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N.G. Venkatarathnam Vs. N.S. Nagendra Gupta - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberEx. Second Appeal No. 39 of 1977
Judge
Reported inAIR1979Kant83; ILR1979KAR646; 1979(1)KarLJ283
ActsKarnataka Debt Relief Act, 1976 - Sections 3, 4 and 8
AppellantN.G. Venkatarathnam
RespondentN.S. Nagendra Gupta
Excerpt:
.....as 'debt advanced' as contemplated under s. it is a well settled principle of law that while interpreting the act, the sections should be read together so as to make the meaning harmonious, each section shedding light on the interpretation of the other section. such a construction cannot be countenanced in a welfare legislation like the debt relief act. 9. it is well established that while interpreting a beneficial legislation, the rules laid down in heydon's case (1584) 3 co. that being so, i hold that the learned civil judge was perfectly justified in coming to the conclusion that the judgment-debtor has a right to raise the contention under the act. the affricated nagpur case clearly states at page 91 thus:.....several contentions. one of them was that he was a debtor within the meaning of the karnataka debt relief act, 1976, (hereafter referred to as the act) and that he was entitled to relief contemplated under s. 4 of the act. the learned munsiff disallowed that contention. the judgment-debtor went up in appeal before the learned civil judge, who on hearing the parties came to the conclusion that the decree amounted to a debt advanced within the meaning of the karnataka debt relief act, 1976 and in that view he allowed the appeal and remitted the case back to the learned munsiff with a direction that he should allow the judgment-debtor to raise the contention that he is a debtor under the act. aggrieved by the said order, the decree-holder has come up in appeal before this court. 3. the.....
Judgment:

1. This appeal is by the decree-holder and is directed against the judgment dated 10-1-1977 passed by the Second Additional Civil Judge, Bangalore City in Execution Appeal No. 60 of 1976 on his file allowing appeal instituted by the judgment-debtor, on setting aside the order passed by the Munsiff (Executing Court) on 7-10-1976 in Execution No. 406 of 1976, on his file.

2. The decree-holder sought execution of the decree obtained by him in O. S. No. 1676 of 1967 for Rupees 7,000/- with cost and interest against the judgment-debtor in Execution No. 406 of 1976 before the learned Munsiff. The judgment-debtor raised several contentions. One of them was that he was a debtor within the meaning of the Karnataka Debt Relief Act, 1976, (hereafter referred to as the Act) and that he was entitled to relief contemplated under S. 4 of the Act. The learned Munsiff disallowed that contention. The judgment-debtor went up in appeal before the learned Civil Judge, who on hearing the parties came to the conclusion that the decree amounted to a debt advanced within the meaning of the Karnataka Debt Relief Act, 1976 and in that view he allowed the appeal and remitted the case back to the learned Munsiff with a direction that he should allow the judgment-debtor to raise the contention that he is a debtor under the Act. Aggrieved by the said order, the decree-holder has come up in appeal before this Court.

3. The learned Advocate appearing for the appellant vehemently contended that the learned Civil Judge grievously erred in law in holding that the judgment-debtor could raise the contention contemplated under S. 4 of the Act. According to him, the decree amount could not be considered as a 'debt advanced' for the purpose of S. 4 of the Act. Further, if it amounted to a debt advanced, it fell, according to him, in the exception contemplated under S. 8(b) of the Act. As against this, the learned Advocate appearing for the judgment-debtor-respondent argued supporting the reasoning of the learned Civil Judge.

4. Thus, the appeal involves a short but, interesting point of law as to whether the present decretal amount could be termed as 'debt advanced' as contemplated under S. 4 of the Act.

5. It appears that the decree-holder and the judgment-debtor were partners of a firm. The firm was dissolved and while settling the account, it was agreed that the judgment-debtor should pay Rs. 7,001/- to the decree-holder and it is with regard to that amount, that a decree was obtained and the same was put into execution by the decree-holder. The learned Advocate appearing for the decree-holder submitted that the amount settled could not be treated as 'debt advanced' within the meaning of S. 4 of the Act. According to him, the word 'advance' meant 'lent'. Hence, he submitted that since the decree-holder did not lend this amount as such to the judgment-debtor, the same was not covered within the meaning of 'debt advanced' in S. 4 of the Act.

6. In order to interpret the words 'debt advanced' used in S. 4 of the Act, it is necessary to read the definition of the term 'debt' given in S. 3(b) of the Act. It reads:

''debt' means any liability in cash or in kind, whether decreed or not an includes any amount which is in substance a debt; but does not include arrears of taxes due to the Central or the State Government or a local authority.'

Then we have the relevant S. 4 which reads:

'Relief from indebtedness: Notwithstanding anything in any law for the time being in force or in any contract or instrument having force by virtue of any such law and save as otherwise expressly provided in this Act, with effect from the date of commencement of this section,-

(a) every debt advanced before the commencement of this section including the amount of interest,, if any, payable by the debtor to the creditor shall be deemed to be wholly discharged;................'

And then there is S. 8 which provides for exceptions, which reads:-

'Certain debts and liabilities not to be affected.-Nothing in this Act shall affect the following categories of debts and liabilities of small farmers, landless agricultural labourers and weaker sections of the people, namely:-

(a) any rent due in respect of any property let out to such debtor;

(b) any amount due under a hire-purchase agreement;

(c) any amount recoverable as arrears of land revenue;

(d) any liability arising out of breach of trust or any tortious liability;

(e) any liability in respect of wages or remuneration due as salary or otherwise for services rendered;

(f) any liability in respect of maintenance whether under a decree of a Court or otherwise:

(g) a debt due to-

(i) the Central Government or any State Government;

(ii) any local authority;

(iii) a credit agency as defined in the Karnataka Agricultural Credit Operations and Miscellaneous Provisions Act, 1974 (Karnataka Act No. 2 of 1975);

(iv) any Government company within the meaning of the Companies Act, 1956;

(v) the Life Insurance Corporation of India;

(vi) a Co-operative Society; and

(h) any debt which represents the price of goods purchased by such debtor.'

7. The learned Advocate appearing for the appellant earnestly invited my attention to the words in S. 4 (a):

'Every debt advanced before the commencement of this Section.'

He stressed the words 'debt advanced' and submitted that before a contention could be raised under S. 4 of the Act, the person must positively establish, prima facie, that the sum concerned was a 'debt advanced' and that unless it was a debt advanced, the judgment-debtor could not canvass for the application of S. 4 of the Act. As against this, the learned Advocate appearing for the judgment-debtor submitted that the term 'debt advanced; does not necessarily mean that it must be a loan advanced, but, that they include the wider category of debts as contemplated in S. 3(b) of the Act.

8. In order to appreciate the argument advanced and to construe the terms, it is necessary to read together the three Sections cited above. It is a well settled principle of law that while interpreting the Act, the Sections should be read together so as to make the meaning harmonious, each Section shedding light on the interpretation of the other Section. (Vide Madanlal v. Shree Changdeo Sugar Mills Ltd. : AIR1962SC1543 ). In the definition given under S. 3(b) as quoted above, the term 'debt' is given a very wide connotation. The definition is obviously given for the purposes of the Act and the relief given in the Act is contained in S. 4 of the Act. It is for discharge of the debt. Therefore, it could not be the intention of the legislature to restrict the meaning of the word 'debt' by using the words 'debt advanced' in S. 4 of the Act. The term 'debt' should be given the same meaning in S. 4 of the Act, in the context, as is defined in S. 3(b) of the Act. That becomes obvious after reading S. 8 of the Act which speaks of exceptions. Certain categories of debts are excepted. They include as stated above, rent due, liabilities towards wages, liabilities towards maintenance etc. If really, what is contemplated in S. 4 for the purpose of giving relief is only 'debt advanced' in the sense, money lent, there was no need to provide for the exceptions as stated above in S. 8 of the Act. Rent due by any stretch of imagination cannot be considered as loan advanced. Similarly, arrears of wages, arrears of maintenance etc. Therefore, that gives an insight or a peep into the legislative intention that the legislature has used the word 'debt' in S. 4, not with a restricted connotation as is now put forward by the learned counsel for the appellant but in its wider meaning as denied in S. 3(b) of the Act. The word 'advance' is defined in Concise Oxford Dictionary thus:

'advance, v. t. move or put forward, bring forward, also pay and lend'.

Thus the word has several meanings. That meaning which suits the context and which makes for harmonious meaning of the three Sections, quoted above, should obviously be preferred. If we take the meaning 'put forward', it suits the context and makes for harmonious reading of the three Sections. Instead, if we take the meaning of the word 'advance' as 'lent' it restricts the meaning of the word 'debt' and it conflicts with the definition of the term 'debt' and renders S. 8 of the Act otiose. Such a construction cannot be countenanced in a welfare legislation like the Debt Relief Act.

9. It is well established that while interpreting a beneficial legislation, the rules laid down in Heydon's case (1584) 3 Co. Rep 7a should be invoked. Maxwell on Interpretation of Statutes, 12th Edition, at page 40, explaining the case, has observed thus:

'The mischief rule: In Heydon's case, in 1584, it was resolved by the Barons of the Exchequer that 'for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things to be discerned and considered ; (1st). What was the common law before the making of the Act. (2nd). What was the mischief and defect for which the common law did not provide. (3rd). What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth, And, (4th). The true reason of the remedy; and then the Office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief and pro provide commando and to add force and life to the cure and remedy, according to the true intent of the makers of the Act pro bono publico.'

10. The Supreme Court of India has approved the rules laid down in Heydon's case in the case of Kanai Lal Sur v. Paramnidhi Sadhukhan : [1958]1SCR360 His Lordship, Justice Gajendragadkar, as he then was, of the Supreme Court rendering the judgment for the Bench has observed in para 6 of the judgment thus:

'In support of his argument, Mr. Chatterjee has naturally relied on the observations made by Barons of the Exchequer in Heydon's case (1584) 3 Co. Rep 7a. Indeed, these observations have so frequently cited with approval by Courts administering provisions of welfare enactments that they have now attained the status of a classic on the subject and their validity cannot be challenged.'

In Sheikh Gulfan v. Sant Kumar Ganguli : [1965]3SCR364 , the same Judge in para 19 of the judgment has observed thus:

'Normally, the words used in a statute have to be construed in their ordinary meaning; but in many cases, judicial approach finds that the simple devise of adopting the ordinary meaning of words does not meet the ends of fair and a reasonable constructions. Exclusive reliance on the bare dictionary meaning of words may not necessarily assist a proper construction of the statutory provision in which the words occur. Often enough, in interpreting a statutory provision, it becomes necessary to have regard to the subject-matter of the statute and the object which it is intended to achieve. That is why in deciding the true scope and effect of the relevant words in any statutory provision, the context in which the words occur, the object of the statute in which the provision is included, and the policy underlying the statute assume relevance and become material. As Halsbury has observed, the words 'should be construed in the light of their context rather than what may be either their strict etymological sense or their popular meaning apart from that context.'

11. Thus, while construing the provisions of the Act, it is necessary to bear in mind that the Act should be so construed as to advance the remedy and to suppress the mischief and not try to indulge in any intellectual hair splitting and legerdemain in interpreting the words with a view to maintain the mischief and hamper the remedy. The Act is meant for giving relief to the debtors and the word 'debtor' is defined in S. 3(c) of the Act. 'Debtor' means, (1) a small framer, (2) a landless agricultural labourer; (3) a person belonging to weaker sections of the people. Section 4 of the Act contemplates that debts of these people incurred before the commencement of this Section, be wholly discharged. Thus, it is obvious, that the purpose of the Act is the welfare of the weaker sections, viz., debtors as contemplated under S. 3 of the Act and while construing the relief, it is necessary to bear in mind, the intention of the legislature to give relief to these weaker sections as defined in S. 3(c) of the Act. Thus, considering the intendment of the legislation and the wordings used in S. 4 in the light of S. 3(b) and S. 8 of the Act. I have no hesitation to hold that the words 'debt advanced' in S. 4 of the Act, has wider connotation as given to it under S. 3 (b) of the Act, that they mean debt put forward and that it is not restricted only to loan advanced. That being so, I hold that the learned Civil Judge was perfectly justified in coming to the conclusion that the judgment-debtor has a right to raise the contention under the Act. Whether he would ultimately prove that he is a debtor within the meaning of S. 3 (c) of the Act, is a question of fact which the learned Munsiff has to decide.

12. It is also relevant in this context to refer to another argument advanced by the learned counsel for the appellant. He submitted that even if the term 'debt advanced' in S. 4 is wide enough to mean as debt put forward, the debt in question comes within the scope of exception under S. 8(h) of the Act. Section 8 (b) as quoted above, refers to any debt which represents price of goods purchased by such debtor. The learned counsel argued relying on the decision of the Nagpur High Court in the case Sahebram Surajmal v. Purushottamlal Gopikishan (AIR 1950 Nag 89), that interest of the partner in a partnership represents price of goods purchased and as such, the debt in the instant case, fell within the meaning of Exception of S. 8 (b) of the Act. This submission was resisted by the learned counsel appearing for the other side inviting my attention that the decree obtained in this case was for a liquidated sum settled after the dissolution of the partnership and as such, this cannot be termed as sale of a partner's interest in the partnership firm. The affricated Nagpur case clearly states at page 91 thus:

' The interest of a partner in the partnership is certainly not a claim to a debt as a 'debt' is an obligation to pay a liquidated (or specified) sum of money, Webster v. Webster (1862) 31 Beav. 393'. There cannot be any dispute about the proposition of law so laid down. But, in the instant case, it is not the interest of a partner in a partnership firm with which we are concerned, but, it is the liquidated sum which is settled to be paid by the judgment-debtor after the dissolution of the partnership. The very ruling of the Nagpur High Court, cited above, makes it clear that a liquidated (or specified) sum becomes debt. In the circumstances, the contention of the learned counsel that the sum does not become a debt, because, it is a sale of partnership interest, cannot be upheld. As pointed above, the sum represents debts due and not an unliquidated interest of a partner in the firm.

13. In the result, the appeal is dismissed as devoid of merits. No costs.

14. Appeal dismissed.


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