1. This is an appeal by the original defendants Nos. 1 and 2 against a decree passed in favour of the plaintiffs awarding them possession of the suit land in enforcement of their right of pre-emption. The suit land admeasures 21 acres 29 gunthas out of survey No. 141 of village Nanded Buzruk, Taluq Daryapur, District Amravati. It was owned by one Nathu. It appears that Nathu was Indebted to some creditors and there were debt proceedings in respect of his debts and these terminated in framing of a scheme dated July 15, 1940, under Section 11 of the C.P. and Berar Relief of Indebtedness Act, 1939, which I will hereafter refer to as the Debt Relief Act. Under that scheme there were two creditors of Nathu, one Eknath who was to be paid Rs. 1,096, and another Sitaram who was to be paid Rs. 450. The last instalment payable to Sitaram was in 1949 and that payable to Eknath was in 1952. On May 16, 1947, Nathu sold to the plaintiffs 8 acres out of survey No. 141 by a sale-deed which is exh. P-3. The land thus purchased by the plaintiffs has no concern with the land in suit and forms a different portion of survey No. 141. On June 2, 1949, Nathu gave on lease the suit land in favour of Rajaram Bapurao, the present appellant No. 2, for a period of ten years, the lease to commence from the year 1950-51. On January 3, 1951, Nathu sold the suit property which was leased to Rajaram, to Bapurao, the father of Rajaram, for a consideration of Rs. 9,000 and that sale-deed is exh. P-2. The sale was subject to the registered lease effected in favour of Rajaram. By virtue of this sale, the plaintiffs claimed to exercise their right of pre-emption on the basis that they were co-occupants in survey No. 141 by reason of their purchase of 8 acres of land in the same survey number from Nathu on May 16, 1947 (exh. P-3). They also claimed to exercise their right of pre-emption free from the liabilities of the registered lease created in favour of Rajaram in 1949. On these allegations the plaintiffs filed their suit to enforce their right of pre-emption on November 16, 1951. The defendants Bapurao and his son Rajaram resisted the suit on the ground that the plaintiffs had no right of preemption as they were not co-occupants in survey No. 141, their sale-deed being void as they had purchased 8 acres of land from the said survey number from Nathu while the scheme of repayments of his debts had not been exhausted, and they relied for this purpose on the provisions of Section 15(2) of the Debt Relief Act. The defendants also denied the plaintiffs' allegation that the lease executed in favour of Rajaram was intended to defeat any rights of pre-emption of the plaintiffs but was a valid transaction, and, therefore, even assuming that the plaintiffs were entitled to pre-empt, the registered lease in favour of Rajaram could not be said to be nominal and void and the plaintiffs would have to take possession of the land subject to the provisions of the lease.
2. On these pleadings the trial Court raised several issues and held that the lease transaction dated June 2, 1949, was a nominal transaction without any consideration and was brought about to put an obstruction to the plaintiffs' right of pre-emption. It also held that the scheme framed by the Debt Relief Court in respect of Nathu's debts was not pending at the time of the plaintiffs' sale transaction dated May 16, 1947, the debt of Bknath as well as that of Sitaram having been satisfied. It also came to the conclusion that the transaction in favour of the plaintiffs was not void under Section 15(2) of the Debt Relief Act. Consequently, it gave a finding that the plaintiffs were co-occupants of the land in suit and were entitled to enforce their right of pre-emption. That is why it passed a decree in favour of the plaintiffs awarding them possession of the suit land on the plaintiffs' depositing in Court the amount of Rs. 9,000 minus the costs of the suit for payment to defendant No. 1. Both the defendants challenge the correctness of this decision in this appeal.
3. Mr. R.N. Deshpande, the learned advocate appearing for the plaintiffs, has contended that the learned trial Judge was wrong in his view of the legal position under Section 15(2) of the Debt Relief Act. Mr. Deshpande contends that the provisions of that section are mandatory and the question of satisfaction of debts is irrelevant; and whether the creditors of Nathu were paid their debts or not was not a matter which could be considered by the civil Court. According to Mr. Deshpande, the sale in favour of the plaintiffs was void because it was made without the requisite sanction of the Deputy Commissioner as contemplated by Section 15(2) of the Debt Relief Act. Now, there is no dispute that a scheme (exh. P-7) was prepared for repayment of the debts of Nathu under Section 11 of the Debt Relief Act on July 15, 1940, and that the debts of Sitaram were repayable by the year 1949 and those of Eknath by the year 1952, Section 35 of the Debt Relief Act makes transfers made in certain circumstances invalid. Thus under Section 15(2), no transfer of immovable property shall be valid if made by a debtor, in respect of whose debts proceedings are pending under Section 5 or 6, unless made with the sanction of the Debt Relief Court. Then Section 15(2) provides as follows:
Every transfer of immovable property made by a debtor in respect of whose debts a scheme has been prepared under Sub-section (1) of Section 11, shall be void unless made with the sanction of the Deputy Commissioner within whose jurisdiction the debtor ordinarily resides or earns his livelihood. The Deputy Commissioner shall not sanction any transfer of such property unless he is satisfied that such transfer will not defeat the claims of any creditor the payment of whose claims has been ordered by such scheme.
Now, in my judgment, the provisions of this section seem to be mandatory. When a scheme has been prepared in respect of debts payable by a debtor tinder Sub-section (1) of Section 11, any transfer of immovable property made by that debtor is void unless the requisite sanction of the Deputy Commissioner is obtained. Without such sanction, the debtor is not competent to pass any valid title to the transferee. It is for the Deputy Commissioner to sanction such transfer or not, and the section provides that he shall not sanction the transfer unless he is satisfied that such transfer will not defeat the claims of any creditor the payment of which has been ordered by a scheme under Section 11(1), It is the satisfaction of the Deputy Commissioner that the transfer will not defeat the claims of any creditor that is relevant under the section. Mr. Deshpande, in my opinion, is right in his contention that under these circumstances the question whether the debts of Sitaram and Eknath were satisfied before the transfer in favour of the plaintiffs could not and should not have been considered by the civil Court.
4. I am strengthened in this view by an unreported decision of the Nagpur High Court in Kisanlal v. Zumki (1947) C.R.580 of 1945. That was a case where the creditor himself purchased certain property from the debtor after the scheme under the Debt Relief Act was prepared and a part of the consideration was the satisfaction of his debt. No sanction of the Deputy Commissioner was obtained to this transfer; and Mr. Justice Vivian Bose held on these facts that the transfer was void under the provisions of Section 15(2) of the Debt Relief Act.
5. In that view of the matter, it is really not necessary for me to consider the other point raised by Mr. Deshpande that the finding of the lower Court that the debts of both the creditors, Eknath as well as Sitaram, were satisfied prior to May 16, 1947, the date of the plaintiffs' sale, was erroneous. But since the point was also argued before me and evidence was read, I propose briefly to indicate my views on that point also. Mr. Deshpande does not challenge the finding of the lower Court that the debts of Eknath were satisfied before the sale in favour of the plaintiffs. He only takes objection to the finding of the trial Court that Sitaram's debts were satisfied. As I have already stated, under the scheme Rs. 450 were payable to Sitaram by instalments, the last instalment to be paid being in 1949. The learned trial Judge was impressed by Nathu's anxiety to satisfy his liability earlier which found expression in the actual satisfaction of Eknath's much larger debt. The receipts in connection with the payment of Eknath's debts were produced and they are exhs. P-8 and P-9 dated March 22, 1945, and March 25, 1945, respectively. In the plaint, the plaintiffs merely stated that they had learnt that the debt due to Sitaram had been fully satisfied. In his evidence before the Court, the plaintiff Motiram stated that he had asked Sitaram creditor and he told him that his debts were satisfied. In his cross-examination, he stated that Sitaram did not show him any receipt, but he was told by Sitaram that Nathu paid him in 1944 although his last instalment was due on March 15, 1949. Curiously enough, Sitaram, the creditor, in his evidence stated that his debt from Nathu was satisfied partly by Nathu and Motiram, plaintiff No. 2; but Motiram himself made no claim that he had satisfied Sitaram's debt. Then in his cross-examination, Sitaram deposed that he had given a receipt to Motiram, though he does not remember the year, and he states that Motiram paid him only one instalment of Rs. 50. Then he stated that the first instalment was paid by Nathu, second by Motiram and the balance was paid to him by Nathu and he grave receipts. None of these receipts have been produced. He deposed that Chhotelal was present at the time of the last payment, but Chhotelal has not been examined. He stated that he did not remember the years of the payments or the interval between each payment. This evidence, in my opinion, is very unsatisfactory and it cannot be said that the plaintiffs had discharged the burden which lay on them to show that Sitaram's debts had been satisfied before the date of the sale-deed executed by Nathu in their favour. If it had been necessary for me to give a finding on this point, I would have been inclined to reject the plaintiffs' evidence on this point and to differ from the view of the learned trial Judge.
6. The result is that this appeal succeeds and the decree of the trial Court will he set aside and the plaintiffs' suit dismissed with costs throughout. The plaintiffs will be allowed to withdraw the money deposited by them, if any, under the decree.