Skip to content


Madanlal Mulchand Soni Vs. Shaikh Mahibub Yakub - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberCivil Revision Application No. 2148 of 1957
Judge
Reported in(1959)61BOMLR1607
AppellantMadanlal Mulchand Soni
RespondentShaikh Mahibub Yakub
Excerpt:
.....application under section 4-whether such creditors' debts governed by section 15(1).;the plaintiff filed applications under section 4 of the bombay agricultural debtors relief act for adjustment of his debts, and in these applications he did not mention certain mortgages created by him in favour of the defendants and that the defendants were his creditors. a general notice under section 14 of the act was ordered to be issued by the court. thereafter the plaintiff filed a civil suit against the defendants under section 15-d of the dekkhan agriculturists' relief act, 1879, for taking accounts of the mortgages, and the civil court decreed that a certain amount was due to one of the defendants from the plaintiff. in the meantime the bombay agricultural debtors relief court held that the..........pending before the court under the act. it was held by mr. justice vyas on these facts that the suit filed by the plaintiffs could be said to be in respect of matters pending before the court established under the act, and, therefore, the civil court had no jurisdiction to entertain the suit under section 51-a of the act. this case is clearly distinguishable on facts. the property which was the subject-matter of the suit filed by the plaintiffs through their guardian dhondiba was the same property that was involved in the application made by dhondiba for adjustment of his debts under the act.5. the second, case relied on by mr. jahagirdar is allemeeya dadu saheb v. hari. : (1956)58bomlr641 . in that case the question involved was one of limitation and it arose in this way. the.....
Judgment:

Gokhale, J.

1. [His Lordship after stating the facts of the case as above, proceeded.] Now the first point which arises in this revision application is whether the learned Judge's view, that the decree in Civil Suit No. 691 of 1950 was a nullity in view of Section 51-A of the Bombay Agricultural Debtors Relief Act is right. It has been already mentioned that this point about the bar of Section 51-A was not specifically urged on behalf of the plaintiff in the trial Court but was urged for the first time in the lower Appellate Court. Under Section 51-A of the Bombay Agricultural Debtors Relief Act, which will hereafter be referred to as the Act, in so far as it is material-.no civil Court shall entertain or proceed with any suit or proceeding in respect of-

(i) any matter pending before the Court under this Act, or

(ii) the validity of any procedure or the legality of any award, order or decision of the Board established under Section 4 of the repealed Act, or of the Court, or

(iii) the recovery of any debt made payable under such award.

Now the view which prevailed with the lower Appellate Court was that when the plaintiff filed Civil Suit No. 691 of 1950 under the Dekkhan Agriculturists' Relief Act, his two applications for adjustment of his debts were already pending in the Bombay Agricultural Debtors Relief Court at Rahuri. It is true that in those applications the mortgage-debts of the petitioners were not mentioned nor were they shown in those two applications as creditors. But since a general notice must be presumed to have been issued under a, 14 of the Act, the question between the petitioners and the plaintiff regarding their mort-gage-debts though not directly involved in the applications must be deemed to be pending before the Court when Civil Suit No. 691 of 1950 was filed, and, therefore, the civil Court had jurisdiction neither that suit nor to proceed with it.

2. Now, Mr. Dalvi, learned advocate appearing on behalf of the petitioners, contends that as the mortgage-debts of the petitioners were not mentioned in the applications filed in the Rahuri Court nor were the petitioners made parties to those applications, it could not be said that Suit No. 691 of 1950 was in respect of any matter pending before the Bombay Agricultural Debtors Relief Court. As against this, Mr. Jahagirdar, learned Counsel appearing on behalf of the opponent, has urged that since a general notice was published under Section 14 of the Act, even though the names of the petitioners were not mentioned in the applications, law will presume that the dispute between the petitioners and the opponent regarding the mortgage-debts was a matter which was pending before the Court under the Act. In support of his argument, Mr. Jahagirdar relied on the ruling in Keshav Ganashyam v. Waman Rangaji (1952) 55 Bom. L.R. 320 where it was held that:

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 (o) of the section, but refers to a11 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.

3. Now, there is no dispute in this Court that a general notice was issued by the Rahuri Court under Section 14 of the Act, and Mr. Jahagirdar produced before me a certified copy of the order dated September 8, 1947, which shows that a general notice as contemplated under Section 14 to all creditors of the opponent was in fact issued. Admittedly, the Rahuri Court held that the opponent-plaintiff was a debtor, and his debts did not exceed Rs. 15,000. On the basis of the ruling cited above, the decision of the Rahuri Court would undoubtedly be bidding on the petitioners. But it is admitted that the final award does not mention the petitioners at all nor does it mention the petitioners as creditors. The question is whether the' fact that a general notice is issued under a. 14 would create a bar in the way of the Ahmednagar Court in entertaining and proceeding with Suit No. 691 of 1950, which was filed by the opponent-plaintiff himself. Section 51-A of the Act ousts the jurisdiction of the civil Court in certain matters, and, in my judgment, it will have to he strictly construed. Two applications were filed by the opponent in the Rahuri Court for adjustment of his debts, and admittedly he did not make the petitioners parties to those applications nor mention in them the mortgage-debts due to the petitioners. He himself filed Suit No. 691 of 1950 under Section 15-D of the Dekkhan Agriculturists Relief Act. He, no doubt, alleged that the suit was got filed fraudulently by the petitioners, but that allegation of his has not been held established by the lower Appellate Court, and no arguments have been addressed to me on that point. It is true that issue of a general notice under Section 14 would make the award passed in the sense that the petitioners would not be able to dispute under the opponent was a debtor and his debts did not exceed Rs. 15,000. 'But, in my Judgment, the issue of a general notice by itself would not bring the debts under the mortgages created in favour of the petitioner before the Bombay Agriculture Debtors Relief Court since neither the names of these creditors nor their debts were mentioned in the debtor's applications and in the awards that came to be subsequently made and it cannot, therefore, be said that Civil Suit No. 691 of 1950 was a suit in respect of any matter pending before the Court.

4. In support of his argument that Section 51-A of the Act ousted the jurisdiction of the civil Court, Mr. Jahagirdar has referred to two cases. In the case of Asaram Bapu Waghmodas v. Bhanudas (1955) 58 Bom. L.R. 95 the facts were as follows: One Dhondiba, the father of three minor plaintiffs, had passed a possessory mortgage-deed of certain properties in favour of the defendants. Dhondiba then made an application to the Bombay Agricultural Debtors Relief Court for adjustment of his debts showing the defendants as creditors. Subsequently, he passed a sale-deed in respect of the property in favour of the defendants. During the pendency of the Debt Adjustment Applications, the plaintiffs, through Dhondiba as their guardian, filed a suit inter alia for a declaration that the sale-deed passed by Dhondiba in favour of the defendants was void under Section 40 of the Act. The defendants contended that under Section 51-A of the Act, the civil Court had no jurisdiction to entertain the suit as the suit was filed in respect of a matter pending before the Court under the Act. It was held by Mr. Justice Vyas on these facts that the suit filed by the plaintiffs could be said to be in respect of matters pending before the Court established under the Act, and, therefore, the civil Court had no jurisdiction to entertain the suit under Section 51-A of the Act. This case is clearly distinguishable on facts. The property which was the subject-matter of the suit filed by the plaintiffs through their guardian Dhondiba was the same property that was involved in the application made by Dhondiba for adjustment of his debts under the Act.

5. The second, case relied on by Mr. Jahagirdar is Allemeeya Dadu Saheb v. Hari. : (1956)58BOMLR641 . In that case the question involved was one of limitation and it arose in this way. The decree-holder had made an application under the Act for adjustment of his debts under a money-decree. On the date of the hearing of the application, the defendant was absent, and the Court held that defendant was not a debtor. An application was made by defendant to set aside the order passed in that case, but that application was dismissed. Thereafter plaintiff filed an application for execution, and the question was whether that application for execution was in time. Plaintiff contended that he was entitled to deduct the period occupied by the proceedings pending before the Debt Adjustment Court, when an ex parte order was passed, and also the time occupied during the determination of the application made by the defendant for setting aside the ex parte order, and it was held that he was entitled to exclude both these periods. As regards the period occupied for setting aside the ex parte order on the application of the defendant, that period was allowed to be excluded on the ground that the plaintiff could not have made an application for execution of during that period by virtue Section 51-A (i) of the Act. Here again the decree during that was sought to be executed by the plaintiff was the subject-matter of pending proceedings under the Act, and, therefore, Section 51-A was held to be applicable. The principle laid down in this case can have no application to the present case. The learned Judge's view that the decree passed in Civil Suit No. 691 of 1950 under the Dekkhan Agriculturists' Relief Act was a nullity by virtue of Section 51-A of the Act and was not binding on the plaintiff is, therefore, not correct.

6. But even though the bar of Section 51-A of the Act does not affect the petitioners, that by itself will not make the decree obtained by them in Suit, No. 691 of 1950 binding on the opponent. As I have already indicated, there being a general notice issued to the creditors under Section 14(6) of the Act, the findings of the Debt Adjustment Court that plaintiff was a debtor and his debts did not exceed Rs. 15,000 would be binding on the petitioners, and the mortgage transactions in favour of the petitioners would then be governed by the provisions of the Act, and it would not have been open to the petitioners to file a suit under the Dekkhan Agriculturists' Relief Act. A reference has to be made in this connection to Section 56(i) of the Act which, in so far as it is material, provides as follows:-

Notwithstanding the repeal of the Dekkhan Agriculturists' Relief Act, 1.879, by the Bombay Agricultural Debtors Relief Act, 1939, the first mentioned Act shall, in so far as it applies to transactions and proceedings to which this Act does not apply, be deemed to have been re-enacted with effect from the date of the coming into operation of this Act (hereinafter in this section referred to as the said date) and shall continue in force for a period of three years from the said date:...

The effect of this section is that on the date of the coming into operation of the Act, the Dekkhan Agriculturists' Relief Act, 1879, must be deemed to have been re-enacted and would be in force for a period of three years, but it will govern only those trasactions and proceeding to which the Act does not apply. Once it is 'held that The opponent-plaintiff is a debtor and his debts do not exceed Rs. 15,000, then the mortgage transactions in suit would be governed by the Act and could not have been made the subject-matter of any proceedings under Pekkhan Agricuturists' Relief Act. In that view of the matter, it must be held that the decree passed by the civil Court in Civil Suit No. 691 of 1950 on July 30, 1952, was without jurisdiction and will not bind the opponent.

7. But then it is contended that the view of the learned Appellate Judge that the mortgage debts due to the petitioners were extinguished was not sound, and reliance is placed in this connection on Section 15(2) of the Act. Tinder Section 15(1)), in so far as it is material, it is provided that every debt due from a debtor in respect of which a statement is not submitted to the Court by the creditor in compliance with the provisions of Section 14 shall be extinguished. In Laxman Babaji v. Akharam Sahebram : AIR1959Bom18 it was held by a division bench of this Court that Section 15(1) of the Act applies in terms to 'every debt' and is not restricted to debts due and are served with notice under Section 14(a) of the Act. In the present case, admittedly the petitioners were not named in the applications for adjustment of debts filed by the opponent. But a general notice having been issued under Section 14(b), the debts of the petitioner also would be governed by the provisions of Section 15(1) of the Act. But then Mr. Dalvi contends that in the present case, it could not be 'said that he would be affected by the publication of the general notice under Section 14(6), because, according to him, the opponent was guilty of contravening some of the mandatory provisions of the Act. The applications for adjustment of debts in the Rahuri Court were filed under Section 4 of the Act. The application that has to be filed has to be in a prescribed form as mentioned in Rule 4 of the Bombay Agricultural Debtors Relief Act Rules. The 'application has to be made in form No. 1 when it is filed by a debtor. Under Section 4(3) of the Act,

Notwithstanding anything contained in Section 3 an application made under this section shall contain the amounts and particulars of all debts specified in that section due by the debtor.

Mr. Dalvi contends that though under Section 3 certain debts and liabilities of a debtor mentioned in that section are saved, all those debts and liabilities have to be mentioned by the debtor when he makes an application under that section. Paragraph 5 of Form No 1. which is the from to be used by a debtor, also provides that the applicant has to declare that all debts which are due or which to his knowledge any person claims to be due from him, and all his properties have been included in the statements contained in the application. Mr. Dalvi's argument is that if Section 4 and Rule 4 of the Act require a debtor to submit a statement of all the debts, and if the debtor deliberately suppresses some of his debts in making his application for adjustment of debts, then a general notice issued under Section 14(b) will not be binding on the creditor whose name and debts have not been included in the application. I am not impressed by this argument. It may be that the creditor circumstances may be able to change the Bombay Agricultural Debtors Relief Court on the ground ofn fraud, collusion or such other grounds, but merely because the names of certain creditors and their debts were not mentioned in the application for adjustment of debts Ido not think, that it will in any way affect the validity of the general notice issued by the Bombay Agricultural Debtors Relief Court. By providing for the issue of a general notice under Section 14(b) the Legislature obviously intended that not only all those creditors, mentioned in the application who could not be served or were not served for some reason or other, but also other creditors, who were not mentioned in the application by the debtor, should get an opportunity to come before the Court and prove their debts. See Keshav Ganashyam v.Waman Rangaji (1952) 55 Bom. L.R. 320. It has also to be mentioned that the present petitioners did not allege in the written-statement that the proceedings before the Bombay Agricultural Debtors Relief Court were vitiated by any collusion between the plaintiff and the creditors mentioned in those applications.

8. But then Mr. Dalvi contends that assuming that the provisions of Section 15(1) apply to the debts of the petitioners, their claim against the debtor would be saved by Section 15(2) of the Act. Section 15(2) provides as follows:-

Nothing in this section shall apply to any debt due from any person who has by his declaration, act or omission intentionally caused or permitted his creditor to believe that he is not a debtor for the purposes of this Act or that no application under Section 4 can be entertained in respect of any debt owed by such person to such creditor by reason of the provisions of Section 11.

Now the learned Appellate Judge held that the claims of the petitioners were not saved under Section 15(2). Undoubtedly, evidence was given on behalf of the petitioners that certain representations were made by the opponent which induced them to believe that he was not a debtor. The lower Appellate Court has not accepted this evidence, and, in revision, I do not think that it would be open to me to re-appreciate that evidence. It is true that the applications were filed under the Act at Rahuri in February 1947, and the opponent himself filed Suit No. 691 of 1950 in the civil Court at Ahmednagar on May 26, 1950, under Section 15-D of the Dekkhan Agriculturists' Relief Act. But the filing of the suit would not amount to any misrepresentation, because the suit was field long after the last date before which applications could be filed under the Act and that date was July3l 1947. Petitioner No. 1 is a pleader, and it is impossible to hold that there were any mis-representations In this part of the opponent which could have induced him to 'believe that the opponent was not a debtor. Besides, the preliminary issues in Application Nos. 528 of 1947 and 1390 of 1947 were decided on February 26, 1952, and the opponent was held to be a debtor and his debts were held not to exceed Rs. 15,000. The final awards came to be passed on April 2, 1952, and it seems that the awards were produced in Suit No. 691 of 1950. That is what is alleged in the plaint of the present suit, and that does not seem to have been disputed by the written statement filed by the petitioners.

9. Mr. Dalvi then contends that the suit under the Dekkhan Agriculturists Relief Act should have been got transferred to the Bombay Agricultural Debtors Relief Court, because it was filed for the purpose of taking accounts, and if the opponent was a debtor and his debts did not exceed Rs. 15,000, then it /was incumbent on the part of the civil Court to transfer the proceedings to the (Bombay Agricultural Debtors Relief Court, and it was the opponent whose duty it was to apply for transfer, and he having failed to do so, he cannot now take advantage of the provisions of Section 15(1) of the Act. In support of his argument, Mr. Dalvi relies on the ruling in Mohamad Sadik v. Hussein Miya. : AIR1954Bom548 . In this case a division bench of this Court held that:-

The failure on the part of a debtor to make the necessary allegations under Section 19(1) of the Act, which would lead to the transfer of a suit or appeal to the Bombay Agricultural Debtors Relief Act Court, must incur the penalty laid down in Section 15(2) of the Act and the penalty is that the debtor cannot contend that the debt which, is the subject-matter of the suit or appeal is extinguished by reason of Section 15(1) of the Act.

That case again is distinguishable on facts. A partition decree was passed in that case on March 31, 1945, and defendant No. 1 filed an appeal, intimately the District Court, by its judgment dated October 18, 1947, modified the decree of the trial Court. Defendant No. 6 then filed two darkhasts, one against defendant No. 1 and the other against defendant No. 2, and the contention of those two defendants was that the judgment-debt was extinguished, and, therefore, a darkhast could not be presented in respect of that judgment-debt. The last date for making application for adjustment of debts in that ease was July 31, 1947, that is to say, before the District Court Decied the apple. The proceedings in appeal in that case, therefore, could have been got transferred to the Bombay Agricultural Debtors Relief Court if they had involved the questions referred to in Section 19(1) of the Act, but as the appealdid not invole any of these question, the proceedings could not have been so transferred. It was in these circumstances that this Court held that the failure on the part of defendants Nos. 1 and 2 to make the relevant allegations before the District Court must have led the creditor to Belive that they were not debtors and that the District Court had jurisdiction to dispose of the case.

10. Now, in the present case, the suit, which was filed under the Dekkhan Agriculturists' Relief Act, was filed on May 26, 1950 that is to say, long after the date before which applications to the Bombay Agricultural Debtors Relief Court could have been filed. Besides, it does appear that the awards passed in the Bombay Agricultural Debtors Relief proceedings were placed on the record of the Civil Suit by the opponent. I do not think, therefore, that there was fairure~on~tFe part of the opponent which could bring into operation the penalty laid down in Section 15(2) of the Act, even assuming that the proceedings in the Dekkhan Agriculturists' Relief Suit could have been validly transferred to the Bombay Agricultural Debtors Relief Court. I am, therefore, of the view that the finding of the learned Appellate Judge that the petitioners are not entitled to the benefit of Section 15(2) must be upheld.

11. The trial Court held that the defence of the opponent was barred by the principle of constructive res judicata since the opponent '313 not contend in Civil Suit No. 691 of 1950 under the Dekkhan Agriculturists Relief Act that the debts due to the petitioners were extinguished. Mr. Dalvi has fairly, and in my opinion rightly, conceded that in ease I hold that the Court trying Civil Suit No. 691 of 1950 had no jurisdiction to try the suit under the provisions of the Dekkhan Agriculturists' Relief Act, that decree would be a nullity, and there would be no question of any constructive res judicata.

12. The last point that was urged is that the plaintiff brought the suit for certain declarations and an injunction, and he had not prayed for consequential relief of the redemption and possession and, therefore, the suit would be barred by the provisions of Section 42 of the Specific Relief Act. That contention was upheld by the lower Appellate Court, but it decided to give an opportunity to the plaintiff to amend his plaint so as to convert the suit into one for redemption. Mr. Dalvi says that this decision of the lower Appellate Court is erroneous in the circumstances of this case. Now, once it is held that the debts due to the petitioners are extinguished by reason of the provisions of Section 15(1) of the Act, it would be open to the plaintiff to seek redemption and possession. It is true that he could have obtained the same relief through the Bombay Agricultural Debtors Relief Court if he had made the petitioners parties to the proceedings before that Court, but there was no adjudication of the Bombay Agricultural Debtors Relief Court so far as the debts due to the petitioners are concerned, and if those debts are extinguished, the only right to which the plaintiff-opponent will be entitled will be the right of of redemption and possession. In my judgment, the lower Appellate Court was right when it exercised its discretion in giving an opportunity to the plaintiff to amend his plaint so as to convert the suit into one for redemption. Unfortunately, the lower Appellate Court instead of allowing the plaintiff to make the necessary application for amendment remanded the suit to the trial Court after setting aside its decree and directed the trial Court to give an opportunity to the plaintiff to amend his plaint so as to convert the suit into one for redemption. In doing so, it has made the following curious remark:

I am following this course not so much with a view to avoid multiplicity of pro- ceedings but to give the defendants an opportunity to challenge the findings recorded by me in this appeal.

It is really difficult to appreciate the implications of this observation. As I have already stated, though both the lower Courts have come to the conclusion on the evidence that the plaintiff was not a debtor and that his debts exceeded Rs. 15,000, the lower Appellate Court held, and in my judgment rightly, that these questions could not be decided by the civil Court. The findings of the Bombay Agricultural Debtors Relief Court that the plaintiff is a debtor and that his debts do not exceed Rs. 15,000 are binding on the petitioners;. The further finding by the lower Appellate Court that the decree in Civil Suit No. 691 of 1950 was without jurisdiction has been upheld by me though for a different reason. Another finding of the lower Appellate Court that the debts due to the petitioner are extinguished by virtue of the provisions of Section 15(2) and are not saved under Section 15(2) is also upheld by me. In my view, it would not be open to the amendment of the plaint if hat amendment were allowed. Therefore the order of the lower Appellate Court remanding the suit was not necessary at the present stage. The lower Appellate Court should have itself allowed the plaintiff to file an application for amendment of the plaint and should have given an opportunity to the defendants to raise their contentions against this amendment. In case, it was then found by the lower Appellate Court that it was necessary to remand the case to the trial Court, then it would have been open to the lower Appellate Court to do so at that stage.

13. The result is that subject to the findings of the Appellate Court, which have been confirmed by me, I set aside the order remanding the suit and send down the case to the Appellate Court to entertain the application, if any, to be filed by the plaintiff for converting the present suit into one for redemption after payment of the necessary Court-fees. In case the application is allowed and the suit is converted into one for redemption, an opportunity will be given to the present petitioners to amend their written-statement and to take such defences as may be open to them in the light of the present judgment. In ease the lower Appellate Court finds thereafter that it is necessary to remand the suit to the trial Court, then it would be open to the Appellate Court to do so. Otherwise, it will dispose of the appeal in accordance with law.

14. As regards the costs, it is quite apparent that the opponent has been largely responsible for the present proceedings. He filed the applications for adjustment of the mortgage-debts in the Bombay Agricultural Debtors Relief Court at Ahmednagar though he was a resident of Rahuri. He filed fresh applications for adjustment of debts in the Court at Rahuri without impleading the present petitioners and without mentioning their mortgage debts. He was himself responsible for filing Civil Suit No. 691 of 1950 for accounts under Section 15-D of the Dekkhan Agriculturist's Relief Act, and in allowing it to proceed which resulted in a decree under which Rs. 4,630 were found due to petitioner No. 1. Though the awards of the Bombay Agricultural Debtors Relief Court were filed in that suit, the attention of the civil Court was not drawn, it appears, to those awards. In 1952, petitioners Nos. 2 to 7 filed Civil Suit No. 292 of 1953 to enforce their second mortage, and in that suit an ex parte decree was passed in their favour but it ultimately came to be set aside at the instance of the opponent and it was only in April 1954 that he filed the present suit. In my view the equities are wholly in favour of the present petitioners. Besides. they are mortgagees. I, therefore, direct that the costs of the entire proceedings in the present suit and in the apple below so far as well as the costs of this revision application will be borne by the respective contending parties.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //