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Sogamall Peeraji Oswal Vs. Hirabai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberC.R.P. No. 3045 of 1978
Judge
Reported inILR1985KAR3018
ActsKarnataka Debt Relief Act, 1976 - Sections 3, 4 and 8
AppellantSogamall Peeraji Oswal
RespondentHirabai
Appellant AdvocateGotkindi, Adv. for ;B.V. Deshpande, Adv.
Respondent AdvocateAjit J. Gunjal, Adv.
DispositionRevision allowed
Excerpt:
karnataka debt relief act, 1976 (karnataka act no. 25 of 1976) - section 3(b) -- debt advanced -- connotation -- decree for refund of amount advanced under agreement to sell not debt under the act.;in order to constitute a transaction a debt, it should amount to a liability in cash or kind. when the decree holders gave an advance to the judgment-debtor while entering into an agreement to sell, it was not a liability at all. the amount was paid towards part performance of purchase money itself. therefore, it cannot be considered to be a liability when the transaction was entered into or even when the suit was filed for specific performance or even when the decree was passed by the appellate court for the refund of money to the decree holders by the judgment debtor. further..........which they claim relief is and the liability the discharge of which they seek arises out of a 'debt advanced', these two conditions must co-exist'.in the said case, the question was whether the costs awarded in that suit would amount to a debt within the meaning of 1976 act. it was held by the division bench of this court in the said case that the costs did not amount to a debt within the meaning of act of 1976.8. the learned counsel sri ajit j. gunjal quoted before me the decision in venkatarathnam n.g. -v.-n. s. nagendra gupta, ilr (karnataka) 1979 (1) 646 - 1979 (1) klj 283. the facts in the said case were :the judgment debtor and decree-holder were partners in a firm and while settling accounts on dissolution, judgment - debtor had to pay rs. 7001/-, in respect of whicha decree.....
Judgment:
ORDER

Kulkarni, J.

1. The Decree holders filed a suit in O.S. No. 31/1973 on the file of the Munsiff, Muddebihal, for specific performance of an agreement to sell entered into by the judgment-debtor. The said agreement to sell was dated 16-7-1970. The Munsiff, decreed the suit for specific performance. The judgment-debtor filed an appeal. The Appellate Court modified the decree by refusing to grant specific performance but it onlyawarded the refund of the amount paid under the agreement. The Appellate Court passed a decree on 19-3-1977. The decree-holders sued out the execution to recover Rs. 12,501-75, in pursuance of the decree passed by the Appellate Court.

2. The Judgment-debtor raised a contention that she was a debtor within the meaning of the Karnataka Debt Relief Act, 1976 (hereinafter referred to as the Act of 76) and that the amount in question amounted to a debt within the meaning of the Act of 1976 and therefore under Section 4 of the Act of 1976 the said debt stood discharged and that she was not liable to pay the amount in question and thus she prayed for the dismissal of the execution.

3. In the Trial Court, a memo was filed by the Counsel for the decree holders that the judgment debtor is a person belonging to the weaker sections of the society having an income of less than Rs. 2400/- per year. But what was objected to by the decree holder was that, the amount in question did not amount to a debt within the meaning of the Act of 1976.

4. The only question that now remains to be considered is whether the amount for which the decree is passed would amount to a debt within the meaning of the Act of 1976.

5. As already stated above, the decree holders who had filed a suit for specific performance of the agreement to sell entered into by the judgment-debtor, ultimately got only a decree for the refund of the amount of advance made by them to the judgment-debtor under that agreement itself.

6. The word 'debt' has been defined by Section 3(b) of the Act of 1976:

'Debt' means any liability in cash or in kind, whether decreed or not and 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.'

Section 8 of the Act of 1976 enumerates the various categories which do not come within the ambit of the word 'debt'. Those exceptions are:

'(a) any real due in respect of any properly 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 tortuous 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 courtor 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

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

The Learned Counsel Gotkhindi for the Revision Petitioners decree holders submitted that the present amount decreed would come within the ambit of Section 8(d) of the Act of 1976 which reads as 'any liability arising out of breach of trust or any tortuous liability'. A decree has been passed in this case in favour of the decree holders only for the refund of the amount advanced by the decree holders to thejudgment-debtor under the agreement to sell. Therefore, there is no question of breach of trust at all in this case. Thereis no tortuous liability at all. So his argument that the amount decreed would come within Section 8(d) of the Act of 1976 does not appear to be correct.

7. The Learned Counsel Sri Gotkhindi relied on a decision in Ganesh Bisto Desai -v.- Nagesh Bisto Desai, 1977 (2) KLJ. 476. It was held in that said case by Govind Bhat, CJ and Venkatachaliah, J. as:

'To be entitled to relief under the Act, the claimants must show that two conditions coalesce. The first is that they must show that they are debtors by the statutory standards. Secondly, they must show that the transaction respecting which they claim relief is and the liability the discharge of which they seek arises out of a 'debt advanced', these two conditions must co-exist'.

In the said case, the question was whether the costs awarded in that suit would amount to a debt within the meaning of 1976 Act. It was held by the Division Bench of this Court in the said case that the costs did not amount to a debt within the meaning of Act of 1976.

8. The Learned Counsel Sri Ajit J. Gunjal quoted before me the decision in Venkatarathnam N.G. -v.-N. S. Nagendra Gupta, ILR (Karnataka) 1979 (1) 646 - 1979 (1) KLJ 283. The facts in the said case were :

The Judgment debtor and decree-holder were partners in a firm and while settling accounts on dissolution, judgment - debtor had to pay Rs. 7001/-, in respect of whicha decree was obtained and put in execution.

Held, the decretal amount was a debt advanced within Section 4 of the Act and the judgment-debtor could claim the benefit of the Act.

It has been held in that case thus :

'Thus, while construing the provisions of the present 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. TheAct is meant for giving relief to the debtors and the word 'debtor' is defined in Section 3(c) of the Act. 'Debtor' means, (1) a small farmer, (2) a landless agriculturallabourer ; (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 Section 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 Section 3(c) of the Act. Thus, considering the intendment of the legislation and the wordings used in Section 4 in the light of Section 3(b) and Section 8 of the Act. I have no hesitation to hold that the words 'Debt' advanced in Section 4 of the Act, has wider connotation as given to it under Section 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 Section 3(c) of the Act, is a question of fact which the learned Munsiff has to decide.'

In the said Venkatarathnam's case, the Division Bench ruling reported in 1977 (2) KLJ 476 has not been considered at all. However, there is a conflict between the decision rendered by Single Judge and decision rendered by the Division Bench. The ruling of the Division Bench must prevail over the decision rendered by the Single Judge.

9. The definition of the word 'debt' given in Section 3(b) of the Act of 1976 means any liability in cash or kind,whether decreed or not and includes any amount which is in substance a debt. So in order to constitute a transaction a debt, it should amount to a liability in cash or kind. When the decree holders gave an advance to the judgment-debtor while entering into an agreement to sell, it was not a liability at all. The amount was paid towards part performance of purchase money itself. Therefore, it cannot be considered to be a liability when the transaction was entered into or even when the suit was filed for specificperformance or even when the decree was passed by the Appellate Court for the refund of money to the decree holders by the judgment-debtor. Further the definition of the word 'debt' requires that the amount should be in substance a debt. It cannot be said that the amount advanced under an agreement to sell would partake the character of a debt when it was advanced. Therefore, it cannot be said to be in substance a debt. Further Section 4 of the Act of 1976 which gives relief to the debtors from indebtedness reads as :-

'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.'

The stress is on the word `advance.' The amount should be advanced as a debt. If it is not advanced as a debt, then the transaction would not amount to a debt at all. The word `advanced' came to be interpreted by Sabhahit, J. in the said Venkatarathanam's case as 'put-forward'. In the case of money transaction, the question of putting forward or moving forward does not arise. The dictionary gives the meaning of the word advance as move or bring forward. It only refers to the movements of person or an animal. It does not relate to any money transaction at all. If we were to take into consideration the usual words adopted in Courts to the effect that a lawyer advanced an argument, it only means that the lawyer put forward the arguments. There-fore, the meaning of the word `advance' when it applied to non-money transactions may mean move or put forward.

But when it applies to a money transaction it only means either to pay or lend. The said interpretation put by Sabhahit, J. runs contrary to the Division Bench ruling. Therefore, under these circumstances, the decree passed for the refund of the advance amount will not amount to a debt within the meaning of Section 3(b) read with Section 4 and Section 8 of the Act of 1976. Therefore, under these circum-stances, the order passed by the Court below holding that it amounted to a debt within the meaning of Act of 1976, cannot be sustained.

10. The decree holders themselves have conceded by filing a memo that the judgment- debtor belongs to weaker section of the society and her income does not exceed Rs. 2400/- per year. It may sound unfortunate that such a poor lady is required to pay huge amount of Rs. 12501-75. It may look pitiable. But, however it is for the decree holders to take a sympathetic view in the matter. But this Court is only to interpret the law as it stands. Therefore, under these circumstances, the order passed by the Court belowdismissing the execution case is set aside. The revision is allowed.


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