1. This petition under the Maharashtra Debt Relief Act, 1975 represents a glaring instance of misplaced enthusiasm of the AuthorisedOfficer under the Act who has transgressed all limits of procedure, propriety and principles of justice.
2. One Bharat Dandekar is a resident of Chiplun. He claims to own a house and some adjoining land as his ancestral property. He had taken loan from time to time from the present petitioner Punamchand Oswal and during the course of his dealings executed an agreement dated 29-12-1971 to sell his property. By that time the loan was Rs. 4,000/-. Subsequently Bharat incurred further liability for the purpose of continuing his own business or profession of preparing brass and copper vessels. Ultimately the total liability amounted to Rs. 8,000/-.
3. When this happened he executed a sale-deed dated 14th Oct. 1974 for a consideration of Rs. 8,000/- in respect of his house along with the open plot of ground in favour of the petitioner. A regular sale-deed was executed as registered sale-deed under the Indian Registration Act. The recitals in the sale-deed show that the vendor gives a warranty of title and purports to put the purchaser in possession as full owner. The document appears to have been drafted and written by professional bond-writer, who has included the usual warranties and recitals in the document, which are always found in a normal sale-deed. In spite of the recitals in the document that possession was transferred to the purchaser, some dispute is being raised before us by the respective parties but it is not necessary to take cognizance of that dispute in this litigation.
4. After that transaction two sons of Bharat, viz. Dattatraya and Nandkumar; both major, made an application to the Tahsildar of Chiplun which is dated 2nd Feb. 1976. In this application they alleged that their father had formerly borrowed Rs. 4,000/- on two different occasions and mortgaged the house. However, by making some kind of accounts the total amount due from the father was found to be Rs. 8,000/- and for that an agreement was got executed on 29th Dec. 1971. However, between 29-12-1971 and 1974 the present petitioner has repaid Rs. 5,000/- plus Rs. 4,000/- in all Rs. 9,000/-. However, he has not given any kind of receipt to the father. They also pointed out that in 1968 Rs. 1,500/-were borrowed by the father by way of earthquake tagavi loan. The present petitioner has obtained forcibly a sale-deed of the house from the father ofthose two applicants on 14-10-1974. The two sons had no idea whatsoever about that transaction. However, under the provisions of the Debt Relief Act dated 22-8-1975 the house should be restored to their possession.
5. On the basis of such an application, the Tahsildar issued a notice dated 14-12-1976. That notice purports to have been signed by the Tahsildar, Chiplun, and addressed bo the present petitioner. It says that the applicant Dattatraya Dandekar has applied that the present petitioner has taken forcible possession of his house. The petitioner should, therefore, remain present in the office of the Tahsildar on 22-2-1977 in connection with the enquiry of that house. The petitioner appeared before the Tahsildar and came to know that this purports to be an application under the Debtors Relief Act by the sons of Bharat who in fact had sold the house to him. He accordingly gave his say in writing and pointed out that there was no debt at all but the transaction was one of sale which was voluntarily undertaken by Bharat. The sons have no cause of action whatsoever and the petition is improperly filed.
6. After making such enquiry as the Tehsildar thought fit, viz., after recording statements of the parties and getting the sale-deed produced on record, the learned Tehsildar came to the conclusion that the sons who have applied can be treated as joint debtors with the father as the property appears to be ancestral property. He further held that because there was an agreement of sale in the year 1971, the sale-deed subsequently executed in 1974 must be a mortgage-deed. If, therefore, the transaction is one of mortgage and that debt was still outstanding on 22nd Aug. 1975, the debt was deemed to have been discharged and the property ought to be returned to the debtor without any encumbrances. With that conclusion, he passed the order dated 1-4-1977 declaring that the debt was discharged and directing the property to be handed over to the petitioners before him, viz., respondents Nos. 1 and 2. Peeling aggrieved by that order, the so called creditor has filed the present petition.
7. Having gone through the original record and after hearing the learned Counsel on either side, we are satisfied that in this litigation not only every step has been irregular and unlawful but it is also highly unjust. The very basic objection to the proceeding is that thereis no debt at all. The transaction is expressed in the form of a sale-deed for an amount of Rs. 8000/-. The recitals in the sale-deed are those of a normal sale-deed and not even of a mortgage by conditional sale. There is no stipulation at all that the property is to be returned on repayment of certain amount etc. If the transaction is expressed in the form of a sale-deed we do not understand how the Tahsildar acting under the provisions of the Debt Relief Act can go beyond the document and adjudicate that the transaction appears to be one of mortgage. The provisions of the Maharashtra Debt Relief Act 1975 do not include any section which permits the Authorised Officer to go beyond the transaction and find out the real nature thereof.
8. The legislature was fully aware of the laws passed by itself in the past, viz. Deccan Agriculturists Relief Act 1902 as well as the Bombay Agricultural Debtors Relief Act. Both these Acts included provisions which permitted allegations to be made that a transaction of sale was in fact a transaction of loan or mortgage and when such allegations were made notwithstanding the provisions of the Evidence Act or any other Act for the time being in force, it was permissible to lead evidence and it was obligatory upon the Court to weigh that evidence and hold whether the alleged transaction of sale was in fact a transaction of loan or mortgage. When we look at the Maharashtra Debt Relief Act no such provision is to be found.
9. A debt has been specifically defined as a liability either in cash or kind which is outstanding on the appointed day, viz. 22nd Aug. 1975. In the absence of any provision as mentioned above, the debt under the Maharashtra Debt Relief Act 1975 has got to be a debt which is - obvious and is beyond doubt. In any case it must have an appearance of a debt and it is entirely against the provisions of the Act to adjudicate whether a transaction of a sale is a mortgage at all. This was the basic objection to the petition itself and if the Tahsildar had applied his mind properly to the application of the two sons of Bharat, he should have merely rejected the application on the ground that such an application does not lie under the Act.
10. Apart from that, Mr. Walavalkar was quite right in urging that the entire procedure followed by the Tahsildar was contrary to the Debt Relief Act. Heclosely took us through the various provisions of the Act. The definition of debt is to be found in clause (e) of Section 2 which means any liability in cash or kind, outstanding on the appointed day, being a liability arising out of a loan with interest if the loan is taken by a worker and with or without interest, in any other case, whether secured or unsecured, due from a debtor whether payable under a decree or order of any court or otherwise. It is, therefore, clear that there has got to be a liability arising out of a loan outstanding on the appointed day. On the definition of this word 'debt' a sale-deed is excluded from its operation and could not be covered. Mr. Walavalkar then pointed out to us definition of the 'debtor.' That definition is a very wide one and it covers a marginal fanner, rural artisan or rural labourer whose total income from all sources did not exceed two thousand and four hundred rupees during the year immediately before the 1st day of Aug. 1975, and a worker whose total income from all sources did not exceed, if living in an urban area six thousand rupees during the year immediately before the said date, and if living elsewhere four thousand and eight hundred rupees during that year. The 'expressions marginal farmer, rural artisan, worker etc. are defined.
11. Mr. Walavalkar argued and with some force that this definition under clause (f) of Section 2 is divested from the existence of debt. If a person falls under any of the descriptions and has the income within the limits specified by the definition of 'debtor'; then he becomes a debtor whether he has actually any debt to pay or not. Even though there is no liability arising out of any loan a person could be described as a debtor if he answers the description of that clause. That is true. However, the legislature wanted to make a use of an artificial definition, for describing a section of the society which should be given relief. Having so described the class of people for whom relief was meant, the actual relief is provided if there is an outstanding debt on a particular day, viz., the appointed day. Though it is rather odd, we do not find it unlawful to define debtor in the manner in which it is done by the Maharashtra Legislature. On the evidence before him and by treating the application of the two sons as if it is a joint application by the father and the sons, the Tahsildar has found that the total income of all the three does not exceed Rs. 2400/- in ayear immediately preceding the appointed day and therefore they are held to be the debtors under the Act.
12. Mr. Walavalkar had no serious argument to address in that behalf. What he pointed out was and with considerable force that application of the present type could not have been addressed to the Tahsildar at all. The correct procedure under the Act is laid down in section 4 (e) in the first instance. Where there is pledged or mortgaged property of a debtor, whose debt is deemed to have been discharged on the appointed day, the debtor has to make an application in writing to the creditor who is to pass a receipt to the debtor of having received an application. If the creditor refuses to pass a receipt then the debtor may get the application endorsed to that effect under the signature and date of any of the officers referred to in Section 6 or by any person authorised by them in that behalf. After this procedure of applying to the creditor himself is followed and if it does not give him any relief, he has to approach one of the officers mentioned in Section 6. Those officers are either Commissioner of Police where there is one, and elsewhere the District Magistrate or the Superintendent of Police. They have to consider the application of the debtor and to assist him in recovering back the pledged or mortgaged property by the use of reasonable force if necessary and restore the pledged or mortgaged property to the debtor.
13. However, when Commissioner ofPolice or the District Magistrate or the Superintendent of Police is so enforcing the provisions of the Act for the purpose of restoring back the pledged or mortgaged property, the creditor can raise a question that the person who is claiming to be a debtor was not a marginal farmer, a rural artisan, a rural labourer or as the case may be a worker and that there is no eligibility in the so-called debtor to ask for relief under the Act Or any other ground. The creditor has then to apply to the Authorised Officer and raise a dispute. The Authorised Officer has to hear the parties in that case and dispose of all the disputes on merits.
14. That appears to us to be the correct procedure under the Act and to that extent we are in agreement with Mr. Walavalkar. Admittedly nothing of that kind has been done in this case.
15. Apart from the fact that the debtor apparently under the transaction was thefather, who never applied to the creditor, the sons who styled themselves as debtors or persons affected have also not applied to the creditor, the present petitioner, as required by clause (e) of Section 4 of the Debt Relief Act. An application by a debtor to the Tahsildar is not conceived of by the Act. If the creditor had declined to give any relief to the debtors in spite of application, the debtors could have gone to the officers mentioned in Section 6 for assistance. During the implementation of the provisions of Section 4 it the creditor wanted to raise question permissible under Section 7 he would have applied to the Tahsildar, who is the Authorised Officer under that section. The entire procedure has been therefore topsy-turvy and there is no compliance with the provisions of the Act at all.
16. Assuming somehow that application of the debtors was to be treated by the Tahsildar as a dispute required to be decided under Section 7, we find that the Tahsildar has acted without jurisdiction and contrary to the obvious facts of the litigation. The creditor does not seem to seriously challenge the status of respondents Nos. 1 and 2 as debtors. However, he had raised a very serious question by the written statement that there is no debt at all on the appointed day. The plain reading of the application of respondents Nos. 1 and 2 itself shows that the? debt was already paid without a receipt and that a forcible sale-deed has been obtained by the present petitioner from their father. We are unable to understand how and under what laws of this land a Tahsildar who is Authorised person under the Debt Relief Act is entitled to inquire into the allegations of forcible sale-deed obtained by one person from the other. This is a matter which can at best lie within the powers of Civil or Criminal Courts but the Tahsildar, as Authorised Officer, does not seem to have been vested with the right to inquire into such allegation.
17. After the so-called creditor, the present petitioner, appeared and filed his present statement, the Tahsildar should have at once stayed his hands off this litigation and rejected the petition. On the contrary, he has taken upon himself the responsibility of interpreting the sale-deed as a mortgage because it is preceded by an agreement to sell. To say the least. this itself is a perverse approach. In almost all transactions of sales there are prior agreements to sell and earnest money is very often paid at the time ofthe execution of the agreement to sell. A mere fact of an existence of an agreement of sale can never amount to the transaction of sale itself being a mortgage. Where it is permissible to challenge the real nature of the sale that might be one of the considerations as forming part of the total evidence before the Court. But so far as the present Debt Relief Act is concerned, we think no doubt that the Tahasildar has not only acted beyond the jurisdiction vested in him but has somehow arrived at a conclusion upon irrelevent facts. Not only, therefore, the entire proceeding suffers from procedural errors but it basically suffers from want of jurisdiction and the whole proceeding has been illegal.
18. In that view of the matter, the order of the Tahsildar dated 1-4-1977 is quashed. The petitioner will be entitled to his costs of the petition from the respondents.
19. Rule made absolute with costs.
20. Rule made absolute.