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Shankar Vishnu Burhanpurkar Vs. Maneklal Haridas Gujrathi - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 44 of 1940
Judge
Reported inAIR1940Bom362; (1940)42BOMLR873
AppellantShankar Vishnu Burhanpurkar
RespondentManeklal Haridas Gujrathi
DispositionApplication rejected
Excerpt:
.....act (c. p. act ii of 1933)-debt declared discharged by central provinces debt conciliation board -debt contracted in bombay province-suit in respect of debt in civil court in bombay province-whether court can entertain suit-conflict of laws- incidents of contract-governed by law where contract made-applicability of rule to provinces in british india.; the discharge of a debt by the debt conciliation board of the central provinces, constituted under the central provinces debt conciliation act, 1933, in respect of a promissory note made in the province of bombay, is no defence to a suit filed in a court in the province of bombay to recover the amount of the promissory note.; where questions arise as to whether the incidents of a contract should be governed by the law of one country or of..........recover a debt which has been duly declared to be discharged by the debt conciliation board of the central provinces. the debt was incurred under a promissory note made on april 9, 1933, by the defendant in favour of the plaintiff. the note was made at nandurbar, which is within this province, and it is admitted that there is nothing in, the terms of the promissory note which determines the law of the contract; therefore, under the ordinary rule, the law of the contract is the law of the place where the contract was made.2. the central provinces debt conciliation act was passed in the year 1933 and extends to the whole of the central provinces. a 'debtor' is defined as a person who earns his livelihood mainly by agriculture and who falls within one of the descriptions of occupancy.....
Judgment:

John Beaumont, Kt., C.J.

1. This is a revision application against an order made by the District Judge of West Khandesh. It raises a question which; is likely to become of growing practical importance, because of the habit, which seems to be extending, of introducing Conciliation Boards to settle debts of agriculturists. The question is how far a civil Court in Bombay can entertain a suit to recover a debt which has been duly declared to be discharged by the Debt Conciliation Board of the Central Provinces. The debt was incurred under a promissory note made on April 9, 1933, by the defendant in favour of the plaintiff. The note was made at Nandurbar, which is within this Province, and it is admitted that there is nothing in, the terms of the promissory note which determines the law of the contract; therefore, under the ordinary rule, the law of the contract is the law of the place where the contract was made.

2. The Central Provinces Debt Conciliation Act was passed in the year 1933 and extends to the whole of the Central Provinces. A 'debtor' is defined as a person who earns his livelihood mainly by agriculture and who falls within one of the descriptions of occupancy therein contained, most of which are not forms of occupancy known in this Province. Section 4 of the Act provides that a debtor or any of his creditors may apply to the Board appointed, for the area in which any holding, land or village of the debtor, or any part thereof, is situate, to effect a settlement between the debtor and his creditors. Admittedly the defendant owns some land in the Central Provinces, and he made an application to the proper Board to effect a settlement between him and his creditors. Under Section 8 it is provided that if the Board thinks it desirable to attempt to effect a settlement between a debtor and his creditors, a notice shall be issued to the creditors requiring them to submit a statement of debts owed to them by the debtor, and then Sub-section (2) provides that every debt of which a statement is not submitted to the Board in compliance with the provisions of Sub-section (1) shall be deemed for all purposes and all occasions to have been duly discharged. Section 16 provides that no civil Court shall entertain any suit in respect of the recovery of any debt which has been deemed to have been duly discharged under Sub-section (2) of Section 8.

3. It is admitted that the plaintiff was served with a notice of the proceedings under Section 8 requiring him to submit a statement of his debt, and he omitted to do so, and, therefore, under the Act his debt was deemed to be discharged, and we are told that the Board made a declaration to that effect. The question, which arises, is whether that discharge of the debt under the Central Provinces Debt Conciliation Act is an answer to this suit which was filed by the plaintiff in the Nandurbar Court to recove payment of the amount due on the promissory note.

4. Where questions arise as to whether the incidents of a contract should be governed by the law of one country or of another, the general rule is that all the rights and incidents arising under the contract are governed by the proper law of the contract, and in this case the law of the contract is the law of the place where the contract was made. One of the incidents which is governed by the law of the contract is the method of discharge of the contract. If under the proper law of the contract, such contract can be discharged by some method other than performance, such a discharge Will be recognised in British India. The principle is stated in Dicey's ' Conflict of Laws ', 5th edn., Rule 126, p. 503:

A discharge from any debt or liability under the bankruptcy law of the country where the debt or liability is to be paid or satisfied is a discharge therefrom in England.

5. Bankruptcy is, of course, one method by which a debt may be discharged other than by performance, but the same principle applies to any other special method of discharge. No doubt, the Province of Bombay and the Central Provinces are both part of British India, but, in my opinion, where the law of one province of British India is distinct from the law of another province, the two provinces must be regarded for the purposes of this rule as foreign countries inter se. In my view the proper law of this contract is the law in force in the Province of Bombay, and the contract cannot be discharged by a method recognised in the Central Provinces, but not in Bombay. I think that the view of the learned Disctrict Judge was right, and a discharge of this debt under the Central Provinces Debt Conciliation Act is no defence to the suit filed in the Nandurbar Court.

6. The application will be rejected with costs.

Wassoodew, J.

7. I agree.


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