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ismailbhai Sardarbhai Bhagwan Vs. Kondi Ravaji Phadtare - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 290 of 1955
Judge
Reported in(1960)62BOMLR169
Appellantismailbhai Sardarbhai Bhagwan
RespondentKondi Ravaji Phadtare
DispositionAppeal Dismissed
Excerpt:
.....agricultural debtors relief act (bom. xxviii of 1947), section 2-amount claimed as damages for breach of agreement-whether such amount debt within section 2(4).; an amount claimed as damages for breach of an agreement is a liability in cash and, therefore, amounts to a 'debt' within the meaning of section 2 of the bombay agricultural debtors relief act, 1947.; iron & hardware (india) co. v. shamlal bros. (1954) 56 bom. l.r. 473, and jethabhai rambhai v. rao laxmanrao (1952) 54 bom. l.r. 479, referred to. - - 344 and 346 at bopgaon to be enjoyed by him for a period of 10 years for a consideration of rs. 9,500. the plaintiff agreed to accept the offer, and accordingly on june 17, 1943, a registered agreement, which is styled as sale deed, was passed by the defendants in favour of..........full period of 10 years. therefore, there cannot be any doubt that the claim is founded upon the breach of agreement. then, we have to consider whether such liability as arises from the breach of the agreement is a liability for the purpose of the definition of the term 'debt' under the bombay agricultural debtors relief act. it seems to us, reading the section by itself, the definition is wide enough to include a liability of the present nature. the definition says that 'debt' means any liability in cash or kind. in the present case, the liability that is sought to be enforced against the defendants is a liability in cash. plaintiff in fact has claimed an amount of rs. 11,000 on account of the liability incurred by the defendants in that they had committed a breach of the terms of the.....
Judgment:

Datar, J.

1. This is an appeal filed by the plaintiff against the decree dismissing his Special Suit No. 6 of 1953 on the file of the Court of the Joint Civil Judge, Senior Division, Poona.

2. A few facts which led up to the institution of the present suit may be stated. One Chunilal Rupchand had obtained a money decree for Rs. 16,000 and odd against the present defendants and was executing the same in darkhast No. 284 of 1940. The defendants were making efforts to raise money necessary to satisfy the darkhast amount due to Chunilal. The darkhast was still pending in 1943. In 1943 the defendants approached the plaintiff and offered to transfer their musumhi garden situate in survey Nos. 344 and 346 at Bopgaon to be enjoyed by him for a period of 10 years for a consideration of Rs. 9,500. The plaintiff agreed to accept the offer, and accordingly on June 17, 1943, a registered agreement, which is styled as sale deed, was passed by the defendants in favour of the plaintiff, under which plaintiff was to go into possession of the garden and enjoy the same for a period of 10 years. Before the execution of this sale deed, an amount of Rs. 500 was paid as earnest to the defendants. Another amount of Rs. 4,500 was paid on the date of the execution of the sale deed. Thereafter some time in 1944 or 1945 a further amount of Rs. 2,400 was paid towards the satisfaction of the balance of the consideration which (balance) had to be paid: in certain instalments as mentioned in the sale deed. Plaintiff enjoyed the garden and reaped the fruit therein for the years 1944, 1945 and 1946. Then, plaintiff says that some time in August or September 1947 the defendantsunauthorisedly cut all the musumbi trees and made it impossible for him to reap the fruit and enjoy the garden for the remaining period of the term, as stipulated in the agreement dated June 17, 1943. Plaintiff, therefore, claims that he has suffered a loss on account of the breach of the agreement committed by the defendants, and says that he is entitled to an amount of Rs. 9,000 calculated at Rs. 1,500 per year as the income from the garden for six years till 1953. He has also claimed a further amount of Rs. 5,300, though it is by no means clear on what basis he has made that claim. In the plaint, however, the total claim is mentioned at Rs. 11,000, and it is this claim for which the plaintiff instituted the suit on January 15, 1953, in the Court below. The cause of action for the suit was stated to have arisen in August or September 1947 when the defendants unauthorisedly cut the trees.

3. The defendants contended that the transaction embodied in the sale deed dated June 17, 1943, was a benami transaction and that the real transferee who took the sale deed from them was not the present plaintiff but their creditor Chunilal. They also contended that at all material times they were debtors within the meaning of the Bombay Agricultural Debtors Relief Act and that the plaintiff not having filed an application for adjustment of his debts under Section 4 of the Act, the debt due to him must be regarded as having been extinguished in view of the provisions of Section 15 of the Act.

4. It is not necessary to go into the question whether the transaction was a benami transaction, as contended by the defendants. The learned trial Judge has held that the defendants have not succeeded in proving that the transaction was benami. The appeal can be disposed of on the point whether the liability, which, according to the plaintiff, had been incurred by the defendants, must be regarded as having been extinguished in view of the failure on the part of the plaintiff to approach the Special Court under the Bombay Agricultural Debtors Relief Act within the statutory period of time and make an application for the adjustment of his debts under Section 4 of the said Act. It is not disputed that the defendants were debtors at the material time. The only question, therefore, that falls to be considered is whether the liability, in respect of which the present claim has been made by the plaintiff, was such a liability as amounted to a 'debt' within the meaning of Section 2 of the Bombay Agricultural Debtors Relief Act.

In Section 2(4) 'debt' is defined as meaning

any liability in cash or kind, whether secured or unsecured due from a debtor whether payable under a decree or order of any civil Court or otherwise and includes mortgage money the payment of which is secured by the usufructuary mortgage of immoveable property but does not include arrears of wages payable in respect of agricultural or manual labour.

Now, it may be noted that the plaintiff has founded his cause of action upon the breach of the agreement dated June 23, 1943. He has contended that he was entitled to reap the fruit of the garden for a period of 10 years as stipulated in the agreement, but before the expiry of that period, the defendants forcibly took possession of the garden and destroyed the trees and made it impossible for him to enjoy the income from the garden for the full period of 10 years. Therefore, there cannot be any doubt that the claim is founded upon the breach of agreement. Then, we have to consider whether such liability as arises from the breach of the agreement is a liability for the purpose of the definition of the term 'debt' under the Bombay Agricultural Debtors Relief Act. It seems to us, reading the section by itself, the definition is wide enough to include a liability of the present nature. The definition says that 'debt' means any liability in cash or kind. In the present case, the liability that is sought to be enforced against the defendants is a liability in cash. Plaintiff in fact has claimed an amount of Rs. 11,000 on account of the liability incurred by the defendants in that they had committed a breach of the terms of the agreement dated June 23, 1943. Therefore, it cannot be doubted that this was a liability in cash.

5. Learned advocate Mr. Paranjpe contends that in a case where damages are claimed, as in the present case, there cannot arise any liability on the date of the institution of the suit. The liability amounting to a debt can only arise after the Court determines that the defendant is liable for a particular amount by way of damages or compensation. It is not possible to accept this contention. The definition says: any liability in cash or kind due from a debtor whether payable under a decree or order of any civil Court or otherwise. It is not as if that the liability for the first time is incurred by the defendant, only when the Court determines the question whether he is liable to pay any amount or not. The liability is there having been incurred by the defendant on the day the breach of the agreement was committed. We are here proceeding on the basis that such liability was incurred by the defendant on the day on which the breach was committed, namely, some time before the month of August 1947. In fact, the learned trial Judge has also recorded his finding that the trees were demolished by the defendants some time before the month of August 1947. It is also not disputed that the last date for filing the application for adjustment of debt under Section 4 of the Act was August 1, 1947, so that the plaintiff, when he contended that defendant had incurred a liability because of the breach of agreement in that he had made it impossible for him to enjoy the usufruct of the garden for the full term of the agreement, he had only to get that liability adjusted under the provisions of Section 4 within the statutory period, namely, before August 1, 1947.

6. Mr. Paranjpe relied upon a decision of this Court reported in Iron & Hardr ware (India) Co. v. Shamlal Bros : AIR1954Bom423 . He relied particularly upon the observations made by the then Chief Justice Mr. Chagla, and they are at page 477. The learned Chief Justice observed:.Now, in order that there should be a debt there must be an existing obligation. The payment may be due immediately or it may be due in future, but the obligation must arise in order that the debt should be due. It may even be that the actual amount due in respect of the debt may require ascertainment by some mechanical process or by the taking of accounts. But even when the actual amount is to be ascertained the obligation must exist. It is well 'settled that when there is a breach of contract the only right that accrues to the person who complains of the breach is the right to file a suit for recovering damages. The breach of contract does not give rise to any doubt....

Relying upon these observations, the learned advocate contended that it could not be said that there was a liability or a debt within the meaning of the definition under the Bombay Agricultural Debtors Relief Act immediately after a suit was instituted by the plaintiff for damages. Now, it must be remembered that the observations were made in a case which arose before the learned Chief Justice under the Displaced Persons (Debts Adjustment) Act of 1951, and we do not think it would be either necessary or proper to rely upon the observations made in regard to a question that arose under a different Act.

7. Mr. Paranjpe further contended that the definition of the word 'debt' under Section 2(6) in the Displaced Persons Act was almost similar to the definition with which we are now concerned in the present case. Even assuming that were so, we think it desirable that we should base our decision upon the definition as we find it in the Bombay Agricultural Debtors Relief Act and not upon the definition of 'debt' as we find it in the Displaced Persons (Debts Adjustment) Act of 1951 and the observations made by the learned Chief Justice while considering that definition. On the other hand, there is a decision of a Division Bench of this Court reported in Jethabhai Bambhai v. Rao Laxmanrao : AIR1953Bom96 . There, the learned Chief Justice Mr. Chagla and Mr. Justice Gajendragadkar, as he then was, held that a suit for possession in which mesne profits are claimed is not a suit which is liable to be transferred to the Debt Adjustment Court under Section 19(1) of the Bombay Agricultural Debtors Relief Act, 1947, and that if the Court (the ordinary civil Court) came to the conclusion that the plaintiff had proved his title and that the defendants were in wrongful possession it would be at that stage that the question of mesne profits would arise (p. 482) :. Then the Court would pass a decree for possession in favour of the plaintiff and would transfer the suit to the Debt Adjustment Court in order to determine the question of mesne profits. The Debt Adjustment Court will then determine whether any mesne profits are payable by the defendants, and also what is the quantum of mesne profits;....

It is true that in that case the question which is now raised by Mr. Paranjpe did not directly arise; but still it was held that the proper Court to determine whether any mesne profits are payable and also what is the quantum of mesne profits would be the Debt Adjustment Court under the Bombay Agricultural Debtors Relief Act. If the liability to pay mesne profits is to be determined by the Debt Adjustment Court, it is because such liability is regarded as debt for the purposes of the Act. The claim for mesne profits, it need hardly be stated, is virtually a claim for damages. We do not, therefore, see why any distinction should be made between the liability to pay mesne profits and the liability to pay damages as claimed in the present suit.

8. Then, Mr. paranjpe contended that it was his case that the breach of the contract was committed by the defendants some time in August or September 1947. Originally there was an averment in the plaint that the breach of the contract was committed some time in December 1946, or in January 1947. After the defendants put in their contentions, namely, that the liability such as it was was in the nature of a 'debt' within the meaning of the Bombay Agricultural Debtors Relief Act, and that they being debtors under that Act their debt must be deemed to have been extinguished by reason of the provisions of Section 15, the plaintiff made an attempt for amendment of his plaint and got an amendment allowed to the effect that the breach of agreement was committed by the defendants some time in August or September 1947. The learned Judge, on appreciation of the evidence before him, has- recorded a finding that the trees were destroyed some time before the month of August 1947 and that the amendment had been sought for just to circumvent the defence raised under the Bombay Agricultural Debtors Relief Act. It may also be noted that even in the notice which preceded the institution of the present suit, the complaint that was made by the plaintiff was that the trees had been demolished some time in December 1946 or January 1947. Under these circumstances, it must be held that the trees had been destroyed some time before the beginning of August 1947. If that were so, the plaintiff had his right to make an application under Section 4 of the Bombay Agricultural Debtors Relief Act for the adjustment of his debts, and such an application not having been made, it must be held that his debts were extinguished under the provisions of Section 15 of the Act.

9. In view of our finding on this point, it is not necessary to consider the other questions raised by the learned advocate for the appellant.

10. The result is that the appeal fails and must be dismissed with costs.


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