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Keshav Ganashyam Vs. Waman Rangaji - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 1333 of 1951
Judge
Reported inAIR1953Bom340; (1953)55BOMLR320; ILR1953Bom831
ActsDebt Law; ;Bombay Agricultural Debtors Relief Act, 1947 - Sections 13, 14, 14(1), 15 and 17; Evidence Act, 1872 - Sections 41; Code of Civil Procedure (CPC), 1908
AppellantKeshav Ganashyam
RespondentWaman Rangaji
Appellant AdvocateT.N. Walawalkar, Adv.
Respondent AdvocateR.G. Samant, Adv.
Excerpt:
.....in section 14(a).;the expression 'all creditors' used in section 14 of the bombay agricultural debtors relief act, 1947, is not limited to the class of creditors referred to in sub-clause (a) of the section, but refers to all the creditors of the debtor. therefore, an award made under the act is not only an award between the debtor and such of the creditors as are mentioned in the application, made under section 4 of the act or upon whom notice has been served under section 14(a) of the act, but it is also an award between the debtor and all his creditors, and the latter are bound by it.;the legislature has provided for notice to be given to all the creditors and an opportunity is given to all the creditors to come forward and prove their debts. if a creditor fails to do so, the..........and the learned judge held that the debt was extinguished under section 15, bombay agricultural debtors relief act and non-suited the plaintiff; and the point that has been urged before me by mr. walawalkar on behalf of the plaintiff is that the learned judge was in error in preventing the plaintiff from contending that the defendant was not a debtor within the meaning of the bombay agricultural debtors relief act and therefore the provisions of section 15 would not apply.(2) in this case an application for adjustment of debt was made by a creditor under section 4, and on that application the court held that the defendant was a debtor and passed an award adjusting the debts of the defendant. the defen-dant's contention before the learned small causes court judge was that inasmuch as.....
Judgment:

Chagla, C.J.

A very interesting and important question under the Bombay Agricultural Debtors Relief Act arises 011 this revision application. The petitioner filed a suit in the Court of small Causes, Sawantwadi, to recover a debt, and the learned Judge held that the debt was extinguished under Section 15, Bombay Agricultural Debtors Relief Act and non-suited the plaintiff; and the point that has been urged before me by Mr. Walawalkar on behalf of the plaintiff is that the learned Judge was in error in preventing the plaintiff from contending that the defendant was not a debtor within the meaning of the Bombay Agricultural Debtors Relief Act and therefore the provisions of Section 15 would not apply.

(2) In this case an application for adjustment of debt was made by a creditor under Section 4, and on that application the Court held that the defendant was a debtor and passed an award adjusting the debts of the defendant. The defen-dant's contention before the learned Small Causes Court Judge was that inasmuch as an award has been made in his favour by the Bombay Agricultural Debtors Relief Act Court and inasmuch as the debt of the plaintiff was not included in that award, the debt is extinguished under Section 15. Mr. Walawalkar's contention is that the award made by the Bombay Agricultural Debtors Relief Act Court was not binding on him as he was not a party to that award, and therefore the adjudication before the Bombay Agricultural Debtors Relief Act Court that the defendant was a debtor was an adjudication which was not binding and conclu-sive as against him and it was open to him to challenge that finding and to ask the Court before applying Section 15 to be satisfied that the defendant was a debtor. Under Section 15, debts mentioned in that section are to be extinguished and one of the debts which is mentioned is a debt in respect of which a statement is not submitted to the Court by the creditor in compliance with the provisions of Section 14, and turning to Section 14 it provides for service of notices on debtors and creditors. Under Sub-section (1), when an application for adjustment of debts is received by a Court, a notice is to be served upon the debtor, unless the debtor is himself an applicant, and upon every creditor, other than the creditor who himself makes an application, whose names and addresses are given in the application., and Sub-clause (b) deals with a general notice, which notice is to be given to the debtor and all creditors to submit a statement in the prescribed form within one month of the date of the service of the notice or publication of the general notice, whichever is later. Mr. Walawalkar's contention is that the general notice is to be given only to those creditors whose names and addresses are given in the application. It is not possible to put that interpretation upon the expression 'all creditors' used in Sub-clause (b), because if the intention of the Legislature was that general notice should be given only to those creditors referred to in Sub-clause (a), then the language used by the Legislature would not have been 'all creditors', but either 'such creditors' or 'the creditors'. But the very fact that the Legislature has used the general expression 'all creditors', & has not specified or limited the class of creditors to the class referred to in Sub-clause (a), makes it clear that the intention was to give a general notice for giving intimation to all creditors of the debtor. Mr. Walawalkar says that even if a general notice is given to all creditors, unless a creditor responds to that notice and files a statement and appears on the application for adjustment of debts, the ultimate award that is passed is an award between the parties to the application and a creditor who is not a party to that application or who has not answered the notice cannot be bound by that award. Mr. Walawalkar says that an award under the Bombay Agricultural Debtors Relief Act is not a judgment 'in rem' within the meaning of Section 41, Evidence Act and therefore it does not bind the whole world, but only binds the parties to that award. Mr. Walawalkar says that unless this view is taken of the law, it will cause great hardship to creditors who may not be aware of the general notice given under Sub-clause (b) and who may not file a statement as required by that sub-section. Mr. Walawalkar further says that he should be given an opportunity to litigate the question as to whether the debtor is a debtor within the meaning of the Bombay Agricultural Debtors Relief Act, otherwise the result would be that his debt would be extinguished without his being given an opportunity to contest that issue. I admit that there is considerable force in Mr. Walawalkar's argument, but in order to decide this question I have got to look at the scheme of the Bombay Agricultural Debtors Relief Act as a whole.

(3) It is perfectly clear that the whole object of putting this Act on the statute book was to give relief to agricultural debtors and relief was to be given in the manner provided in the Act. All the debts of the debtor were to be adjusted. Not only some debts, not only debts of those creditors who had applied or whose names had been given by the debtor, but in order to work the machinery set up under the Bombay Agricultural Debtors Relief Act it was absolutely necessary that all the creditors should be before the special Court and all the debts of the debtor should be adjusted. This is clear from the fact that before the Court proceeded to adjust the debts it had to try certain preliminary issues under Section 17, and one of the preliminary issues was whether the total amount of debts due from such person on the date of the application exceeded Rs. 15,000, It would not be possible for the Court to decide this issue unless it knew who all the creditors of the debtor were and what was the amount of the debts. Further, Section 13 provided for consolidation of all applications made against the same debtor. Again, the object was that all the debts of the debtor should be adjusted. Then when we look further into the machinery provided by the Act, it provides for scaling down of debts, it provides for determining the paying capacity of the debtor, and it ultimately provides that unless the debts of the debtor are capable of being paid in 12 annual instalments he must be adjudicated insolvent, and it further provides that no application or proceeding in regard to insolvency of a debtor shall lie in, or shall be dealt with by, any other Court. Therefore, the whole purpose, the whole object of the Act was to relieve an agricultural debtor of all his debts, to make provision for the manner in which he should discharge those debts, and if he was not in a position to discharge those debts, to adjudicate him insolvent and give him relief by giving him the protection of insolvency.

(4) If Mr. Walawalkar's contention were to be accepted, it would lead to considerable difficulties which are almost insurmountable in working this Act. In the first place, according to Mr. Walawalkar it would be open to a civil Court to come to a conclusion as to the status of the application contrary to the decision arrived at by the special Court. Further, it would be open to a civil Court to hold that the debtor was liable to pay a debt over and above the debt mentioned in the award, and further difficulties would also arise if the debtor was adjudicated insolvent. The creditor would not be bound possibly by the order of the special Court which proceeded on the basis that the person who was adjudicated insolvent was a debtor, and even if the creditor was bound by the order of adjudication, even so the special Act does not make any provision for the debt of a creditor who had not filed his statement with regard to it under Section 14, and it is difficult to understand what the effect of the insolvency would be upon the debt of such a creditor. Therefore, Mr. Walawalkar is not right when he says that the award made under the Bombay Agricultural Debtors Relief Act is an award between the debtor and such of the creditors as have been mentioned in the application or upon whom notice has been served under Section 14 (a). The award is between the debtor and all his creditors, and it is for that reason that the award is binding upon all the creditors and not because it is a judgment 'in rem' within the meaning of Section 41, Evidence Act. The Legislature has provided for notice to be given to all the creditors and an opportunity is given to all the creditors to conic forward and prove their debts. If a creditor fails to do so, the award may be 'ex parte' against him, but all the same it is binding upon him. It may be that in a particular case the creditor may not come to know of the general notice and that may result in a hardship, but it would be unsafe to base a legal argument upon an individual hardship which might take place in certain cases. As against this individual hardship we have got to consider the object of the Legislature in passing the law, the scope and ambit of that statute and the fact that special Courts were set up for a special purpose. If Mr. Walawalkar's Interpretation were to be given effect, then it would seriously impair the machinery set up under the Act and would also seriously interfere with the object the Legislature had in mind in giving relief to agricultural debtors. Therefore, I refuse to be swayed by the argument strongly urged upon me by Mr. Walawalkar that a creditor may be bound by an award although he in that particular case did not have an opportunity of contesting the issues which were determined by that award.

(5) In my opinion, therefore, the learned Judge below was right in the view that he took. The result is that the revision application fails. Rule discharged with costs.

(6) Rule discharged.


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