TaxTMI 
TaxTMI 
1960 (4) TMI 86
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation of Section 19(2) to a debt in respect of which a decree has been passed are the same or Different from those applicable under Section 7 of the Act. 2. This reference came to be made under the following circumstances. One Arunachalam Chettiar was carrying on money lending business in partnership with his two sisters and another Subramaniam Chettiar, at Bagale in Burma prior to 1916. After Arunachala died in 1916 Subramania carried on the business with the remaining partners. The amount due to Arunachala was ascertained as ₹ 10824-3-3 and it was credited in the nadappu account of the firm. Subramania died in 1924 and thereafter the business was continued by his wife in partnership with one Palaniappa and others, Palaniappa in his turn died in 1,930 and thereafter his sons who are defendants 1 and 2 in the suit out of which this litigation emanates were substituted in his place and the business was being carried on. In 1935 disputes arose among the partners. By this time the sum of ₹ 10824 and odd invested in 1916 as due to Arunachala had swelled into ₹ 55933-15-0. According to an award of the arbitrators passed on 31-7-1935 this amount was apportioned betw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erring Bench felt a doubt as to the correctness of the ruling in AIR1960Mad207 (FB) the questions mentioned at the beginning of this judgment have been referred to us for decision, 4. The salient facts may be stated in order to appreciate the contentions of the parties. The deposit was made in 1916 in a partnership firm. In 1935 this deposit was split up under an award of the arbitrators and the defendants in the suit became liable for the sum of ₹ 20975 and odd, as deposit. On 4-2-1944, the suit was filed and it was dismissed on 18-2-1946. On appeal the suit was decreed in full on 9-3-1951 for the entire claim in the plaint. It is common ground that the transaction in this case was a deposit and that a demand for payment of the deposit as contemplated in Article 60 of the Limitation Act was made sometime in 1941, that is after the Madras Act IV of 1938 had come into force. Both the learned Advocate-General appearing for the appellant and Mr. Viswanathan appearing for the respondent agreed that question No. 3 referred to us did not really arise separately for consideration. But the answer to questions 1 and 2 depends upon the interpretation of the phrase "All debts pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....date irrespective of the fact whether the debt had become eligible or not. 7. Mr. Viswanathan learned counsel for the respondent on the other hand contends that this phrase can only apply to debts which had become exigible at the commencement of the Act, that is 22-3-1938 and he refers to the language of Section 19 (2) of the Act in support of his contention that the phrase "the debt payable at such commencement" could have no reference to liabilities which had not become accrued and in respect of which a cause of action had not arisen. 8. Before referring to the authorities cited on both sides, we may at the outset mention that the term "payable" in connection with a debt has both, a primary and a secondary meaning or in other words, a basic and an extended meaning The moaning of the word "payable" is thus given in the "Shorter Oxford Dictionary", "of a sum of money, bill etc., that has to be paid; due, falling due (usually at or on a specified date or to a specific person)." In the dictionary of English law, by Earl Jowitt the meaning of the word "payable" is thus rendered:- "A sum of money is said to be payable....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g by this as well the title and preamble as the purview or the enacting part of the statute." In Rein v. Lane, 1867 2 QBD 144 ', Blaclnmra J. said: "It is I apprehend in accordance with the general rule of construction that you are not only to look at the words but you are to look at the context, collocation and the object of such words relating to such matter and interpret the meaning according to what would appear to he the meaning intended to be conveyed by the use of the words under the circumstances." In re, Regent Street (No. 12) Oxford, 1948 Ch. 735 , Jenkins, J. stated thus: "In the construction of a statute, it is, of course, at all times and under all circumstances permissible to have regard to the state of things existing at the time the statute was passed, and to the evil which as appears from its provisions it was designed to remedy." We hold that these principles are applicable to this case and in that view we can refer to the purpose of the legislation in question. Undoubtedly, Act IV of 1938 was intended to give relief to indebted agriculturists and to restrict the rate of interest payable by them and the method adopted for achiev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion, 1921 3 K. B. 110 and other decisions to hold that in the case of a. deposit payable on demand the demand was essential to make the debt payable and enforceable and consequently before the demand was made such a debt could not he said to be payable. We have no quarrel with the proposition of law laid down in Joachimson's case that a deposit which under the terms of the contract was payable only on demand could be used for only after the demand was made. The scope of the rule in this case was considered in Arab Bank Ltd. v. Barclay's Bank, 1954 A. C. 495. Certain observations occurring in his judgment seem to us to be apposite. In order to under these observations it is necessary to set out the facts of the case briefly: In 1939 the Arab Bank opened a current account with the Barclay's Bank at its Jerusalem branch and deposited a certain sum of money,. The mandate held by Great Britain over Palestine expired by the midnight of May 4, 1948. Immediately thereafter war broke out between Israel and the Arab states and by reason of the hostilities in Jerusalem performance of contract became impossible. The branch of Barclay's bank at Jerusalem was closed on the day....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that a debt may be payable but still not enforceable at a particular point of time. If we understand it aright the rule laid down in Joachimson's Case, 1921 3 K.B. 110 only serves to obviate the necessity of the customer suing for the return of every item of deposit under peril otherwise of its recovery being barred by limitation. Mr. Viswanathan contended that the term "payable" by itself may be of neutral significance but in the phrase we have to consider it occurs in conjunction with the point of time at which the debt became payable. From this he argued that the term "payable" had been used in this phrase only in the sense of being exigible "or enforceable or recoverable at a particular point of time. He instanced his argument by referring to a mortgage debt the payment of which was specifically provided by the mortgage deed to be due on a date occurring beyond the date of the commencement of Act IV of 1938 and posed the question how could such a mortgage debt be payable at the commencement of the Act, while the contract itself provided that it was payable at a future date. Our short answer to this argument; is that the term "payable" i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in any court of law at the commencement of the Act and that the Act left out of its purview the class of cases in which debts though incurred before the Act became enforceable through the medium of law courts after 22-3-1938. 9. The word "due" occurring in the definition of debt in Section 3(iii) is a term of wide import and according to the dictionary of English law it means' "anything owing, that, which one contracts to pay or perform to another, that which law or justice requires to be paid or done. As applied to money "due" means either that it is owing or that it is payable. In other words, it may mean that the debt is payable at once or at a future time." Having regard to this we have no doubt that the term "due" occurring in Section 3(iii) of the Act can only be given its extended meaning and not the restricted meaning. Consistent with this definition of debt due by an agriculturist we can only apply, the primary meaning of the word payable, in interpreting the phrase "debt payable at the commencement of this Act" occurring both in Sections 7 and 19(2) of the Act. To hold otherwise the learned Judges who decided Ra....