A.L.S.P.Pl.

Subramania Chettiar
and Ors.
Vs. AIR 1951 Mad 48, (1951) ILR Mad305

Moniam P. Narayanaswami
Gounder
INTRODUCTION

- Bench- K. Subba Rao, A.S. Panchapakesa Ayyar and

Balakrishna Aiyar, JJ.
- Citation- AIR 1951 Mad 48, (1951) ILR Mad305
- The case revolves around the discharge of surety's
liability.
- Decided On: 16.08.1950.
FACTS
Specifics of the case
❏ Plaintiff 1 (creditor) filed a suit to
❏ recover Rs. 6746 against 5 defendants.
❏ Defendants 4 and 5 (principal debtor)
were the minor sons of defendant 1, and
defendant 3 was their surety.
❏ The principal debtors were agriculturists
and the surety was a non agriculturist.

The principal debtors
Jupiter
claimed that they were
entitled to a scaling down
of debt under the Madras
Agriculturists Relief Act.
To this the surety said
that he too was entitled
to the scaling down.
Procedural history
The learned Subordinate
Judge held that even
though the surety
(defendant 3) was not an
agriculturist, the letter of
guarantee clearly stated that
he would not be liable for
the amount scaled down.
After the death of
respondent 1 (creditor),
respondent 2 his legal
representative, filed this
appeal against the surety,
his only contention being
that the lower courts should
not have granted the surety
of scaling down.
ISSUES
 Issues

Whether or not the scaling down of the debt

amount under the Madras Agriculturists’ Relief Act
extinguishes the debt in itself ?

Whether or not the provisions under the Madras

Agriculturists’ Relief Act would still hold a
non-agricultural surety responsible for the whole
debt even when the principle debt was lowered ?
RULE
 SECTION 126

Indian Contract -
-
“Contract of Guarantee”
“Surety”
Act, 1872 -
-
“Principal Debtor”
“Creditor”
 SECTION 128

Indian Contract - The liability of the Surety is “Co-extensive”

with that of the principal debtor, unless it’s
Act, 1872 stated otherwise by the contract.
 SECTION 133-139

Indian Contract - These sections mention the discharge of

surety’s liability, which can occur due to
Act, 1872 variance in terms of contract, creditor’s
conduct, etc.
The Limitation Law of limitation prescribes the time at the end of
which a person is liable to a suit, shall become

Act, 1963 exempt from answering therein.

 SECTION 7

- Debts payable by agriculturists to be scaled

down.

Madras No sum in excess of the amount as scaled

down shall be recoverable from him or from
Agriculturists any land or interest in land belonging to him:
nor shall his property be liable to be attached

Relief act, 1938 and sold or proceeded against in any manner

in the execution of any decree against him in
so far as such decree is for an amount in
excess of the sum as scaled down in this
chapter.
 Section 8(4)

Madras Subject to the provisions of sections 22 to 25,

nothing contained in sub-sections [*], (2) and (3)
Agriculturists shall be deemed to require the creditor to refund
any sum which has been paid to him, or to increase

Relief act, 1938 the liability of' a debtor to pay any sum in excess of
the amount which would have been payable by him
if this Act had not been passed.
 SECTION 19

Madras - Where before the (publication of the Tamil Nadu

Agriculturists Relief (Amendment) Act, 1972) a
court has passed a decree from the repayment
Agriculturists of a debt, it shall, on the application for an
judgement- debtor who is an agriculturist or in
Relief act, 1938 respect of a Hindu joint family debt, on the
application of any member of the family whether
or not he is the judgement-debtor, apply the
provision of this Act to such decree and shall
amend the decree accordingly or enter
satisfaction.
ANALYSIS
 PETITIONER’S ARGUMENTS

Argument 1: a barred debt is a lawful debt (Section 60 of ICA) and that the
Madras Agriculturists' Relief Act never intended to extinguish the debt by
scaling down

❏ Section 7 of the Madras Agriculturists’ Relief Act: “No sum in excess of the amount
as so scaled down shall be recoverable”
 PETITIONER’S ARGUMENTS

Argument 2: surety is not discharged from his liability in case of a barred

debt
❏ Subramania Aiyar v. Gopala Aiyar
❏ Section 133-139 of the ICA are exhaustive in the case of discharge
❏ Section 128 is not applicable
 Judge’s Rebuttal

Section 8(4), Madras
Agriculturists' Relief Act
Suryanarayana v.
Alwandararao
All the
se
"shall be deemed to require the intentio points show t
n he
creditor to refund any sum which Agricu of the Madras
ltu
has been paid to him," Relief A rists'
ct
or extin to discharge
guish th
e debt
No consideration for the excess
amount promised by the
agriculturalist debtor

No amendment of the decree is required if the debt is

Section 19, not extinguished pro tanto
Madras Agriculturists'
Relief Act The entering of satisfaction can only be done when
the debt’s satisfied,discharged or extinguished, and not
when the remedy is merely barred.
 Judge’s Rebuttal

It does not follow that a non-agriculturist

debtor can in no circumstances be benefited
Arunachalam v.
by the scaling down of a debt under the
Seetharam Naidu
provisions

❏ Marina Ammayi v. Mirza Bakhar Beg

❏ Satyanarayanmurthi v. Sathiraju
Similar judgements ❏ Thathachariar v. Sivasubramania
Chettiar

Sami Iyer v. Ramaswami Surety’s liability is secondary, and it is no less or

Chettiar no more than that of the principal debtor
 Judge’s Rebuttal
Section 128: Surety’s liability is co-extensive
Section 145: Surety’s right- implied indemnity

Principal Debtor Creditor

Agriculturalist
(Plaintiff 1)
(Defendant 1 & 2)

Surety
Non-agriculturalist
(Defendant 3)
 CONCLUSION
- It was believed that Subramanian Chettiar v. Batcha Rowther (AIR
1942 Mad 145) was incorrectly decided, and a response to the
reference was made as follows:

A surety who is not an agriculturalist will not be held liable for

the entire debt. when the principal debt has been reduced in
accordance with the Madras provisions Agriculturists' Relief
Act, but will only be liable to the extent of the reduced debt
payable by the principal debtor.

- The appeal was dismissed with half the costs of the respondent, in
the circumstances, and order accordingly.
Thank you!