendant No. 6 should have been  given
\nrelief\tunder the Madras Agriculturists’ Relief Act and\t the
\ndebt  should  have been scaled down in accordance  with\t the
\nprovisions thereof.  It is said that the defendant No. 6 was
\nan agriculturist himself and even if he was not, the  relief
\nunder  Madras Act IV of 1938 was still available to  him  by
\nreason of the original mortgagors being agriculturists.\t The
\nthird  and the last point urged is that in any event  having
\nregard to the finding arrived at by the High Court that\t the
\nstipulation to pay compound interest at an enhanced rate was
\na penalty, adequate relief should have been granted  against
\nit and no compound interest should have been allowed at all.
\nThe  first  point  raised by the  learned  counsel,  in\t our
\nopinion,  is well-founded and must succeed.  There was\tsome
\ndifference of judicial opinion as to whether the powers of a
\nfather under the Mitakshara law to alienate the joint family
\nproperty including the interest of his sons in the same\t for
\ndischarge  of an antecedent debt not contracted for  illegal
\nor   immoral   purposes\t vests\tin  the\t Receiver   on\t the
\nadjudication  of  the  father as an  insolvent.\t  Under\t the
\nPresidency Towns Insolvency Act, this power was held to vest
\nin the Official Assignee under section 52(2) of the  Act(1).
\nAs  regards cases governed by Provincial Insolvency Act,  it
\nwas  held by a Full Bench of the Madras High Court that\t the
\nfather’s power to dispose of his son’s interest in the joint
\nfamily property for satisfaction of his untainted
\n(1)  Sat Narain v. Sri Kishen,<\/a> (1936) 63 I.A. 384.\n<\/p>\n
901<\/span><\/p>\n
debts  was not “property” within the meaning of\t section  28
\n(2)  (d)  of  the Provincial Insolvency\t Act(1)\t ;  while  a
\ncontrary  view was taken by a Full Bench of the\t Patna\tHigh
\nCourt  (2)  . The conflict has now been set at rest  by\t the
\nenactment  of  section\t28A  in\t the  Provincial  Insolvency
\nAmendment  Act\tof 1948 which came into force  on  the\t12th
\nApril, 1948.  The new Section reads as follows :-
\n”  The\tproperty of the insolvent shall comprise  and  shall
\nalways\tbe  deemed to have comprised also  the\tcapacity  to
\nexercise  and  to take proceedings for exercising  all\tsuch
\npowers\tin or over or in respect of property as\t might\thave
\nbeen  exercised by the insolvent for his own benefit at\t the
\ncommencement of his insolvency or before his discharge.”
\nThe language of the section indicates that its operation has
\nbeen  expressly made retrospective.  The result,  therefore,
\nis  that  the power of the defendant No. 1 to  alienate\t the
\ninterest  of  his  sons,  the defendants 2  and\t 3,  in\t the
\nmortgaged  properties  for satisfaction\t of  his  antecedent
\ndebts,\tdid  pass to the Receiver as “Property”\t within\t the
\nmeaning of the Provincial Insolvency Act and consequently OD
\na  sale by the Receiver the interest of defendants 2  and  3
\ndid  vest in the sixth defendant, and he alone must be\theld
\ncompetent to exercise the right of redemption.
\nThe  second point urged by Mr. Soinayya raises the  question
\nas  to\twhether the appellant could claim relief  under\t the
\nMadras\tAgriculturists’ Relief Act.  The High Court  decided
\nthis point against the appellant firstly on the ground\tthat
\nthe  appellant\twas  not  a  debtor  at\t the  date  of\t the
\ncommencement  of the Act, he having acquired no interest  in
\nthe  equity  of redemption at that time.  The  other  reason
\ngiven  is that the defendant No. 6 was not an  agriculturist
\nwithin\tthe  meaning of the Agriculturists’ Relief  Act\t and
\nalthough  he was possessed of agricultural lands  and  hence
\nprima facie came within the definition of an ” agriculturist
\n” as given in section 2 (ii) of
\n(1)  Ramasastralu v. Balakrishna Rao I.L.R. [1943] Mad. 83.
\n(2)  Viswanath\tv. Official Receiver, I.L.R. (1936) 16\tPat,
\n60 (F.B.).\n<\/p>\n
902<\/span><\/p>\n
the  Act,  he  was  excluded  from  the\t definition  by\t the
\noperation of proviso (D) attached to the sub-section.
\nSo  far as the first ground is concerned, section 7  of\t the
\nAgriculturists’\t Relief Act expressly lays down that  ”\t all
\ndebts  payable\tby an agriculturist at the  commencement  of
\nthis  Act,  shall  be scaled down  in  accordance  with\t the
\nprovisions of this chapter”.  The essential pre-requisite to
\nthe application of the provisions of the chapter,  therefore
\nis  the existence of a debt payable by an  agriculturist  on
\nthe date when the Act commenced, that is to say, on the 22nd
\nMarch,\t1938.\tThe learned Judges of the  High\t Court\twere
\ncertainly right in saying that the sixth defendant was not a
\ndebtor\ton that date, as he did not become the owner of\t the
\nequity of redemptin till the 20th of January, 1939, when the
\ndeed  of sale was executed in his favour by the Receiver  in
\ninsolvency.   But  this\t by  itself  is\t not  sufficient  to
\ndisentitle   the   appellant  to  the  privileges   of\t the
\nAgriculturists’\t Relief Act.  It is not necessary  that\t the
\napplicant  for relief himself should be liable for the\tdebt
\non  the\t date that the Act came into-force.   The  right  to
\nclaim  relief  as  is well settled by  decisions(1)  of\t the
\nMadras\tHigh  Court  is\t not  confined\tto  the\t person\t who
\noriginally  contracted\tthe debt, but is  available  to\t his
\nlegal  representatives\tand  assigns  as  well;\t nor  is  it
\nnecessary that the applicant should be personally liable for
\nthe  debt.   The liability of a purchaser of the  equity  of
\nredemption  to pay the mortgage debt undoubtedly  arises  on
\nthe date of his purchase; but the debt itself which has\t its
\norigin\tin  the\t mortgage bond did  exist  from\t before\t his
\npurchase,  and if it was payable by an agriculturist at\t the
\nrelevant  date,\t the  purchaser could  certainly  claim\t the
\nprivileges of the Act if he himself was an agriculturist  at
\nthe  date  of  his  application.   The\tmaterial   question,
\ntherefore,  is whether the mortgage debt was payable  by  an
\nagriculturist  on  22nd March, 1938 ? The  appellant  argues
\nthat  it  was  payable\tby  the\t mortgagors  and  they\twere
\ncertainly  agriculturists.   We do not think that  there  is
\nwarrant for any such assumption on
\n(1)  Vide Periannia v. Sellappa, I.L.R. [1939] Mad. 218.\n<\/p>\n
903<\/span><\/p>\n
the  materials as they exist on the record.  The only  issue
\nbefore\tthe trial Judge was, as to whether defendant  No.  6
\nwas an agriculturist.  There was neither any question raised
\nnor any evidence adduced as to whether defendants Nos.\tI to
\n3 were agriculturists as well.\tIn fact, this aspect of\t the
\ncase was not adverted to by the trial Judge at all.   Before
\nthe  High Court it was argued on behalf of defendant  No.  6
\nthat even if he was not an agriculturist himself, yet if the
\ndefendants 2 and 3 were given relief as agriculturists, that
\nwould  enure  for  his benefit as well\tand  accordingly  he
\ninvited the court to go into the question and hold that\t the
\noriginal  mortgagors were agriculturists.  This the  learned
\nJudges refused to do and dismissed this part of the claim of
\ndefendant No. 6 with these remarks:\n<\/p>\n
“In the present case, the mortgagors have not claimed such a
\nbenefit,  nor  have they adduced any evidence to  show\tthat
\nthey are agriculturists.  We therefore cannot accede to\t the
\nrequest\t of  the  sixth\t defendant that\t the  right  of\t the
\nmortgagors to relief should be investigated merely with\t the
\nobject\t of  giving  an\t accidental  relief  to\t  the\tnon-
\nagriculturist purchaser.”\n<\/p>\n
As the point was not investigated at all, it is not possible
\nfor us to hold that the debt was payable by an agriculturist
\non  the\t relevant  date.   It  may  be\tthat  the  mortgaged
\nproperties  were  agricultural\tlands but it  is  not  known
\nwhether the mortgagors did possess other estates which might
\nbring  them  within  the  purview of  any  of  the  provisos
\nattached  to  the definition.  In these\t circumstances,\t the
\nappellant  must be deemed to have failed to show that  there
\nwas in existence a debt payable by an agriculturist on\t22nd
\nMarch, 1938.\n<\/p>\n
The High Court has held further that the defendant No. 6 was
\nnot an agriculturist because he was the purchaser of certain
\nvillages  at  a\t court sale in respect\tof  which  Peishkush
\nexceeding  Rs. 500 was payable.\t Consequently, he  became  ”
\nland-holder of an estate ” under the Madras Estates Land Act
\nand  could not claim to be an agriculturist as laid down  in
\nthe proviso (D) to section 2 (ii) of the Act.  Mr. Somayya
\n904<\/span>
\nlays stress upon the fact that this purchase on the part  of
\nhis client was merely as a benamidar for defendant No. 5  as
\nhas been held by both the courts below and consequently\t the
\nproviso\t did  not affect him at all.  This  is\ta  debatable
\npoint  upon  which the judicial opinion of the\tMadras\tHigh
\nCourt  itself  does  not  seem\tto  be\tquite  uniform.\t   A
\ndistinction  can certainly be drawn between the rights of  a
\nperson in his own individual or personal capacity and  those
\nwhich he exercises on behalf of another.  On the other hand,
\nif we look to the definition of ” land-holder ” as given  in
\nsection\t 3  (5) of the Madras Estates Land Act,\t it  may  be
\nargued\tthat  a benamidar of an estate, who is\tentitled  to
\ncollect\t rents\tand  is at least the titular  owner  of\t the
\nestate could come within the description.  Having regard  to
\nthe  view taken by us that section 7 of the  Agriculturists’
\nRelief\tAct  is not applicable on the facts of\tthe  present
\ncase,  this question does not really become material and  it
\nis  not necessary for us to express any final  opinion\tupon
\nit.   For  the\tidentical reason section 8 (1)\tof  the\t Act
\ncannot\talso be invoked in favour of the appellant.  It\t may
\nfurther\t be  mentioned\tthat Mr. Somayya in  course  of\t his
\narguments  made it plain that he would not press for  relief
\nunder the Agriculturists’ Relief Act if the high rate of in-
\nterest allowed by the High Court was substantially reduced.
\nThis  takes  us\t to the third point and we  think  that\t the
\nstipulation  as to payment of compound interest in  case  of
\ndefault,  being\t held  to be a penalty by  both\t the  courts
\nbelow,\tthe High Court should not have allowed\tinterest  at
\nthe rate of 71 % compound with yearly rests, The High  Court
\nseems  to have been misled by a statement occurring  in\t the
\njudgment  of  the  trial Judge that  the  original  rate  of
\ninterest was 7 1\/2% compound with yearly rests.\t This is not
\ntrue and as a matter of fact, the original agreement was  to
\npay interest at 7 1\/2 % simple.\t We consider it proper\tthat
\nthe  mortgage  money payable to the plaintiff  should  carry
\ninterest  at the rate of 7 1\/2% simple up to the  expiry  of
\nthe  period  of redemption which we fix at six\tmonths\tfrom
\nthis date,
\n905<\/span>
\nThe  result, therefore, is that we allow the appeal in\tpart
\nand  modify the judgment of the High Court.   A\t preliminary
\ndecree should be drawn up in favour of the plaintiff against
\ndefendant  No.\t6 alone for a sum of Rs.  55,287  annas\t odd
\nwhich  will  carry interest at 7 1\/2 %\tsimple\tper  annum..
\nInterest  will be calculated on Rs. 52,287 on and  from\t the
\ndate  of  the mortgage, while on the balance  of  Rs.  3,000
\ninterest will run from 5th November, 1930.  We make no order
\nas  to\tcosts  of  this court or of  the  High\tCourt.\t The
\nplaintiff will have his costs of the trial court.
\nAppeal allowed in part.\n<\/p>\n
Agent for the appellant: M. S. K. Aiyangar.
\nAgent for respondent No. 1 : Ganpat Rai.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Cheruvu Nageswaraswami vs Rajah Vadrevu Viswasundara … on 18 May, 1953 Equivalent citations: 1953 AIR 370, 1953 SCR 894 Author: B Mukherjea Bench: Mukherjea, B.K. PETITIONER: CHERUVU NAGESWARASWAMI Vs. RESPONDENT: RAJAH VADREVU VISWASUNDARA RAOAND OTHERS DATE OF JUDGMENT: 18\/05\/1953 BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. MAHAJAN, MEHR CHAND HASAN, GHULAM BHAGWATI, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-185012","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nCheruvu Nageswaraswami vs Rajah Vadrevu Viswasundara ... on 18 May, 1953 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/cheruvu-nageswaraswami-vs-rajah-vadrevu-viswasundara-on-18-may-1953\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cheruvu Nageswaraswami vs Rajah Vadrevu Viswasundara ... on 18 May, 1953 - 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