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SebastIn Antony and anr. Vs. Rawananda Bhatta and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKarnataka High Court
Decided On
Case NumberEx. Second Appeal No. 53 of 1977
Judge
Reported inAIR1982Kant73; ILR1981KAR1363; 1981(2)KarLJ409
ActsKarnataka Debt Relief Act, 1976 - Sections 6(2), 7 and 15(1); ;Evidence Act, 1872 - Sections 101; Karnataka Debt Relief (Amendment ) Act, 1980 - Sections 6(2)
AppellantSebastIn Antony and anr.
RespondentRawananda Bhatta and anr.
Appellant AdvocatePadubidri Raghavendra Rao, Adv.
Respondent AdvocateM. Gopalakrishna Shetty, Adv.
Excerpt:
.....act, 24 of 1973. they further contended that they are 'debtors' within the meaning of the karnataka debtors protection act of 1975, which had come into force on 23-9-1975. the case was fixed for hearing on 28-8-1976 and the learned counsel appearing for the debtors submitted that he bad no oral evidence to lead. 29 of 1980 would not be applicable to the present case and, since opportunity was given to the judgment-debtors by the executing court to adduce evidence and the judgment-debtors failed to adduce any evidence, there was no denial of opportunity and, as such, there is no occasion to remand the case. ' 10. thus, it is clearly stated in the section that the creditor must show that the debtor is not entitled to protection under the said act. enactments dealing with these..........fund co. (pvt.) v. b. k. marappa gow4a (ilr (1981) 1 kant 233), that the karnataka agricultural debtors relief act, 1966, applies only to the debts, which were in existence on the date of the application of the act, i.e., on 1-4-1969. for similar reasons, the other two acts viz., act no. 25 of 1976 and act no. 29 of 1980, are applicable to the debts which were in existence on the dates on which these two acts came into force. therefore, there was no necessity for the legislature to repeal act no. 25 of 1976 when it enacted act no. 29 of 1980.30. in fact, while l. a. bill no. 9 of 1980 regarding the karnataka debt relief act was introduced in the legislature, the statement of objects and reasons presented, states inter alia thus :'after issue of karnataka debt relief act, 1976, many.....
Judgment:

1. This appeal by the judgment-debtors I and 2 is directed against the order dated 29-3-1977 passed by the Civil Judge, Udupi, dismissing their appeal, on confirming the order dated 13-10-1976 passed by the Principal Munsiff, Udupi, in Execution Case No. 124 of 1971, on his file.

2. The decree-holder filed an application for execution of the mortgage decree passed in original Suit No. 220 of 1965 in his favour, since the amount was not paid, at No. 124 of 1971. The second judgment debtor contended that in view of the application of the Karnataka Agricultural Land Ordinance, 1973, the decree could not be executed since the mortgaged lands were agricultural holdings. The learned Munsiff, however, held that since Maharashtra Apex Corporation had obtained a mortgage decree already in respect of these properties against the same judgment-debtors, the present decree was hit by the doctrine of lis pendens and, hence, the properties could not be sold in execution of that decree and, in that view, dismissed the execution petition. The decree-holder filed Execution Appeal No. 7 of 1973 against that order before the Civil Judge, Udupi. The learned Civil Judge, after hearing the appeal, allowed the appeal holding that the doctrine of lis pendens did not apply and directed the execution to proceed, by his order dated 23-3-1974. Aggrieved by the said order, the judgment-debtors filed Execution Second Appeal No. 61 of 1974, which came to be dismissed by this Court on 6-11-1975.

3. Thereafter, the decree-holder took out execution in the Executing Court. Again the judgment-debtors filed objections contending that the sale was prohibited under Section 4 of the Karnataka Agricultural Lands Prohibition of Alienation Act, 24 of 1973. They further contended that they are 'debtors' within the meaning of the Karnataka Debtors Protection Act of 1975, which had come into force on 23-9-1975. The case was fixed for hearing on 28-8-1976 and the learned counsel appearing for the debtors submitted that he bad no oral evidence to lead. The decree-holder also did not examine any witness. After hearing the arguments, the learned Munsiff overruled both the objections raised by the judgment-debtors and ordered that the execution shall proceed, on 13-10-1976 and that order was challenged before the Civil Judge, Udupi, in Execution Appeal No. 11 of 1976. The learned Civil Judge, on hearing the learned counsel, dismissed the appeal by his order-dated 29-3-1977. He confirmed the order of the learned Munsiff. Aggrieved by the said order of the learned Civil Judge, the judgment debtors I and 2 have instituted the above second appeal before this Court.

4. The learned Advocate Sri Padubidri Raghavendra Rao, appearing for the appellants, strenuously urged before me that in view of the ambiguous wording of Section 7 of the Karnataka Debt Relief Act, 1976, the judgment-debtors did not adduce any evidence before the Executing Court and that therefore, an opportunity should be given to them to adduce evidence by remanding the caw. Alternatively, he submitted that the Karnataka Debt Relief Act of 1980 (Act No. 29 of 1980) has come into force on 15-11-1979 and, as such, Section 6 of the Act would now apply in the matter of burden of proof and, as such, the appeal should be allowed and the case remanded to the Executing court.

5. As against that, Shri M. Gopalakrishna Setty, the learned counsel appearing for the decree-holder, submitted that the provisions of Act No. 29 of 1980 would not be applicable to the present case and, since opportunity was given to the judgment-debtors by the Executing Court to adduce evidence and the judgment-debtors failed to adduce any evidence, there was no denial of opportunity and, as such, there is no occasion to remand the case.

6. The points therefore, that arise for my consideration in this appeal are:

(1) Whether there is substance in the submission that no opportunity was given by the Executing Court to the judgment-debtor to adduce evidence?

(2) Whether there is substance in the submission that the judgment-debtors were confused by the wording of S. 7 of Act No. 25 of 1976?

(3) Whether the provisions made in Section 6(2) of Act No. 29 of 1980 are applicable to the facts of the case?

7. There is no dispute that the decree holder put into execution a mortgage decree obtained by him in Original Suit No. 220 of 1965. As stated above, the judgment-debtors raised two contentions- one based on prohibition of alienation under the Karnataka Agricultural Lands Prohibition of Alienation Act of 1973 and the other that they were 'debtors' under the Karnataka Debt Relief Act, 1976. Both the contentions were rejected by the learned Civil Judge and d3z- learned counsel appearing for the appellants before me contended that became of the ambiguous wording of S. 7 of Act No. 25 of 1976, the judgment-debtors were confused and they did not adduce any evidence.

8. The learned Civil Judge has made it clear in the course of his order that in spite of the opportunity given to the judgment debtors, they did not adduce evidence and that the learned counsel appearing for the judgment-debtors submitted before the Executing Court that he had no evidence to adduce.

9. Section 7 of Act No. 25 of 1976 states-:

'Burden of proof - notwithstanding anything in any law, in any suit or proceeding, the burden of proving that the debtor is not entitled to protection of this Act shall lie on the creditor.'

10. Thus, it is clearly stated in the section that the creditor must show that the debtor is not entitled to protection under the said Act. In other words, it is obvious that before resorting to that section, the debtor must show that he is a debtor as defined is the Act to claim the benefits under the Act Accordingly, in the execution proceeding two points were raised by the learned Munsiff. They are:

(1) Do judgment-debtors prove that they are 'debtors under the Act? and

(2) If so, are they entitled to the protection under the Act?

11. Thus, the, very first point throws the burden of Proof that they are debtors under the Act, on the judgment-debtors. Hence there was absolutely no scope for confusion. It is having understood that the burden of proof was placed on The Judgment-debtor that the learned counsel appearing on their behalf submitted that he had no evidence to adduce in the matter. That being so, there is no substance in the submission made before me by the learned counsel appearing for the appellants that the judgment-debtors were confused and, as such, they did not have proper opportunity to adduce evidence.

12. The learned counsel appearing for the appellants next submitted that Act No. 29 of 1980 has come into force on 15-11-1979 and that therein the provision regarding burden of proof is specific and it is changed. Hence, he submitted that the said provision should be made applicable to the present pending proceeding.

13. Section 6 of Act No. 29 of 1980 reads -

'Burden of proof, etc: - (1) If in any suit or other proceeding in a Court a question arises whether a party thereto is a debtor under this Act, the Court trying the suit or other proceeding shall frame a preliminary issue as to whether such person is not a debtor under this Act and shall decide it before other issues are considered.

(2) Notwithstanding anything in any law, the burden of proving that a person is not a debtor under this Act shall lie on the creditor.'

14. Thus, it is true that sub-section (2) of Section 6 of 1980 Act throws the burden on the creditor to show that the person contending that he is a debtor under the Act is not a debtor.

15. The real point of controversy, however, is whether this provision can be made applicable to a proceeding pending under Act No. 25 of 1976.

16. The learned counsel appearing for the appellants -no doubt submitted that Section 6 (2) of Act No. 29 of 1980 provides for procedure and procedural law is retrospective in effect and, as such, it applies to pending proceedings also.

17. It is true that no person has a vested right in procedure and that when a change is made in procedure, it takes retrospective effect.

18. 'Craies on Statute Law', (VII Edn.) speaking on this aspect at page 401, under the rubric 'Pending actions' affected by new procedure or provision as to costs, states:

'But there is no vested right in procedure or costs. Enactments dealing with these subjects apply to pending actions, unless a contrary intention is expressed or clearly implied. It is a general rule that when the legislature alters the rights of parties by taking away or conferring any right of action its enactments, unless in express terms they apply to pending actions, do not affect them. But there is an exception to this rule, namely, where enactments merely affect procedure and do not extend to rights of action. For, it is perfectly settled that if the legislature forms a new procedure, that, instead of proceeding in this form or that, you should proceed in another and a different way, clearly there, bygone transactions are to be sued for and enforced according to the new form of procedure. Alterations in the form of procedure are always retrospective, unless there is some good reason of other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties, it will be held to apply prima facie to all actions, pending as well as future.'

19. The learned counsel appearing for the other side, however, pointed out that what is contained in S. 6 (2) of Act No. 29 of 1980 is not merely procedural but that it creates an obligation on the part of the creditor and gives a relief to the debtor.

20. It is true that even in a Code containing adjectival law like the Code of Civil Procedure, there may be provisions providing for substantive rights. So, for example, the Code of Civil Procedure provides for a right of appeal, which is a substantive right.

21. It is, therefore, necessary to find out whether what is contained in S. 6 (2) of Act No. 29 of 1980 speaks of merely procedure or provides for something more.

22. 'Salmond on jurisprudence, (12th Edition), speaking on substantive law and law of procedure, states at p. 461 thus:

'Although the distinction between substantive law and procedure is sharply drawn in theory, there are many rules of procedure which, in their practical operation, am wholly or substantially equivalent to rules of substantive law. In such cases the difference between these two branches of law is one of form rather than of substance. A rule be longing to one department may by a change of form 'pass over into the other without materially affecting the practical issue, In legal history such transactions are frequent, and in legal theory they are ' without interest and importance.'

Hence, the learned Author opines that to define procedure as concerned not with rights, but with remedies, is to confound Vic, remedy with the process by which it is made available.

23. The normal law of procedure no doubt lies down, under S. lot of the Evidence Act, that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist and, when a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.

24. Normally, therefore when a debtor claims relief under Act No. 25 of 1976, it is for him to prove that he is a 'debtor' under the rules of procedure. But, S. 6 (2) of Act No. 29 of 1980 makes a departure. 'It states that notwithstanding anything in any law, the burden of proving that a person is not a debtor under the Act shall lie on the creditor.

25. Thus, it is obvious that it contains not merely the general rule of procedure but it creates an obligation on the part of the creditor to prove that the debtor who pleads that he is a debtor under Act No. 29 of 1980 is not a debtor under the said Act. Hence, I am persuaded to hold that S. 6 (2) of Act No. 29 of 1980 does not enact merely for, procedure but it creates an obligation and, as such, it cannot be described as a provision merely providing for procedure. That being so, the normal rule that procedure is retrospective, cannot be invoked, for applying the provision made under S. 6 (2) of Act No. 29 of 1980 to a pending proceeding. Hence, I hold that it is only prospective in operation and not retrospective in operation.

26. There is one more reason why I hold so, S. 15 of Act No. 29 of 1980 provides for savings. Section 15 (1) of the said Act reads:

'Nothing contained in this Act shall affect or shall, be deemed to affect in any way the operation of the Karnataka Debt Relief Act, 1976 (Karnataka Act No. 25 of 1976).'

27. 'Crawford on Statutory Construction', (1940 Edition) at page 612 in para 300, speaks of saving clauses. It is observed therein thus it is generally used in repealing statutes in order to prevent them from affecting rights accrued, penalties incurred, duties imposed, or proceedings started under the statute sought to be repealed. Its position or verbal form is unimportant. But if it is in irreconcilable conflict with the body of the statute of which it is a part, it is ineffective, or void. And whether the saving clause should receive a strict or liberal construction, is a matter upon which there seems to be some conflict of opinion. Perhaps the best rule would make the nature of the construction of the saving clause depend upon the nature of the statute involved- for example, whether it was remedial, penal, or procedural.99

28. It may be mentioned in this context that in our State three main legislations are in operation with regard to debt relief. The first one is the Karnataka Agricultural Dek ors Relief Act, 1966, which came into force on 1-4-1969. The second Act is the Karnataka Debt Relief Act, 1976, Ss. 3, 4, 7 and 8 of which came into force on 21-10-1975. Then, we have the. Karnataka Debt Relief Act, i980 that is deemed to have come into force on 15-11-1979.

29. It is laid down by this Court in the case of Sri Mahadeva Chit Fund Co. (Pvt.) v. B. K. Marappa Gow4a (ILR (1981) 1 Kant 233), that the Karnataka Agricultural Debtors Relief Act, 1966, applies only to the debts, which were in existence on the date of the application of the Act, i.e., on 1-4-1969. For similar reasons, the other two Acts viz., Act No. 25 of 1976 and Act No. 29 of 1980, are applicable to the debts which were in existence on the dates on which these two Acts came into force. Therefore, there was no necessity for the Legislature to repeal Act No. 25 of 1976 when it enacted Act No. 29 of 1980.

30. In fact, while L. A. Bill No. 9 of 1980 regarding the Karnataka Debt Relief Act was introduced in the Legislature, the Statement of Objects and Reasons presented, states inter alia thus :

'After issue of Karnataka Debt Relief Act, 1976, many representations were received from the people suggesting inter alia the following:

(i) Orders issued by Sub-Divisional Magistrate should be made appealable to the Judiciary.

(ii) To clear off the debtors who have taken loans 5 to 10 years before the coming of this Act into force. xx xx xx xx

31. Thus, it is obvious that the Legislature wanted to give relief to such debtors who incurred loans after the coming into force of the1976 Act and for such debts, which were in existence on the date of the application of Act No. 29 of 1980.

32. Thus, as stated above, S. 15 (1) of Act No. 29 of 1980 specifically saves the operation of Act No. 25 of 1976 in all respects, That does not mean that if a contending debtor is held not a debtor under Act No. 25 of 1976 and if his debts are existing on the, date of the commencement of Act No. 29 of 1980, he is disabled to apply for relief under Act No. 29 of 1980. If he otherwise satisfies the conditions stipulated in Act No. 29 of 1980, be would be at liberty to seek relief under Act No. 29 of 1980 because all that is necessary for the application of the provisions of Act No. 29 of 1980 would be that the debt should be existing on the date of the commencement of the said Act and the debtor must satisfy the conditions stipulated in the said Act.

33. In the circumstances, therefore, I am constrained to hold that there is no substance in the contention raised before me that in the present pending case; the provisions contemplated in S. 6 (2) of Act No. 29 of 1980 should be applied. If at all the judgment debtors seek to get the relief under Act No. 29 of 1980, it is up to them to move the Executing Court in that behalf to consider the same and merits.

34. In the result, therefore, the appeal fails and is dismissed as devoid of merits.

35. No costs.

36. Appeal dismissed.


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