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Laxminarayan Fattelal Vs. Tulsiram Pandhari - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai High Court
Decided On
Case Number Second Appeal No. 834 of 1955
Judge
Reported in(1961)63BOMLR487
AppellantLaxminarayan Fattelal
RespondentTulsiram Pandhari
DispositionAppeal Allowed
Excerpt:
.....has failed to file a statement of claim before the date of hearing. - - provided that if the debt relief court is satisfied that for good and sufficient cause any creditor was unable to submit his claim it may extend the time upon such conditions as to costs as it may think fit and may revive the claim. the learned judge of the lower appellate court in affirming the finding of the trial court has held that the appellant had failed to comply with the provisions of section 8(1) of the belief of indebtedness act, and, therefore, it must be taken that the debt was duly discharged. it would be seen that the failure to comply with this provision, i. the question, therefore, that arises for decision is whether on receipt of such notice, which was served on the date from which the period..........tulsiram and vishwanath, sons of the original debtor pandhari, had filed an application in the debt relief court at khamgaon. this application was filed on december 6, 1941, and was registered as debt belief case no. 183 of 1941 (exh. d-3). the order of that date runs thus:an application under section 6(1) of the debt relief act is presented by mr. m. s, deshpande pleader for the applicant. it is properly drawn up and sufficiently stamped. it be registered. creditors joined. issue notices to the court concerned and the creditors. p. f. be paid. a copy of notice and application be also affixed to the court house. applicant filed land revenue receipt. r. r. parcha be filed a week before the date of hearing.case for 23-2-1942.7. it is alleged by the plaintiffs that the present appellant.....
Judgment:

Abhyankar, J.

1. This is defendant No. 1 Laxminarayan's second appeal against the reversing judgment of the District Judge, Akola, passed in Civil Appeal No. 16-A of 3955, arising out of Civil Suit No. 249-A of 1953, decided by the Second Civil Judge, Class II, Akola.

2. Respondents Pandurang, Tulsiram and Vishwanath filed the present suit against the present appellant claiming the following reliefs:

That the Court be pleased to declare that the mortgage in respect of Kazikheda field of the plaintiffs in favour of the defendant No. 1 has been finally discharged on 20-3-1942 and that any mortgage decree obtained by defendants 1 and 2 on the foot of the mortgage is void in law and the defendants 1 and 2 cannot claim possession of the field in execution thereof; as a consequence of this declaration the Court be pleased to enjoin permanently defendants 1 and 2 not to disturb the possession of the field S. No. 24/3 of mouza Kazikheda, Taluq Balapur, District Akola.

3. The suit arose in consequence of the decree on the foot of a mortgage in favour of Fatelal, the deceased father of Laxminarayan.

4. Laxminarayan filed Civil Suit No. 133-A of, 1947 on the foot of a mortgage dated February 20, 1935, executed by Pandhari, the deceased father of the plaintiffs-respondents, in respect of survey No. 24/3. The mortgage suit proceeded ex parte and Laxminarayan obtained possession in execution of the final decree for possession on May 23, 1952.

5. Respondent No, 4 Pundlik claims to be a protected lessee from Tulsiram and Vishwanath in consequence of a lease created in his favour in 1950. Pundlik admitted his liability to attorn to whosoever would be found to be entitled to the field.

6. Prior to the institution of the mortgage suit, Pandurang Tulsiram and Vishwanath, sons of the original debtor Pandhari, had filed an application in the Debt Relief Court at Khamgaon. This application was filed on December 6, 1941, and was registered as Debt Belief Case No. 183 of 1941 (exh. D-3). The order of that date runs thus:

An application under Section 6(1) of the Debt Relief Act is presented by Mr. M. S, Deshpande pleader for the applicant. It is properly drawn up and sufficiently stamped. It be registered. Creditors joined. Issue notices to the Court concerned and the creditors. P. F. be paid. A copy of notice and application be also affixed to the Court House.

Applicant filed land revenue receipt. R. R. Parcha be filed a week before the date of hearing.

Case for 23-2-1942.

7. It is alleged by the plaintiffs that the present appellant Laxminarayan, who was a non-applicant creditor in the Debt Belief proceedings, was served with a notice as required by Section 7 of the C.P. and Bterar Relief of Indebtedness Act, 1939. It is further alleged that the creditor Laxminarayan did not submit a statement of his claim, signed and verified in the manner prescribed by Order VI, Rule 15, Civil Procedure Code, as provided by Section 8(1) of the Relief of Indebtedness Act. The plaintiffs have, therefore, averred in para. 4 of the plaint that inasmuch as the creditor Laxminarayan did not submit a statement of his claim as required by law, the mortgage debt was discharged on March 20, 1942. Now, March 20, 1942, was a date of subsequent hearing to which the debt relief proceedings were adjourned after one more hearing on March 9, 1942, after the first hearing which was on February 23, 1942.

8. The appellant Laxminarayan denied that he was served with a notice. He, however, admitted that the statement of his claim was not filed by him as required by Section 8(1) of the Relief of Indebtedness Act.

9. The learned Judge of the lower appellate Court, while dealing with the question as to whether the creditor had complied with the provisions of Section 8(1) of the Relief of Indebtedness Act, observed as follows in para. 8 of his judgment :

The first point of importance would be regarding whether Laxminarayan was rightly held to be served. The order of the Debt Relief Court (exhibit P-1) was passed on the affidavit of the process-server which showed that Laxminarayan declined, on the ground of illness, to sign the notice which was tendered to him. Under these circumstances, the learned Presiding Officer of the Debt Relief Court was right in treating Laxminarayan as served, under Order 5, Rule 17 (read with Rule 19), of the Code of Civil Procedure. The learned Counsel for the respondent also did not seriously press his contention in this connection. I accordingly find that Laxminarayan had been properly served with the notice from the Debt Relief Court.

Now, Mr. Nandedkar, learned Counsel for the appellant, has not challenged this finding of the learned Judge of the lower appellate Court before me. I, therefore, uphold the finding that the appellant was duly served with a notice on December 25, 1941.

10. The next question is whether the appellant could be liable to incur the consequences for non-compliance of the provisions of Section 8(1) of the Relief of Indebtedness Act. Now, Section 8(1) of the Relief of Indebtedness Act provides as follows:

On or before the date fixed for the hearing of the creditors under Section 7, which shall not be earlier than two months from the date of service of notice, or of the issue of proclamation under Order V, Rule 20, of the Code of Civil Procedure, 1908 (V of 1908), or the same Code as applied to Berar, every creditor shall submit a statement of his claim signed and verified in the manner prescribed by Order VI, Rule 15, of the said Code. Such statement shall be submitted in person, by agent, by pleader or by registered post and every claim not so submitted shall be deemed for all purposes and all occasions to have been discharged as against such debtor or debtors:Provided that if the Debt Relief Court is satisfied that for good and sufficient cause any creditor was unable to submit his claim it may extend the time upon such conditions as to costs as it may think fit and may revive the claim.

The learned Judge of the lower appellate Court in affirming the finding of the trial Court has held that the appellant had failed to comply with the provisions of Section 8(1) of the Belief of Indebtedness Act, and, therefore, it must be taken that the debt was duly discharged. The learned Judge observed in para. 9 of his judgment:

The next question would be regarding the legality of the Order discharging the debt under Section 8(1). The copies of the order-sheets of the Debt Relief Court (exhibit D-3 and exhibit P-1) would show that the date of hearing, on which Laxminarayan was called upon to file his statement was 2 months 17 days from the date of the registration of the application and it was not less than two months. True enough, only 1 month 28 days elapsed between the service of the notice and the date of hearing (23rd February 1941), but the debt was not discharged on that day. The case was twice adjourned on 23rd February 1942 and 9th March 1942 as the Presiding Officer was on casual leave and the debt was ultimately discharged under Section 8(1) of the Relief of Indebtedness Act on 20th March 1942, i.e. 2 months 26 days after the service of the notice on Laxminarayan. Under these circumstances, there was no force in the contentions of the respondent that the debt was illegally discharged.

The learned Counsel for the appellant has challenged this finding before me and I agree that the finding cannot be supported in view of the express provisions of Section 8 of the Belief of Indebtedness Act. It would be seen that Section 8 of the Belief of Indebtedness Act, which deals with the consequences of the defaults or failures of the creditors to do certain acts on receipt of a notice under Section 7, is divided into two categories. Under Sub-section (1) of Section 8 a creditor is required to submit a statement of his claim, signed and verified in the manner prescribed within certain time. If such statement is not submitted, such claim not so submitted is to be deemed for all purposes to have been discharged as against the debtor. It would be seen that the failure to comply with this provision, i.e. omission to file a statement, involves an automatic discharge of the debt. It does not postulate any order of the Debt Relief Court ordering that the debt is discharged. The consequence is automatic. Therefore, in order to attract the penal consequences of this section it is imperative that all the requirements of this section will have to be strictly complied with, and one of the requirements of the section is that in fixing the date of hearing the date shall not be such that it will be earlier than 2 months from the date of service of the notice. Thus, a minimum period of time is required to elapse or to be made available to the creditor from the date of service to the date of hearing fixed in the notice. I find that the time between the date of service of the notice and the date of hearing fixed in the notice was 1 month 28 days i.e. less than 2 months. The question, therefore, that arises for decision is whether on receipt of such notice, which was served on the date from which the period up to the date of hearing fixed in the notice was less than 2 months, the creditor Laxminarayan was bound to file a statement of his claim and was liable to incur the consequences of his claim being discharged for his failure to file the statement.

11. Mr. Nandedkar, learned Counsel for the appellant, has urged that the reasoning of the learned Judge of the lower appellate Court given in para. 9 of his judgment is obviously not in consonance with the provisions of Section 8. What the learned Judge observed is that the date of hearing was fixed from the date of registration of the application and the interval between the two dates was 2 months 17 days. This may be so but that would have no relevance or bearing in deciding the question whether the notice was a valid notice in the sense that the fixed period was more than 2 months from the date of service of the notice within which the statement of claim was to be filed. I find myself in agreement with this contention.

12. It has been urged by Mr. Manohar, learned Counsel for the respondents, that even though the time fixed in the notice was less than 2 months from the date of service of the notice, the actual hearing of the matter took place much longer after 2 months when the matter was placed for final hearing before the Debt Relief Court on March 20, 1942. What he urged is that within that time the creditor should have filed the statement and his failure to do so, even within such extended period caused by adjournments of hearings, should attract the penalty of Section 8(1) of the Relief of Indebtedness Act. It is not possible to accept this contention. There is no provision in Sub-section (1) of Section 8 which entitles the Debt Relief Court to pass an order discharging the claim for non-filing of the written statement. What is provided is that even though a proper notice is served, the creditor can come to the Debt Relief Court and ask for further extension of time if due to certain circumstances he is unable to comply with the notice, i.e. he is unable to comply with the requirement of filing a statement of claim within the time fixed in the notice provided the notice is valid in law. In my opinion, there is no compulsion on the creditor, who has not received a valid notice, to file a valid statement of claim or to incur , penalty of Section 8(1) for failure to do so.

13. It may be seen that Sub-section (2) of Section 8 also provides the consequences of failure to produce the documents or file a statement of accounts. Under this sub-section, the Debt Relief Court is required to come to a finding as to the failure to file statement of accounts or produce documents in possession and on such finding to pass an order discharging the claim. Here again the proviso allows a creditor, for good and sufficient cause, to produce such documents or statement beyond the time fixed in the case. In my opinion, therefore, the effect of non-compliance with the notice being axitomatio, the provision has to be construed strictly and if the notice is defective for any reason, inasmuch as the service is effected within a period of 2 months from the date of hearing fixed in the notice, the penal consequences ought not to follow against such claim.

14. It has been urged that the date of hearing should be construed as a subsequent date of hearing to which the case is adjourned before a Judicial Tribunal. In my opinion, this construction may not be possible as the date of hearing is to be fixed in the notice and subsequent notice is required to be given for subsequent date of hearing to which the case is adjourned from time to time before the Debt Relief Court. If Section 8(1) is read with form IV prescribed for issuing a notice, it will be seen that the form prescribes that the date fixed for hearing- and Section 8(1) has to be read with respect to this date-has to be mentioned in this notice. It cannot possibly be the subsequent or adjourned date of hearing to which the case may be adjourned. Therefore, in my opinion, if there is no compliance with the provisions of Section 8(1), it is not possible to hold that the penal consequences will still follow to the detriment of the claim of the creditor who has failed to file a statement of claim before the date of hearing.

15. That being the position, the finding of the learned Judge of the lower appellate Court that the claim must be deemed to be properly discharged cannot be upheld. I therefore hold, differing from both the Courts below, that the claim of the appellant Laxminarayan could not be deemed to have been discharged under the provisions of Section 8(1) of the Relief of Indebtedness Act.

16. In view of this finding, it will not be necessary to consider the second contention raised by the appellant in this appeal. What is contended is that the plaintiffs, who were parties to the decision in the mortgage suit, ought to have raised the contention in the mortgage suit itself. The plaintiffs having suffered an ex parte decree in the mortgage suit are not entitled to re-agitate the matter by way of second suit challenging the validity of the claim. If the Court erroneously comes to the conclusion that the debt was validly discharged, though in fact it could not be deemed to have been properly discharged, then the Court trying the mortgage suit could not be said to be acting without jurisdiction. The Court could be said to be acting without jurisdiction only in case it was held that the debt was validly discharged. The provisions of Section 23(1) (d) of the Relief of Indebtedness Act bars the jurisdiction of a Court in those eases where a suit is filed in respect of such claim or debt which is deemed to have been discharged tinder Section 8 of the Relief of Indebtedness Act. Now, a debt can be deemed to have been discharged under Section 8 provided it is held that it was validly deemed to have been so discharged. If the initial condition is wanting then it could not be said that the civil Court trying the mortgage suit could have 110 jurisdiction to try the suit. That being the position, I find that the civil Court trying the mortgage suit will have jurisdiction to entertain the claim on mortgage and the plaintiffs, who have suffered an ex parte decree, could not be entitled to challenge that decree on the ground that the Court had no jurisdiction to entertain the mortgage suit. No other points were raised.

17. In the result the appeal succeeds and is accordingly allowed with costs throughout. The decree of the lower appellate Court is set aside and the decree of the trial Court dismissing the plaintiffs' suit is restored.


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