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Girdharlal B. Bhatia Vs. Mangharam Jeewandas - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 15 of 1955 and Suit No. 1006 of 1950
Judge
Reported in(1956)58BOMLR267
AppellantGirdharlal B. Bhatia
RespondentMangharam Jeewandas
DispositionAppeal dismissed
Excerpt:
displaced persons (debts adjustment) act (lxx of 1951), sections 3, 9, 5, 22-indian partnership act (ix of 1932), section 25-suit by plaintiff on promissory notes against two partners constituting firm-suit against one partner, a displaced person, stayed on hit making application to tribunal set up under act lxx of 1951, for adjustment of his debts-whether plaintiff entitled to recover entire debt from remaining non-displaced partner.;a suit on promissory notes, filed by the plaintiff against two partners who constituted a firm, was stayed against one of the partners, who was a displaced person, as he had applied to the tribunal set up under the displaced persons (debts adjustment) act, 1951, for adjustment of his debts. the suit was continued against the remaining partner who was a..........person, he raised a contention that even with regard to him the suit should be stayed till the debt adjustment tribunal had disposed of the application made by defendant no. 2. that contention was rejected by the learned judge mr. justice desai and he passed a decree in favour of the plaintiff, and defendant no. 1 has come in appeal.3. it is not disputed that under general law the liability of defendants nos. 1 and 2 is joint and several and that the plaintiff! could have enforced his liability either against defendant no. 1 or defendant no. 2 or against both. but what is urged is that by reason of the provisions of the displaced persons (debts adjustment) act (act lxx of 1951) this principle of general law has been abrogated, and attention is drawn to section 3 which is an.....
Judgment:

M.C. Chagla, C.J.

1. A rather interesting question arises in this appeal as to the liability of a non-displaced person with regard to a debt for which he is liable jointly and severally with a displaced person.

2. The two defendants to the suit, from which this appeal arises, carried on business in the name and style of Hirdaram Bahrumal Bros, at Quetta and Sukkur and they passed ten promissory notes for Rs. 10,000 each in favour of various persons and those persons endorsed the promissory notes in favour of the plaintiff and the plaintiff filed a summary suit on these ten promissory notes. Defendant No. 2, who is a displaced person, applied to the Tribunal set up at Jodhpur for the adjustment of debts of displaced persons, for the adjustment of his debts, and the suit with regard to him was stayed in this Court. When the suit came on for hearing as against defendant No. 1, who as just pointed out is not a displaced person, he raised a contention that even with regard to him the suit should be stayed till the Debt Adjustment Tribunal had disposed of the application made by defendant No. 2. That contention was rejected by the learned Judge Mr. Justice Desai and he passed a decree in favour of the plaintiff, and defendant No. 1 has come in appeal.

3. It is not disputed that under general law the liability of defendants Nos. 1 and 2 is joint and several and that the plaintiff! could have enforced his liability either against defendant No. 1 or defendant No. 2 or against both. But what is urged is that by reason of the provisions of the Displaced Persons (Debts Adjustment) Act (Act LXX of 1951) this principle of general law has been abrogated, and attention is drawn to Section 3 which is an overriding section, and it provides:

Save as otherwise expressly provided in this Act, the provisions of this Act and of the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, or in any decree or order of a Court, or in any contract between the parties.

What is urged is that by reason of the provisions of this section, Section 25 of the Partnership Act, which provides that every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner, is abrogated. It is perfectly true that if we find anything in the provisions of the Displaced Persons (Debts Adjustment) Act which is inconsistent with any other law for the time being in force, to the extent of that inconsistency the provisions in the Displaced Persons (Debts Adjustment) Act must prevail. But our attention must be drawn to some inconsistency in the Displaced Persons (Debts Adjustment) Act and we asked Mr. Abhichandani to point out any provision in this Act which would lead us to the conclusion that the provisions of Section 25 of the Partnership Act have been abrogated, and that when there is a partner who is a displaced person the liability of the non-displaced partner is not joint and several. The answer given by Mr. Abhichandani is that looking to the scheme of the Act that position arises.

4. It is never very safe to talk generally and vaguely about the scheme of an Act. One must look to the specific provisions of the Act when one is being asked to abrogate a principle established under the ordinary law of the land, and even if one were to look at the scheme of the Displaced Persons (Debts Adjustment) Act, the scheme is clear from the preamble and the scheme and the objectof that the Act has been put on the statute book for the adjustment and settlement of debts due by displaced persons. It is an Act for the relief of displaced persons and not for the relief of non-displaced persons. It is an Act to absolve a displaced person from his liability either in whole or in part. It is not an Act to absolve a non-displaced person of any of his liability. Attention is drawn to Section 9 of the Act 'where it is provided that certain persons become respondents to this application, and it is said, and rightly said, that by reason of Section 5 where the displaced person has to set out in his application that debts due by him including joint debts, the joint debtor of the displaced person becomes a respondent to the application made by the displaced person for the adjustment of his debts, and Mr. Abhichandani is quite right when he contends that by reason of Section 5 and Section 9, defendant No. 1, his client, became a party respondent to the application made by defendant No. 2 for the adjustment of his debts. Then reliance is placed on Section 22 and that section deals with apportionment of joint debts and the scheme is that a displaced person is only liable to pay a portion of a joint debt which he owes himself with another person, and even after the apportionment has been made, according to the rules laid; down in Section 22 he is liable to pay not the whole of the apportioned debt but only such portion thereof as has been ultimately adjusted according to the provisions of the Act, Therefore, considerable relief is given to a displaced person when he is jointly and severally liable with a non-displaced person, and the relief is that the general law which makes him liable concurrently with his joint debtor is abrogated to the extent that his liability is reduced as just mentioned. But what we are concerned with is not the liability of the displaced person but the liability of the non-displaced person, and for that purpose Mr. Abhichandani relies oncl. (d) of Section 22 and that clause provides:

(d) if one joint debtor is a displaced person and another is not, the sum apportioned to the non-displaced person shall not be deemed to be a debt within the meaning of this Act and the creditor may in respect of such debt seek any remedy open to him in a civil court or otherwise.

Mr. Abhichandani wants us to read this provision to mean that when the apportionment takes place the right of the creditor to proceed against the non-displaced person who is a joint debtor is limited to the amount apportioned and coming to his share. If Mr. Abhichandani was right, it would indeed be a very startling conclusion to come to that the Displaced Persons (Debts Adjustment) Act should have absolved a non-displaced person from his liability in respect of a joint and several debt. But it is clear that the language of Clause (d) of Section 22 does not lead to any such conclusion. Section 22 having dealt with apportionment of a joint debt between a displaced person and a non-displaced person, had specifically to provide that to the extent that a certain sum is apportioned to a non-displaced person that sum shall not be looked upon as a debt within the meaning of the Act, in other words, that debt cannot be adjusted, and for caution's sake the Legislature went on to say that to the extent that the sum was apportioned to the non-displaced person the creditor's remedy against him remained unaffected. That does not mean that the creditor's remedy against the non-displaced person with regard to the sum apportioned to the displaced person was in any way affected by this provision and that the plaintiff in this case had not the right to recover the whole sum of Rs. 1,00,000 from defendant No. 1. Defendant No. 2 being a displaced person was given the right firstly to have this debt apportioned and to the extent of the apportionment and. the adjustment the plaintiff's right against defendant No. 2 was cut down. But to the extent that the plaintiff had the right to go against defendant No. 1 who is a non-displaced person and to recover the debt in full from him, that right was not only not affected by Section 22 but Section 22 does not even deal with that right.

5. It is strenuously urged by Mr. Abhichandani that if we took this view we would be seriously prejudicing the rights of the displaced person. It is our concern and indeed our duty, when a displaced person is before us, to see that the Act is construed in a manner which will be beneficial to him. But this strange solicitude on the part of a non-displaced person for the interest of a displaced person is rather suspicious. Mr. Abhichandani's client really vicariously wants the benefit from the misfortunes of defendant No. 2, and the argument put forward by Mr. Abhichandani is this that if a decree were to be passed in this Court against defendant No. 1 for the full amount, as indeed it has been passed, he would have a right of contribution against defendant No. 2, and inasmuch as that debt could not be adjusted, the displaced person would be prejudiced, and although his share was apportioned yet in a suit for contribution he may be liable to pay more than the share apportioned to him. We are not concerned in this appeal with the consequences that might ensue by reason of a decree being passed against a non-displaced person. We do not know what answer the displaced person may have if defendant No. 1, notwithstanding his sympathy for the displaced person, should choose to file a suit against him for contribution, and it would be idle to speculate as to whether the Displaced Persons (Debts Adjustment) Act has or has not provided for this particular case of hardship against a displaced person.

6. A point was also sought to be made by Mr. Abhichandani that the Tribunal under the Displaced Persons (Debts Adjustment) Act may come to the decision that no debt was due on these promissory notes and the Court here may come to a contrary conclusion. But there is nothing in the Displaced Persons (Debts Adjustment) Act which binds civil Courts in suits against non-displaced persons in respect of decisions given By the Tribunal in adjusting the debts of displaced persons. It is desirable to prevent inconsistency and conflicting decisions between two different Tribunals in the country, but if such an inconsistency is unavoidable, the Court must face it, but certainly should, not avoid an inconsistency at the cost of the vested rights of the creditor to enforce his debt against a non-displaced person.

7. In our opinion the learned Judge was right in the conclusion he came to. The result is that the appeal fails and must be dismissed with costs.

8. Liberty to the respondent's attorneys to withdraw the sum of Rs. 500 deposited in Court and appropriate the same in part satisfaction of the costs herein.


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