1. This second appeal gives rise to a short but interesting question as to whether a preliminary decree for dissolution of partnership and for partnership accounts amounts to a 'debt' within the meaning of Section 43 of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (No. I of 1951).
2. The facts are not in dispute. The appellant was the plaintiff in Civil Suit No. 124-A of 1948. The suit was a suit for dissolution of partnership between the plaintiff and the two defendants. The plaintiff also claimed the usual decree for rendition of accounts. As a result of the preliminary decree, however, it was the appellant-plaintiff who was found liable to render account.
3. The preliminary decree was passed on March 18, 1950. Thereafter, the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, came into force as from April 1, 1951. Next, proceedings for making the preliminary decree final were taken and a final decree was passed on January 15, 1952. By the final decree, the appellant (plaintiff) was made liable to pay to defendant No. 1 Rs. 14,611-2-0. A separate decree was passed against the plaintiff in respect of defendant No. 2, but with that part of the decree we are not here concerned. Defendant No. 1 thereafter assigned his rights under the decree to the respondent Chaturbhuj for a consideration of Rs. 12,000. On November 27, 1952, in execution of the decree, the respondent Chaturbhuj attached certain sir fields belonging to the appellant and the appellant took objection to the attachment on the ground that the debt having been incurred before the coming into force of the Act, it could not be executed against the sir fields. The first Court upheld the objection but the lower appellate Court has, in appeal, reversed the decision and the judgment-debtor appeals.
4. Section 43 of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, runs as follows :-
Any land which immediately before the date of vesting, was held in absolute occupancy or occupancy right or recorded as Sir land, shall not be liable to attachment or sale in execution of a decree or order for the recovery of any debt incurred before the date of vesting except where such debt was validly secured by mortgage of or a charge on the absolute occupancy or occupancy land or the cultivating right in the sir land.
5. On behalf of the appellant Mr. G.R. Mudholkar submits that the important words are the word 'any' which precedes the word 'debt' and the word 'incurred' which succeeds it, and he says that the question to be decided is when was this debt 'incurred'. It may be that it became payable after the date of the final decree, but there is no doubt that the liability was 'incurred' at least on the date of the preliminary decree, if not before and, therefore, the appellant's lands could not be attached. He also emphasises that the expression used is not 'a debt' but 'any debt' and that would include even debts arising as a result of a decree.
6. It seems to me, however, that the crucial word in the clause in dispute is the word 'debt'. In the Act, the word 'debt' is nowhere denned. In Section 17, no doubt, the word 'secured debt' is defined, but that expression cannot help to construe the word 'debt' simpliciter. But even in Section 17 'decretal debts' and the 'excluded debts' are not included. At least, so far as 'secured debts' are concerned, it is clear that decretal debts are not included.
7. We are thus remitted to the ordinary connotation of the word. The word 'debt' is defined in Wharton's Law Lexicon to mean 'a sum of money due from one person to another'. Stroud, in his Judicial Dictionary, defines it as 'a sum payable in respect of a liquidated money demand, recoverable by action'. The essence of the word is that the amount must be an ascertained or liquidated sum of money which a party is liable to pay. In the instant case, all that was done, when the preliminary decree was passed, was that it was declared under Order XX, Rule 15, of the Code of Civil Procedure that the partnership between the plaintiff and the defendants was to stand dissolved from a certain date, that the plaintiff was to render all accounts and the decree directed that such accounts be taken. On that date it was impossible for any of the parties to the litigation to have said that any amount was due to or recoverable from one by the other. On the other hand, it was completely in doubt as to which of the parties was to pay to the other until the final decree was passed on January 15, 1952. Therefore, in my opinion, the liability, whatever it was, did not become a debt till the final decree was passed on January 15, 1952. Thus the debt was incurred after the coming into force of the Act and the bar against attachment created by Section 43 will not be available to the appellant.
8. The view, which I have taken, is supported in some measure by the decision of a division bench of the Nagpur High Court in Mohammad Hasan Khan v. Ahmad Hafiz Khan. (1955) Miscellaneous Appeal No. 117 of 1952, decided by Kaushlendra and Bhutt JJ., on March 24, 1956 (Unrep.). In para. 14 of the judgment, the division bench observed as follows:-
The term 'debt' has not been defined in the Act, but 'evidently it is independent of the liability created by the decree itself. In the absence of any specific definition, it as to be given the ordinary connotation of a loan which, as commonly understood, is an Mteance of money or in kind at interest. The normal connotation of the word 'debt' does not include a claim for damages but a liquidated money demand. (Jones v. Thompson 120 E.R. 430) and Ex-parte Charles 104 E.R. 576.
9. The view I have taken is also borne out by another consideration, namely, what is the true relation of partners to each other. A partner is not merely entitled to rights against his co-partner but he is also under correlative obligations. One of these obligations is to account to his partners in respect of his dealings with the partnership assets. The liability is thus stated in Halsbury's Laws of England, Vol. XXIV, at page 481:
Partners are not, as regards partnership dealings, considered as debtor and creditor inter se until the concern is wound up or until there is a binding settlement of the accounts. It follows that one partner has no right of action against another for the balance owing to him until after final settlement of the accounts.
That being so, it seems to me that the liability of the appellant in the present case did not become a debt until the binding settlement of accounts took place by the final decree. It was only then that the relationship of debtor and creditor arose between the erstwhile partners. It is on that date, therefore, that the debt was incurred within the meaning of Section 43. The decision of the lower appellate Court is upheld.
10. The appeal fails and is dismissed with costs.