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Akbaralli Abedalli Bohari Vs. Godha Lahanu Dhangar - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 712 of 1954
Judge
Reported inAIR1957Bom105; (1956)58BOMLR335; ILR1956Bom433
ActsDebt Laws; Dekkhan Act, 1944; Bombay Agricultural Debtors Relief Act, 1947 - Sections 2(1), 8(4), 9, 17, 24, 32, 33, 43, 43(1), 47, 47(1), 47(1A), 47(2) and 51; Code of Civil Procedure (CPC), 1908 - Sections 60 and 97; Provincial Insolvency Act - Sections 27
AppellantAkbaralli Abedalli Bohari
RespondentGodha Lahanu Dhangar
Appellant AdvocateG.R. Madbhavi, Adv.
Respondent AdvocateR.B. Kotwal, Adv.
Excerpt:
.....the court declared that the properties of the debtor were free from all encumbrances. the creditor preferred an appeal against this order. on the question of the competency of the appeal:--;that the appeal was incompetent as the order against which it was preferred was not an award within the meaning of section 43 of the act.; - - on his failure to comply with this order, the vendee was held entitled to obtain possession of the land. the vendor failed to comply with the directions issued by the compromise decree and the vendee filed an execution application and claimed possession of the property conveyed. as a result of this finding, the adjustment court held an enquiry into the paying capacity of the debtor and on the 8th of april, 1952, the adjustment court was satisfied that the..........hold that the only reason given by the learned district judge in coming to the conclusion that the appeal preferred before him was incompetent is unsound. 4. that, however, is not an end of the matter. mr. kotwal contends that the appeal preferred by the petitioner in the district court was incompetent for the simple reason that the final order against which the appeal has been preferred is not an award within the meaning of section 43 of the bombay agricultural debtors' relief act. section 43 provides for appeals. section 43 (1) (vi) deals with appeals against awards. the effect of section 43 (1) (vi) is that an appeal lies against every award except in the cases of awards which are specifically mentioned in the said sub-clause. it is common ground that the present order does notfall.....
Judgment:
ORDER

1. This revisional application raises a short question as to whether the appeal preferred by the petitioner before the lower appellate Court was competent. The lower appellate Court has held that the appeal was incompetent and Mr. Madbhavi for the petitioner disputes the correctness of this finding.

2. The point arises in this way. On the 5th of February, 1939, a sale-deed was executed in favour of the petitioner for Rs. 2,000. The property conveyed was Survey No. 12. In 1944 the vendor brought a suit No. 1 of 1944 under the Dekkhan Act. Ho claimed a decree for accounts and redemption. This suit was compromised. Under the terms of compromise the vendor was under an obligation to pay specific amounts within the period specified by the compromise decree. On his failure to comply with this order, the vendee was held entitled to obtain possession of the land. The vendor failed to comply with the directions issued by the compromise decree and the vendee filed an execution application and claimed possession of the property conveyed. These proceedings were transferred to the Bombay Agricultural Debtors Relief Act Court because the vendor again raised the question that he was a debtor inasmuch as the transaction in question was not a sale but a mortgage. In these proceedings the learned trial Judge found on the 22nd of February, 1952, that the transaction was in reality a mortgage. This finding was preceded by a preliminary finding as to status in favour of the debtor. As a result of this finding, the adjustment Court held an enquiry into the paying capacity of the debtor and on the 8th of April, 1952, the adjustment Court was satisfied that the debtor was an insolvent. Accordingly an order was passed declaring the debtor insolvent. The adjustment Court also held that the properties of which the debtor was possessed were not enough to maintain him and so it was not possible to direct the sale of any portion of his properties under Section 47 (2). In the result, it was declared that the properties were free from all encumbrances. It was against this last order that the creditor preferred an appeal and he was met by the plea that the appeal was incompetent. On the merits the learned appellate Judge has found that, if he had to deal with the evidence, he would have come to the conclusion that the transaction was a sale and not a mortgage.

3. Mr. Madbhavi contends that the view taken by the lower appellate Court on the question of the competence of the appeal is not justified by the provisions of Section 43 of the Bombay Agricultural Debtors' Relief Act. The lower appellate Court has based its conclusion on the ground that the creditor did not make an appeal against the finding that the transaction was a mortgage which had been recorded on the 8th of April, 1952. There is no doubt that against the order passed by the learned trial Judge determining the nature of the transaction under Section 24 an appeal was competent. But the lower appellate Court was in error in assuming that the failure to make an appeal against the said order created a bar against the petitioner disputing the correctness of the said finding in his final appeal against the award. I may point out that the lower appellate Court has dealt with this question on the assumption that the final order passed by the learned trial Judge was an award. He, however, held that an appeal against the award was incompetent because the award was preceded by an order which was appealable and no appeal had been preferred against that order. In substance, the view taken by the lower appellate Court proceeds on considerations which flow from the provisions of Section 97 of the Code of Civil Procedure. Section 97 of the Code provides that, if an appeal has not been preferred against a preliminary decree, the party aggrieved by the preliminary decree shall be precluded from disputing the correctness of the preliminary decree in any appeal that he may make against the final decree. The learned District Judge thought that, since the petitioner had not challenged tile correctness of the finding that the transaction was a mortgage by preferring an appeal against the said order, as he should have done under Section 43 of the Bombay Agricultural Debtors' Relief Act, lie was precluded from agitating that matter in his present appeal against the award. This view overlooks the fact that the Bombay Agricultural Debtors' Relief Act makes no provision corresponding to the provisions contained in Section 97 of the Code, and so far as this Court is concerned, it may be taken to be fairly well settled that the failure of a party to make an appeal against an order passed under Section 24 of the Bombay Agricultural Debtors' Relief Act, like his failure to appeal against an order passed under Section 17 does not preclude him from challenging the correctness of such finding in an appeal against the award. I must, therefore, hold that the only reason given by the learned District Judge in coming to the conclusion that the appeal preferred before him was incompetent is unsound.

4. That, however, is not an end of the matter. Mr. Kotwal contends that the appeal preferred by the petitioner in the District Court was incompetent for the simple reason that the final order against which the appeal has been preferred is not an award within the meaning of Section 43 of the Bombay Agricultural Debtors' Relief Act. Section 43 provides for appeals. Section 43 (1) (vi) deals with appeals against awards. The effect of Section 43 (1) (vi) is that an appeal lies against every award except in the cases of awards which are specifically mentioned in the said sub-clause. It is common ground that the present order does notfall under any one of the exceptional cases. Butbefore Section 43 (1) (vi) can be invoked by the petitioner, he must first satisfy the Court that the order under, appeal is an award, and for determining the character of the order under appeal it is essential to consider the definition of the word 'award' given by the Act. Section 2 (1) defines an 'award' as meaning an award made under Sub-section (4) of Section 8 or Section 9, 32 or 33 or as confirmed or modified by the Court in appeal. It is common ground that the order which was under appeal before the learned District Judge does not satisfy the definition given in Section 2 (1) and so the appeal preferred against the said order cannot be entertained as an appeal against an award. An examination of the provisions contained in Ch. III of the Bombay Agricultural Debtors' Relief Act read with Section 43 (1) (vii) of the Act fortifies this conclusion. Ch. III deals with insolvency proceedings. Section 47 under this Chapter enables the Court to declare a debtor an insolvent in certain circumstances. Sub-s. (2) of Section 47 provides that, after the debtor has been adjudicated an insolvent the Court shall direct that such portion of the property of the debtor, liable to attachment and sale under Section 60 of the Code of Civil Procedure, excluding such portion thereof as the State Government shall from time to time notify in the Official Gazette as the minimum necessary for the maintenance of the debtor and his dependants, as may be required to liquidate all the debts of the debtors, shall immediately be sold free of all incum-brances in liquidation of all debts outstanding against such debtor. After a debtor is declared insolvent, it is open to the adjustment Court to come to the conclusion on facts that the debtor is unable to meet any of his liabilities and that on examining his assets and the income receivable by the debtor from those assets it is impossible to set apart any portion of his property for sale as contemplated by Section 47 (2). That is what has happened in this case. The Court found that the resources of the debtor were so meagre that it was impossible to direct that any portion of the said resources could be sold for the satisfaction of the debts due from him. In some cases it may be possible for the Court to come to the conclusion that a part of the resources of the debtor can be sold free of incumbrances in liquidation of all debts outstanding against such debtor. But even where an order of this kind is passed under Section 47 (2), Section 48 has provided that the order passed shall have the force of an order made by a competent Court in the exercise of its powers under Section 27 of the Provincial Insolvency Act, and that it shall he executed as such. This position can be contrasted with the provisions contained in Section 38 which deal with the execution' of awards. That incidentally shows that between the orders passed under Section 47 (2) and awards properly so called a distinction has been made by Legislature. Then we have Section 51 which provides that save as provided by Sub-clause (vii) of Clause(1) of Section 43, no appeal shall lie from any order passed under Ch. III. In other words, the right to make an appeal against orders passed under Ch. III is a very limited right and the limitations are imposed by Section 43 (I) (vii) which provides for an appeal against an order made under Sub-section (1) or (1A) of Section 47, provided that no appeal shall lie from such order except on the ground that the insolvent has failed to disclose all the material facts relating to his assets and liabilities. This would show that proceedings taken under Ch. III aretreated as falling under a different category altogether^ The right of appeal is given only against specified orders and that too subject to the limitations which I have just indicated. These proceedings do not terminate in the making of an award and this is clear from the definition of the word 'award' itself. Therefore, in my opinion, the view taken by the learned District Judge must be confirmed, not on the ground set out by him in his judgment, but on the ground that the appeal preferred by the petitioner before him had not been preferred against an award: it had been preferred against an order which was not an award and no-appeal-would lie against that order.

5. In the result, the order passed by the learned District Judge must be confirmed and the rule in the revisional application discharged. There will be no order as to costs.

6. Rule discharged.


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