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Bishwa Nath Gupta Vs. Basdeomal Jogdhian - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberCivil Rev. No. 725 of 1956
Judge
Reported inAIR1960All68
ActsDebt Law; Displaced Persons (Debts Adjustment) Act, 1951 - Sections 4, 5, 9 and 15; Code of Civil Procedure (CPC) , 1908 - Sections 9
AppellantBishwa Nath Gupta
RespondentBasdeomal Jogdhian
Appellant AdvocateS.N. Misra, Adv.
Respondent AdvocateB.L. Gupta, Adv.
DispositionRevision allowed
Excerpt:
civil - jurisdiction of civil court - sections 5, 15 and 9 of displaced persons (debts adjustment) act, 1951 - civil court not empowered to decide whether applicant under section 5 is a displaced debtor or not - right forum under section 15 is the tribunal. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted..........matter in dispute was not covered by the definition of 'debt' under section 2(6) of the displaced persons (debts adjustment) act, no. lxx of 1951, and in refusing to stay the proceedings in the suit under section 15 of the act. 2. the facts which gave rise to this revision may be briefly stated. messrs. basdeomal jogdhian instituted suit no. 518 of 1951 against bishwanath gupta and brindaban gupta on the 12th of september, 1951, in the court of the munsif of dehradun for dissolution of partnership and for accounts. the suit was defended by bishwanath gupta alone. during the pendency of the suit bishwanath gupta made an application under section 5 of the displaced persons (debts adjustment) act of 1951 before the tribunal constituted under that act at delhi for the adjustment of his.....
Judgment:

D.K. Roy, J.

1. This revision came up before one of us, but, having regard to the importance of the question involved in it, it was referred to a Bench for decision. Shortly put, the question which has been raised in at is whether the Munsif acted illegally and with material irregularity in coming to the conclusion that the matter in dispute was not covered by the definition of 'debt' under Section 2(6) of the Displaced Persons (Debts Adjustment) Act, No. LXX of 1951, and in refusing to stay the proceedings in the suit under Section 15 of the Act.

2. The facts which gave rise to this revision may be briefly stated. Messrs. Basdeomal Jogdhian instituted suit No. 518 of 1951 against Bishwanath Gupta and Brindaban Gupta on the 12th of September, 1951, in the court of the Munsif of Dehradun for dissolution of partnership and for accounts. The suit was defended by Bishwanath Gupta alone. During the pendency of the suit Bishwanath Gupta made an application under Section 5 of the Displaced Persons (Debts Adjustment) Act of 1951 before the Tribunal constituted under that Act at Delhi for the adjustment of his debts, alleging himself to be a displaced debtor.

The Tribunal at Delhi informed the Munsif of Dehradun that such an application had been filed and it asked the Munsif to stay further proceedings before him as enjoined under Section 15 of the Act. The Tribunal further asked that the necessary papers relating to the claim may be transferred to the Tribunal as provided under the Act. On the 25th of July, 1955, the Munsif passed an interim stay order in term of Section 15, but in a subsequent order dated the 10th of September, 1955, which is the subject matter of this revision, the Munsif came to the conclusion that the claim was clearly not a 'debt' as defined in the Act and consequently Section 15 shall have no application to the case. The Munsif, therefore, vacated the interim order of stay and refused to transfer the record to the Tribunal at Delhi, and directed the suit to proceed.

3. Two questions have been argued before us. Firstly, that the point whether the subject matter of this suit was or was not a 'debt' as defined under the Act, was not, open to the Munsif to decide and that the determination of that question lay within the exclusive jurisdiction of the Tribunal. Secondly, that as soon as an application was made under Section 5 of the Act the consequences enunciated in Section 15 ensued and all proceedings pending in any civil court in respect of any debt to which the displaced debtor was subject at the date of the said application had, of necessity, to be stayed and the records of the proceedings were required to be transferred to the Tribunal.

4. In order to appreciate the questions stated above, certain provisions of the Displaced Persons (Debts Adjustment) Act of 1951 have got to be stated.

5. The preamble of the Act shows that it was designed to make certain provisions for the adjustment and settlement of debts due by displaced persons, for the recovery of certain debts due to them and for matters connected therewith or incidental thereto.

6. By Section 1, Sub-section (3), read with the Notification made by the Central Government, the Act came into force in the States of Delhi, Ajmer, Uttar Pradesh and Bombay on the 10th of December, 1951.

7. By Section 2, Sub-section (6) of the Act, 'debt' has been defined as follows:

'(6) 'debt' means any pecuniary liability, whether payable presently or in future, or under a decree or order of a civil or revenue court or otherwise, or whether ascertained or to be ascertained, which, (a) in the case of displaced person who has left or been displaced from his place of residence in any area now forming part of west Pakistan, was incurred before he came to reside in any area now forming part of India; (b) in the case or a. displaced person who, before and after the 15th day of August, 1947, has been residing in any area now forming part of 'India, was incurred before' the said date on the security of any immovable property situate in, the territories now forming part of West Pakistan :

Provided that where any such liability was incurred on the security of immovable properties situate both in India and in West Pakistan, the liability shall be so apportioned between the said properties that the liability in relation to each of the said properties bears the same proportion to the total amount of the debts as the value of each of the properties as at the date of the transaction bears to the total value of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in West Pakistan;

(c) is due to a displaced person from any other person (whether a displaced person or not) ordinarily residing in the territories to which this Act extends; and includesany pecuniary liability incurred before the commencement of this Act by any such person as is referred to in this Clause which is based on and is solely by way of renewal of, any such liability as is referred to in Sub-clause (a) or Sub-clause (b) or Sub-clause (c):

Provided that in the case of a loan whether in cash or in kind the amount originally advanced and not the amount for which the liability has been renewed shall be deemed to be the extent of the liability: but does not include

any pecuniary liability due under a decree passed after the 15th day of August, 1947, by any court situate in West Pakistan or any pecuniary liability the proof of which depends merely on an oral agreement,'

Sub-section (9) of Section 2 of that Act defines a 'displaced debtor' as meaning a displaced person from whom a debt is due or is being claimed.

8. The term 'displaced person' has been defined in Sub-section (10) of Section 2 as meaning any person who, on account of the setting up of the Dominions of India and Pakistan, or on account of civil disturbances or the fear of such disturbances in any area now forming part of West Pakistan has after the 1st day of March, 1947, left, or been displaced from, his place of residence in such area and who has been subsequently residing in India, and includes any person who is resident in any place now forming part of India and who for that reason is unable or has been rendered unable to manage, supervise or control any immovable property belonging to him in West Pakistan, but does not include a banking company.

9. Section 5 of the Act provides:

'5. Application by displaced debtors for adjustment of debts:

(d) At any time within one year after the date on which this Act comes into force in any local area, a displaced debtor may make an application for the adjustment of his debts to the Tribunal within, the local limits of whose jurisdiction he actually and voluntarily resides, or carries on business or personally works for gain.'

10. Sub-section (2) of that Section requires what a displaced debtor has to state by way of particulars in the application aforesaid.

11. Section 6 of the Act says that where an application made under Section 5 does not comply with any of the requirements of that section, the Tribunal may either reject it, or grant to the applicant such further time as it thinks fit to comply with such requirements.

12. Section 7 indicates that if the application is not rejected under Section 6, the Tribunal shall, after causing the date for the hearing of the application to be entered in the notices referred to in Section 5, cause them to be served on the respondents.

13. Section 8 provides for objection by respondents. It lays down that in response to a notice under Section 7, the respondent may show cause against the application by filing a written statement containing his objections to the application.

14. Section 9 then provides as follows:

'9. Proceeding after service of notice an respondents.

(1) If there is a dispute as to whether the applicant is a displaced person or not or as, to the existence or the amount of the debt due to any creditor or the assets of any displaced debtor, the Tribunal shall decide the matter after taking such evidence as may be adduced by all the parties concerned and shall pass such decree in relation thereto as it thinks fit.

(2) It there is no such dispute or if the respondents do not appear or have no objection to the application being granted, the Tribunal may after considering the evidence as placed before it, pase such decree in relation thereto as it thinks fit.'

15. Section 10 then provides for claims by displaced creditors against displaced debtors. And Section 11 lays down the procedure to be followed on such creditor's petition.

16. The relevant parts of Section 15 of the Act with which we are concerned may now be quoted:

'15. Consequences of application by displaced debtor; where a displaced debtor has made an application to the Tribunal under Section 5 or under Sub-section (2) of Section 11, the following consequences shall ensue, namely:

(a) all proceedings pending at the date of the said application in any civil court in respect of any debt to which the displaced debtor is subject (except proceedings by way of appeal or review or revision against decrees or orders passed against the displaced debtor) shall be stayed, and the records, of all such proceedings other than those relating to the appeals, reviews or revisions as aforesaid shall be transferred to the Tribunal and consolidated;

(b).....

(c) no fresh suit or other proceeding (other than any such appeal, review or revision as is referred to in Clause (a)) shall be instituted against a displaced debtor in respect of any debt mentioned by him in the relevant schedule to his application;

(d) .....'

17. From the provisions aforesaid it is clear that upon the presentation of an application to a Tribunal under Section 5 of the Displaced Persons (Debts Adjustment) Act of 1951 two consequences follow immediately and automatically. One of these is that no civil court can entertain any new suit or other proceedings for the recovery of a debt which is the subject matter of dispute before the Tribunal. The other result is that all suits and proceedings already pending before a civil court in respect of any such debt are also suspended automatically. The bar to new suits or proceedings and the suspension of suits and proceedings already pending in a civil court, take effect spontaneously and automatically without the intervention of anything else. No order by the Tribunal or application by the debtor is called for. The provisions of Section 15 of the Act are mandatory in their character.

The Displaced Persons (Debts Adjustment) Act appears to us, from the provisions which, we have quoted above and from the other provisions contained in it, to be a self-contained Code with regard to adjustment of debts by displaced persons; and where an application under Section 5 has been made to the Tribunal, it is the Tribunal that has to decide the question of the debt and the status of the debtor. As soon as the application has been made, the matter is taken out of the hands of the civil court because the provision for stay under Section 15 comes into operation. It follows, therefore, that if a suit is pending at time of the application under Section 5, there is an ouster of jurisdiction of the civil court.

No doubt provisions in the law which oust the jurisdiction of a civil court must be strictly construed, and any civil court will be loath to come to the conclusion that its jurisdiction in a civil matter has been taken away. But when the Court is dealing with an Act passed for special reasons, applying to special persons, setting up a special Tribunal it is not difficult to appreciate the object which Parliament had in mind in placing certain matters solely within the jurisdiction of the special Tribunal set up, and preventing the civil courts from dealing with those matters.

Looking to the language of Section 15 it seems to as clear that as soon as an application has been made by a displaced person under Section 5 the consequences mentioned in Clause (a) of that Section must follow and the consequences are the staying of proceedings in respect of any debt which is mentioned in the Schedule annexed to the debtor's application under Section 5. It also seems to us clear that under Section 9 the only authority which can determine whether a person is a 'displaced person' or not and whether a 'debt' is due by him which debt falls within the definition of the Act, is the Tribunal set up under Section 4 of the Act. A similar view was taken by a Bench of the Bombay High Court in Baburao K. Pai v. Dalsukh M. Pancholi, (S) AIR 1955 Bom 89; and that view was followed by the majority of the Full Bench of the Punjab High Court in Parkash Textile Mills Ltd. v. Mani Lal, (S) AIR 1955 Punj 197. In delivering the majority view in that case Bishan Narain J., at page 212 of the report (with which Falshaw, J. concurred) expressed:

The Legislature has under the Act entrusted the Tribunal with a jurisdiction to determine whether the preliminary state of facts exist which will give it jurisdiction to proceed further in the matter.'

18. It has been laid down by their Lordships of the Supreme Court in Ebrahim Aboobakar v. Custodian General of Evacuee Property, New Delhi, AIR 1952 SC 319, that in such a case it is erroneous to say that the Tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the Legislature gave them jurisdiction to determine all the facts including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide, without any appeal being given; there is no appeal from such exercise of their jurisdiction.

19. We are in complete agreement with the view, expressed by the majority of the Full Bench of the Punjab High Court as stated above. It may be pointed out that under the present Act, Section 40 gives a right of appeal in certain circumstances to the High Court and if the Tribunal commits any error in deciding any of the matters mentioned in Section 9 of the Act, it is always open to a party to the proceedings to appeal to the High Court. It follows, therefore, that as soon as the application was made under Section 5 of the Act to the Tribunal constituted under Section 4, the consequences laid down in Section 15, ensued, and it was not open to the civil court to decide the question as to whether the applicant under Section 5 was a displaced debtor within the meaning of the Act or that the subject matter of the claim in the civil court was or was not a 'debt' as defined under the Act. Section 9 makes it abundantly clear that the only authority that can determine whether a person is a displaced person or not and whether a debt is due by him, which debt falls within the definition of the Act, is the Tribunal set up under Section 4 of the Act and not the civil court. In this view of the matter the learned Munsif acted illegally and with material irregularity in embarking upon a determination of the question that the matter in dispute before him was not covered by the definition of 'debt' under the Act and in holding that the consequences laid down, in Section 15 of the Act did not ensue.

20. Learned counsel has cited before us a Bench decision of the Bombay High Court in Karamchand v. Madhavdas, AIR 1956 Bom 669, in support of his submission that in order that there can be a debt which can be adjusted or with regard to the recovery of which the special facility provided by the Act can be afforded to a displaced person, it must be not only any liability but a pecuniary liability and the pecuniary liability must be an existing obligation, although it may not be payable in praesenti and even though it may not be ascertained at the relevant date; and that the emphasis that the Legislature has placed is upon the word 'pecuniary' which qualities liability, thereby ruling out other kinds of liabilities which although based upon an existing obligation are not pecuniary in their nature.

In that case K filed an application under Section 10 of the Displaced Persons (Debts Adjustment) Act of 1951 before the Tribunal constituted under the Act, claiming partnership account from M and others who were his partners on the basis of the partnership having been dissolved on a certain date and claiming moneys to be found due and payable to him on taking such accounts. The Tribunal came to the conclusion that the claim made by K was a claim to a liability which was not a pecuniary liability or, to put it in a different language, the claim made, by K was not a claim to a debt as defined by the Act, and although the claim was made against a displaced person the claim was not that a debt was due by the displaced person.

It was against the Tribunal's decision that K preferred an appeal before the Bombay High Court under the provisions of Section 40 of the Act and it was in that appeal that the decision of the Tribunal was upheld. The Bombay High Court observed that it was well settled that there is no relationship as of debtor and creditor between partners unless and until the partnership has been dissolved and accounts have been taken and it is ascertained what amount is due by one partner to another and until the accounts have been taken the only right that a partner has is to call on the other partners to render accounts to him, and therefore what K was seeking to enforce against the other partners was not any existing pecuniary liability, but he was seeking to enforce the obligation which lay upon those partners to render accounts to him.

The Bombay High Court further observed that the position would nave been different if the accounts had been made up and on the accounts being made up, a certain amount was found due to one partner and if that situation arose, then if that partner files a suit he is enforcing a pecuniary liability which has arisen and which the other partner is under obligation to discharge. But till the accounts are taken, there is no pecuniary liability which the other partner has to discharge because it is not known whether in fact there is any pecuniary liability upon him and that can only be known after the partnership accounts have been taken.

21. We think we are not called upon to determine such a question, because here there is not an appeal before us under Section 40 of the Displaced Persons (Debts Adjustment) Act from a decision of the Tribunal. It is a revision against an order of the Munsif who acted illegally and with material irregularity after assuming jurisdiction to determine a matter over which he had no jurisdiction. Therefore, even if the Munsif's view on the question as to whether the claim in the present suit was clearly not a debt as defined in the Displaced Persons (Debts Adjustment) Act is assumed to be correct, that conclusion cannot be given effect to because of the limitations placed over the Munsif under the Act and because his decision was given over a point which he was not competent to decide.

22. From what we have stated above, we areof opinion, that the revision should be allowed, theorder of the Munsif dated 10-9-1955, should be setaside and the munsif should be directed to stay theproceedings before him and to act in accordancewith the provisions of Section 15 of the Displaced Persons (Debts Adjustment) Act of 1951. In the circumstances of the case we direct the parties to bear their own costs in this Court.


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