SELVARAJANversusMEENAKSHI AMMAL

                            SELVARAJAN                                         A
                                 v.
                         MEENAKSHI AMMAL

                            OCTOBER 5, 1994

         [K. RAMASWAMY AND N. VENKATACHALA, JJ.)                               B

      Tamil Nadu Agriculturists Relief Act 4 of 1938, as amended in
1973-Sections 3(iii) & 19-Scaling down of debt-11.ent expressly excluded
from definition of debt-Arrears of rent transformed into a debt by viJtue of
a decree-Whether an agriculturist is entitled to scaling down of such a        C
debt-Held, No.

       Petitioner-Appellant, an agriculturists within the meaning of the
Tamil Nadu Agriculturists Relief Act 4 of 1938, as amended. In 1973,
claimed benefit of scaling down of arrears of rent, transformed Into a debt
by virtue of a decree having been granted against the father of the appel-     D
lant, though bis father stood as a surety for the payment of rent due and
payable by one S. This application was opposed by the respondent on the
ground that the petitioner Is not entitled to the benefit of the Act as the
decree is one for recovery of lease arrears and therefore, It Is not a d!lbt
which can be scaled down.                                                      E
       This appeal by special leave arises from the order of the High Court
rejecting the appeal The question for determination Is whether the appel-
lant, though an agriculturist Is entitled to the benefit of scaling doWI! of
sncb a debt u/s 19 of the Act.
                                                                               F
      Dismissing the appeal, this Court

        HELD : 1.1. A reading of section 3(iii) of the Tamil Nadu Agricul-
turists Relief Act 4 of 1938 as amended in 1973, clearly Indicates that the
rent bas been expressly excluded from the definition of debt and the           G
liability of interest which was sought to be scaled down under the Act is a
debt whether secured or unsecured due from agriculturists whether pay-
able under a decree or an order of Civil or Revenue Court or otherwise.
Since the principal debtor had committed default in payme11t of the rent
to the receiver the appellant's father had undertaken to discharge that
liability. In consequence both the appellant and the tenant, bad suffered      H
                                    283
    284                    SUPREME COURT REPORTS (1994) SUPP. 4 S,C.R.

A the decree which was sought to be executed. [287-G, H, 288-A]

          1.2. As the 'rent' due to the landlord stood excluded from !be
    definition of the debt, in view of the statutory charge, the b~nelit of scaling
    down of debt cannot be granted to the appellant though the appellant is
    an agriculturist. [288-C, DJ
B
          Commnr. of Income Tax, Madras v. Rajah lnngenti Rajagopala
    Venkata Narasimha f/.ayanim Bahadur Vara, (1932) 63 MW 20; Ramadoss
    Reddiar v. Munuswami Reddiar, (1940) 2 MW 825 andAppa/a Subbaramiah
    v. Katha Gurumma & Ors., (1942) 1 MW 290, distinguished.
c           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6143 of
    1990.

         From the Judgment and Order dated 18.1.82 of the Madras High
    Court in C.R.P. No. 2389 of 1979.
D
            J. Ramamurthi, R. Mohan and R. Nedumaran for the Appellant.

            Ms. Setia Vaidyalingam for the Respondent.

            The following Order of the Court was delivered :
E         This appeal by special leave arises from the order of the Single Judge
    of the Madras High Court iu CRP No. 2389/79 dated January 18, 1982. The
    case has a chequered history and the facts stated in the judgment are as
    under:

F              One Rajagopal Pillai, the husband of the respondent herein, died
               in 1948 without issues. The respondent herein instituted O.S. No.
              ·359 of 1948, in District Munsifs Court, Thiruthuraipoondi, as heir
               of her husband for recovery of possession of certain properties
               trespassed upon by rwo persons and also for an injunction in
               relation to certain other items. During the pendency of the suit,
G              one T.A. Madadeva Iyer was appointed as the Receiver. On
               27.6.1949, the Receiver granted a lease of the properties in favour
               of one Sattayappa Thever, who agreed to pay 3200 kalams of paddy
               towards rent. On the same day, guaranteeing the performance of
               the obligations of Sattayappa to measure the rent as agreed, the
H              father of the petitioner herein, Sadasiva, executed a security bond
             SELVARAJAN v. M.AMMAL                              285

 in favour of the Court changing certain properties and binding A
himself to pay a sum of Rs. 18,000. The lessee Sattayappa com-
mitted default in the payment of the rents agreed to be paid by
 him and had fallen into arrears of 2587 Kalams of paddy equivalent
to Rs. 17,044. The suit O.S. No. 359 of 1948, District Munsil's court,
Thiruthuraipoondi, was decreed in favour of the respondent. B
Thereafter, on 29.11.1951, the respondent filed I.A. No. 33 of 1952
for directing t.he realisation of the amounts due under the lease
against the father of the petitioner and in the alternative, the relief
assignment of the security bond was prayed for. On 29.3.1952, this
application was allowed and on 8.1.1953, the security bond ex-
ecuted by the father of the petitioner on 27.6.1949 was assigned in C
favour of the respondent herein. On the basis of such assignment,
she instituted a suit in O.S. No. 11 of 1953 for recovery of arrears
against Sattayappa and Sadasiva (the father of the petitioner). On
22.12.1955, the suit was decreed against Sattayappa and in so for
as the claim of the respondent against Sadasiva was concerned, D
her remedy was held to be by way of enforcement of the security.
Thereupon on 2.1.1956, the respondent filed O.P. No. 29 of 1956
for enforcement of the security against the surety and the
petitioner, among others, was also impleaded as the second
respondent. ·Meanwhile, in 1956 there was a partition between E
Sadasiva and the petitioner and his sisters and the property over
which the security bond was executed by Sadasiva on 27.6.1949,
fell to the share of the petitioner. In I.A. No. 30 of 1976 in O.P.
No. 29 of 1956, the petitioner claimed that he is an agriculturist,
that he is entitled to the benefits of Tamil Nadu Act 8 of 1973 and
that the decree in O.P. No. 29 of 1956 has to be scaled down. ':'he
                                                                        F
petitioner also took up the position that though the amount sought
to be realised was lease arrears the respondent was only enforcing
the charge created under the security bond and therefore, the
amount to he realised had nothing to do with the lease amount
and therefore, the liability has got to be scaled down. This applica- G
tion was opposed by the respondent on the ground that the
petitioner is not entitled to the benefits of the Act as he has been
paying agricultural income-tax and the decree is also one for
recovery of lease arrears and therefore, it is not a debt which can
be scaled down. An objection that the application is also barred H
    286                SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A         by res judicata was raised.

              From the said facts, it will be seen that the father of the
          petitioner had guaranteed on 27.6.1949 the performance of the
          obligations of Sattayappa under the lease deed executed by him in
          favour of the Receiver who was appointed in O.S. No. 359 of 1948,
B
          D .M.C. Thiruthuraipoondi. The execution of the security bond by
          Sadasiva was to discharge the liability of Sattayappa, in the event
          of Sattayappa defaulting in keeping up his obligations under the
          lease .dated 27.6.1949. Under s.128 of the Indian Contract Act, the
          liability of Sadasiva as a surety was co-extensive with that of
c         Sattayappa, unless it was otherwise provided in the contract. It is
          not the case of the appellant that there was a contrary provision
          in the contract. That would mean that the liability of Sadasiva to
          pay the rent was no less or no more than that of Sattayappa. In
          other words, the liability of Sadasiva to pay the rents existed and
D         extended to him at the same time as Sattayappa's. If the liability
          of Satta}appa and the liability of Sadasiva are the same, then the
          liability would be one for payment of rent and therefore, there
          cannot be any scaling down of such a liability in accordance with
          the provisions of the Act. It may be that as a result of the default
E         committed by Sattayappa separate steps had been taken by the
          respondent to enforce the security against Sadasiva. In other
          Words, the default by Sattayappa was the occasion to enforce the
          liability to pay the rent against Sadasiva which had already
          remained in Sattayappa as well as Sadasiva as a result of the
          security bond dated 27.6.1949. The only effect of the execution of
F
          the secnrity bond by Sadasiva was that it enabled the respondent
          to look to Sadasiva for performance in the same manner in which
          the respondent could have looked to Sattayappa for the payment
          of rent. The mere circumstance that proceedings in O.P. No. 29
          of 1956 had to be taken for enforcing the liability would not make
G         any difference to the basis of the liability which was one for
          payment of rent.

              In other words, the decree obtained in this case was one for
          rent against Sadasiva himself and would therefore be outside the
H         definition of the word "debt".
                     SELVARAJAN v. M.AMMAL                                 '}JJ,7

      Learned cousel for the appellant strenously contended that the ar- A
rears of the rent, when had been transformed into a debt by virtue of a
decree having been granted against Sadasiva - the father of th.e appellant,
though his father stood as a surety for the payment of rent due and payable
by the Sattayappa thevar to the Receiver who was administering the State
on behalf cf the Court, and when the appellant is an agriculturist within B
the meaning of the Tamil Ndu Agriculturists Relief Act 4 of 1938 as
amended in 1973, that under s.19 of that Act the appellant is entitled to
scaling down of the debt. We find no force in the contention. Debt has
been defined under s.3(iii) of the Act thus:

        S.3(iii) : '"debt' means any liability in cash or kind, whether secured     C
        or unsecured, due from an agriculturist whether payable under a
        decree or order of a civil or revenue court or otherwise, but does
        not include rent, as defined in clause (iv) of 'Karartham' as defined
        in s.3 of the Malabar Tenancy Act, 1929 (Tamil Nadu Act XIV of
        1930)."
                                                                                    D
Rent also has been defined under s.3 (iv):

        "'rent' means the rent payable by a cultivating tenant under the
        Tamil Nadu Cultivating Tenants (Payment of Fair Rent) Act, 1956
        (Tamil Nadu Act XXXIV of 1956), or under the Tamil Nadu
                                                                                    E
        Public Trusts (Regulation of Administration of Agricultural
        Lands) Act, 1961 (Tamil Nadu Act LVII of 1961) or the rent as
        defined by the Tamil Nadu Estates Land Act, 1908, whether a
        decree ·or order of a civil or revenue court has been obtained
        therefore or not, and includes interest payable thereon but does
        not include costs incurred in respect of the recovery thereof               F
        through a civil or revenue court or the share of the land cess
        recoverable by the landholder under any of law for the time being
        in force in this State."

      A reading of the said proviso clearly indicates that the rent has been G
expressly excluded from the definition of the debt and the liability of
interest which was sought to be scaled down under the Act is a debt _
whether secured or unsecured due from agriculturists whether payable
under a decree or an order of Civil or Revenue Court or otherwise. Since
the Principal debtor had committed default in payment of the rent to the
receiver - the appellant's father had undertaken to discharge that liability. H
    288                   SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.

A   In consequence, both the appellant and the tenant, had suffered the decree
    which was sought to be executed. It is, no doubt, true as interpreted by the
    High Court of Madras in Commnr. of Income Tax, Madras v. Rajah Inngenti
    Rajagopala Venkata Narasimha Rayanim Bahadur Vara, (1932) 63 MLJ
    p.20 followed in Ramadoss Reddiar v. Munuswami Reddiar, (1940) 2 MLJ
    825 andAppala Subbaramiah v. Katha Gurumma & Ors., (1942) 1 MLJ 290
B   that when the liability has undergone the change the debtor is not entitled
    to the benefits of the provisions under the Act. The facts in those cases are
    entirely different from the facts in this case. In those cases the debt was
    crystalised into pronote. Debt incurred was on the basis of promissory note
    and a decree passed thereon was sought to be recovered in the execution
c   proceedings. The definition of 'debt' was amended and the "rent" due to
    the landlord stood excluded from the definition of the debt. In view of the
    statutory change, interpretation given by the Madras High Court preceding
    the amendment would be of little assistance to the appellant. Moreover the
    facts mentioned above clearly makes the case distinguishable from the facts
D   in those cases. In that view we cannot give the benefit of scaling down of
    debt to the appellant though the appellant is an agriculturist. The appeal
    is accordingly dismissed but in the circumstances without costs.

    A.G.                                                      Appeal dismissed.