KOOSAMPUDI SUNDARA RAMARAJU Vs. YENDLURU RAMACHANDRAIAH
HIGH COURT OF ANDHRA PRADESH
KOOSAMPUDI SUNDARA RAMARAJU
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(1.) The petitioner is the appellant. His father purchased a plot of
lard from one Sivaramaraju who was indebted to the respondent. For the purchase
price, his father undertook to pay a portion of Sivaramaraju's debt to the respondent
and in pursuance of the Havala, his father executed a promissory note in favour
of the respondent for Rs. 1,200 in 1928. The promissory note was thereafter renewed
from time to time and ultimately O.S. No. 160 of 1944 was filed and a decree obtained.
The second appeal arises out of the application filed by the petitioner to scale
down the debt by treating the liability as a continuation of the debt of
Sivaramaraja. The short question for consideration in the Second Appeal, is, whether the
Courts below are right in holding that by reason of the Havala, the liability undertaken
by the petitioner's father was a fresh debt and was not liable to be scaled
down under section 8 of Madras Act IV of 1938 ?
(2.) The learned advocate for the appellant argued that both under Explanation
(III) and Explanation (IV) of the Madras Amending Act XXIV of 1950, his client
was entitled to succeed. For appreciating his argument, it is necessary to set out the
terms of Explanation (III) and Explanation (IV) to section 8 which are as follows :-
Explanation. III. Where a debt has been renewed or included in a fresh document executed
before or after the commencement of this Act, (whether by the same debtor or by his heirs, legal
representatives or assigns or by any other person acting on his behalf or in his interest and whether in favour
of the same creditor or of any other person acting on his behalf or in his interest), the principal originally
advanced together with such sums, if any, as have been subsequently advanced as principal
shall alone be treated as the principal sum repayable under this section.
Explanation IV. Where a debt has been split up, whether before or after the commencemen
of this Act, among the heirs, legal representatives or assigns of a debtor or of a creditor and fresh
documents have been executed in respect of the different portions of such debt, the provisions of this
ection shall continue to apply in respect of each of the different portions.
(3.) The expression " renewed " has been the subject of judicial interpretation both
in England and in this country. In Barber v. Mackrell, 68 Law Times 29. Lord Justice Lindley says :
"A bill is renewed when another bill is taken in its place, the parties to the bill and the amount
of it being the same, though perhaps in some cases the interest due on the one bill is added."
This dictum was followed by a Bench of the Madras High Court in Neelappa
Reddiar v. Solaimuthu Udayan, (1940) 2 M.L.J. 517 : I.L.R. (1941) Mad. 28.
Wadsworth, J., holding that the renewal of a debt
ordinarily means " the substitution of a fresh contract between the same parties for
the same 'amount or the same amount plus accrued interest." In Ramaswami
Pillai v. Sankara Mudaliar, (1950) 1 M.L.J. 224. the above view was accepted and followed. I am therefore
clear that the liability undertaken by the petitioner's father to pay a portion
of Sivaramaraju's debt and executing a fresh promissory note therefor, cannot, in
my sense, be regarded as a renewal of Sivaramaraju's liability to the respondent.;
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