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Somabhai Shanabai Patel Vs. Narandas Zaverdas - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 402 of 1947
Judge
Reported inAIR1949Bom308; (1949)51BOMLR461
AppellantSomabhai Shanabai Patel
RespondentNarandas Zaverdas
Excerpt:
bombay agricultural debtors' relief act (bom. xxviii of 1947), sections 4, 19-debtor's application to transfer suit to court set up under act-application under section 4 not made in time-suit filed by creditor after expiry of time within which such application to be made-whether suit a pending suit within section 19(1)-transferability of suit.;under section 19(1) of the bombay agricultural debtors' relief act, 1947, only such suits, appeals, applications for execution and proceedings can be transferred which were pending at the date when an application under section 4 could be made to the special court set up under the act. - - if such an application was made, it would be clearly barred. if such an application had been made, it would be clearly barred and could not have been dealt with..........for the same purpose was on the statute book and that act was act xxviii of 1939. under that act debt adjustment boards were also set up for the purpose of adjusting the debt of the agricultural debtors. the defendant is a resident of thasara taluka and the board for that taluka was established on april 1, 1945. the scheme of the act is that applications for the adjustment of the debt can be made either by the debtor or by the creditor. but such an application has to be made within the time fixed by section 4 of the act and that time is that the application has got to be made before august 1, 1947, if a board was established under the old act on or after february 1, 1947. if the board was established before that date, then no application can be made under this section. if such an.....
Judgment:

M.C. Chagla, C.J.

1. This is a civil revisional application from an order made by the Civil Judge (Senior Division) Nadiad. The applicant made an application that a suit which was pending before the learned Judge should be transferred to the Court set up by the Bombay Agricultural Debtors' Relief Act, 1947, under Section 19 of that Act and that application was rejected by the learned Judge.

2. The facts may be briefly stated. The opponent filed a suit in the Court of the Civil Judge (Senior Division) Nadiad, on July 24, 1946, claiming from the petitioner Rs. 29,999 as a debt due at the foot of accounts subsisting between him and the petitioner. This debt was alleged to have been incurred between the dates January 20, 1945, and December 15, 1945. On July 9, 1947, the petitioner made an application to the Court for transfer of his suit to the Court under the Bombay Agricultural Debtors' Relief Act, and. the question that has been argued before us by Mr. Patel is that the learned Judge was wrong in refusing the application, that the learned Judge had no jurisdiction to proceed with the suit, and the proper Court which was competent to try the matter was the Court set up by the Bombay Agricultural Debtors' Relief Act.

3. In order to appreciate the argument it is necessary to look at the scheme of the Act XXVIII of 1947. The Act is intended for the relief of agricultural debtors and the scheme is that Special Courts are set up for the adjustment of debts of these debtors. Relief is not intended to be granted to all debtors but only to debtors whose debt does not exceed the sum of Rs. 15,000. Before Act XXVIII of 1947 was passed, another Act which dealt with the same subject matter and which was intended for the same purpose was on the statute book and that Act was Act XXVIII of 1939. Under that Act Debt Adjustment Boards were also set up for the purpose of adjusting the debt of the agricultural debtors. The defendant is a resident of Thasara taluka and the Board for that taluka was established on April 1, 1945. The scheme of the Act is that applications for the adjustment of the debt can be made either by the debtor or by the creditor. But such an application has to be made within the time fixed by Section 4 of the Act and that time is that the application has got to be made before August 1, 1947, if a Board was established under the old Act on or after February 1, 1947. If the Board was established before that date, then no application can be made under this section. If such an application was made, it would be clearly barred. In this case a Board was established for the Thasara taluka under the old Act on April 1, 1945, and the last date for making the application to that Board was October 31. 1945, and therefore, as I read Section 4, it would not be open either to the debtor or to any creditor to make any application with regard to the adjustment of debts under Section 4 of this Act. Section 11 provides that no application under Section 4 or Section 8, which deals with settlement of debts arrived at between debtors and creditors, shall be entertained by the Court on behalf of or in respect of any debtor, unless the total amount of debts due from him on the date of the application is not more than Rs. 15,000. Section 15 makes all debts void in respect of which no application for adjustment or settlement is made. Section 17 provides for the decision by the Court under the Act of two preliminary issues: one is whether the person for the adjustment of whose debts the application has been made is a debtor and the second is whether the total amount of debt due from such person on the date of the application exceeds Rs. 15,000, and if that Court finds either that such a person is not a debtor or that the amount of debts is more than Rs. 15,000, then the Court must dismiss the application. Then we come to Section 19 which calls for an interpretation at our hands. That section deals with pending suits, appeals and applications, and it provides that all suits, appeals, applications for execution and proceedings other than revisional in respect of any debt pending in any civil Court or revenue Court shall, if they involve the questions whether the person from whom such debt is due is a debtor and whether the total amount of debts due from him on the date of the application exceeds Rs. 15,000, be transferred to the Court. The section is by no means very happily worded, but we have to take legislation as we find it and give to it such effect as we possibly can.

4. It is contended by Mr. Patel that as he has raised the question in the suit that he is a debtor and that his debt does not exceed Rs. 15,000, the suit under this section must be transferred to the proper Court. It is important to note that when the suit was filed, viz. July 24, 1946, it was not open to the debtor or to any creditor to file any application with regard to the adjustment of debts or settlement of debts. The last date for doing so had already expired on October 31, 1945. Therefore, the submission that is made to us and which we are asked to accept is that although the time for making the application for adjustment or settlement of debts had already expired when the suit was filed, still that suit being a pending suit within the meaning of Section 19 should be transferred to the Court set up under the Act. If we were to accede to this contention, a very curious and to my mind a very illogical result would ensue. Indisputably, if no suit had been filed by the creditor, neither the debtor nor he nor any other creditor could have made an application for the adjustment of debts under Section 4 of the Act. If such an application had been made, it would be clearly barred and could not have been dealt with by the Court set up under the Act. According to Mr. Patel, merely because a suit is filed, the pendency of that suit gives a higher and a better right to the debtor than would have been enjoyed by him if no such suit had been filed. That to my mind is an entirely untenable contention and a contention which does not fit in with the general scheme of the Act. Under the Act applications were only permitted up to a certain date and the Act lays down the consequences of not making those applications, and those consequences are, that the debts become void. It is also the scheme of the Act that where there are questions which can be decided by the Courts set up under the Act, the ordinary civil Courts should not decide those questions and therefore pending suits should be transferred and the Special Courts should be left to decide those questions. But it could not possibly have been intended and it is not intended, as far as I can see, that suits should be transferred although the questions raised by those suits can no longer be dealt with or disposed of by the Special Courts set up under the Act. The object of transferring the suit is to permit some other Special Court to try it and dispose of it. But if that other Court cannot deal with the suit because of the limitation laid down in the Act itself, then it cannot be said that the Legislature intended the suits to be transferred from the ordinary civil Courts to the Special Courts set up under the Act.

5. Section 19(2) contains a provision that where an application made is under Section 4 or a statement submitted pursuant to that application under Section 14 includes a debt in respect of which a suit is pending, then the Court shall issue a notice to the civil Court, and on the receipt of such notice the pending suit is to be transferred. Here again the assumption is that the application made to the Court under Section 4 was an application which was within time. No Court can issue a notice under Sub-section (2) unless the application made was an application which was not barred by limitation under Section 4. Sub-section (3) provides that when a transfer has taken place either under Sub-section (1) or Sub-section (2) of Section 19, the Special Court shall proceed as if an application under Section 4 had been made to it. Here again the Court is empowered when the transfer has been made to proceed on the footing and on the basis as if an application has been made under Section 4 of the Act. But the Court could not deal with these transferred suits or appeals or applications unless it was competent, unless the application if made to it under Section 4 had been within time.

6. Therefore, in my opinion, under Section 19(1) only such suits, appeals, applications for execution and proceedings can be transferred which were pending at the date when an application under Section 4 could be made to the Special Court set up under the Act. As this suit was filed on July 24, 1946 when the last date for an application under the old Act was October 31, 1945, and when in fact Section 4 would not apply to this suit at all because no application could be made under that section, in my opinion the learned Judge was right in the view he took and rightly dismissed the petitioner's application. The revision application therefore fails and the rule must be discharged with costs.

Bavdekar, J.

7. The question is to what cases Section 19(1) of the new Act has application, and in so far1 as the present Act is based to a very large extent upon the old Act, it would not be out of place to refer to the corresponding provisions of the old Act. Corresponding to Section 19(2) there was in the old Act Section 37(2) which permitted the Board to give notice when application for adjustment had been made to it and it came to its notice that there was a suit pending in a civil Court about a debt mentioned by the debtor or creditor in the application for adjustment or by a creditor in a statement made by him in answer to a notice issued by the Board, Upon receipt of such notice, the Court was bound to transfer the suit to the Board. Just as in the case of the present Act, the old Act provided that applications for adjustment both by the creditors and the debtors should, be made before a particular date, and in case any such application was not made, then all debts would be extinguished in accordance with the provisions of Section 32 of the old Act, and I think that Section 37(1) was intended to apply to suits, applications for execution and proceedings which were pending in a Court before the time prescribed for making an application whether by a debtor or a creditor had expired. Under Section 37(2) of the old Act the Board could not give notice to the Court when no application had been made to it. It was then for the creditor or the debtor in the suit which was pending to move the Court saying that the application should be transferred on the ground that the debtor was a debtor under the Act and there was an issue between him and the creditor that his debts were less than Rs. 15,000. I have no doubt that if the creditor did not come forward to make such an application to the Court, the debtor would come forward to do so, and the proceedings would be transferred and the Board would proceed as if on an application for adjustment having been made with the result that the debtor would not have had to make an application for adjustment in a hurry or to allow the civil Court to proceed to judgment and perhaps to execution without adjustment of the suit debt.

8. It is no doubt true that the words of both Section 37(1) and Section 19(1) are general and that has made it possible for Mr. Patel to argue that if a suit or appeal or application is pending at any time before a Court and an application is made to the Court by a debtor saying that the total amount of debts due by him does not exceed Rs. 15,000, the Court must send the suit to the Court under the present Act. He says similarly the Court had to send the proceedings of the suit to the Board under the old Act upon receiving the prescribed notice. But if Sub-section (1) of Section 37 of the old Act or Section 19 of the new Act are to be construed in this manner, Sub-section (2) in both eases would be superfluous. Mr. Patel says that it was enacted to provide for recalcitrant cases. Now, one can understand that a creditor' may not want to move the Court for a transfer to the Board or Court constituted under the present Act but the debtor would always want to do so and in any case the Court or Board would ordinarily come to know of a suit when one of the parties informed it of its existence.

9. There is, however, another reason why the operation of Sub-section (1) should be limited to the period before the date when the last date for making applications for adjustment had not expired. Under the provisions of the third clause of both the sections of the old and the new Acts, where the suit or application for execution or proceeding is transferred to a Court, the Court must proceed as if upon an application for adjustment of the debts had been made to it. When an application for adjustment of debts is made to the Court, it must give notice to the creditors and the creditors have got to file statements before it of debts which are due to them. If a suit or appeal or application for execution is transferred to a Court after the time prescribed for making an application for adjustment of debts is passed, the creditors would be entitled to file an application of the debts due to them. Mr. Patel says that even if they did file such application, their debts would have been extinguished in case they had not made any application by the last date provided for such applications. I am not so sure that that result would follow because under Section 32 of the old Act every debt due from a debtor who ordinarily resides within the local area for which a Board is established under Section 4 or who belongs to a class of debtors for which a Board is established under the said section, in respect of which no application has been made under Section 17 within the period specified in Sub-section (2) of the said Section 17, or in respect of which no application for recording a settlement is made under Section 23 within the period specified in the said Section 23 or in respect of which an application is made to the Board is withdrawn under Section 27 and no fresh application is made under Section 17, and every debt due from such debtor in respect of which a statement is not submitted to the Board by the creditor in compliance with the provisions of Section 31 shall be deemed to have been duly discharged. There is a corresponding provision in the present Act. It is arguable of course that even though the words underlined occur in Section 32 and corresponding words occur in the corresponding section of the present Act, if a creditor has not made an application within time the debt will be extinguished notwithstanding the fact that the creditor mentions the debt in a statement which is submitted to the Board under the provisions of Section 31 of the old Act and the corresponding provision of the present Act. But that is by no means clear. Secondly, there is the question of the debt to which the pending suit or proceeding relates. If Section 32(1) of the old Act is not to be read subject to Section 37 and Section 15 of the new Act is not to be read subject to Section 19, that debt will be extinguished or void. What then is the use of transferring the suit to the Board or Court? It could hardly be as Mr. Patel says in order to enable the Board or Court constituted under the new Act to pronounce it to be extinguished or void. In my opinion the only way of avoiding the superfluity and difficulty pointed out above is to read the first sub-section of Section 37 of the old Act and Section 19 of the new Act as intended to apply at a time when the time for making an application for adjustment of debts to the Court, whether by a creditor or a debtor has still not expired. Nobody is likely to be prejudiced in case that meaning is ascribed to Section 37(1) except a creditor who has not made an application for adjustment in time, but I think there was enough notice to creditor both in the old as well as the new Act that if he refrained from making an application in time he did so at his peril.

10. It may be that when an application for adjustment of debts is made to a Court, the debtor may be entitled to have an adjustment not only of his debts at the time whether application was made but also of debts which he may have incurred after the date prescribed for making an application for adjustment had passed. But that will not matter, because in case the debtor has incurred such a debt and the creditor has filed his suit in respect of it, it is open to the debtor who had made an application for adjustment to move the Court, proper steps being taken under Section 19(2). I, therefore, agree with the order which has been proposed by my learned brother.


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