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Swadeshi Bima Co. Ltd. Vs. Shiv NaraIn Katiyar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1939All74
AppellantSwadeshi Bima Co. Ltd.
RespondentShiv NaraIn Katiyar and anr.
Excerpt:
.....so far as the defendant shiv narain katiyar is concerned was perfectly right, but i find no justification in law for the dismissal of the suit as against kanhi singh......pronote upon which the suit is based was executed by the opposite parties shiv narain katiyar and kanhi singh on 21st july 1934 and the suit was instituted on 20th july 1937, that is on the last day of limitation. the plaintiff impleaded both the executants of the pro-note as defendants. it is admitted that one of the defendants, namely shiv narain katiyar, had previously made an application under section 4, encumbered estates act, and had obtained an order from the collector under section 6 of that act. the suit was not contested by shiv narain katiyar, but the other defendant kanhi singh wanted to tako advantage of the fact that shiv narain katiyar had made an application under section 4, encumbered estates act, and had secured an order of the collector under section 6 of that act. he.....
Judgment:
ORDER

Mulla, J.

1. This is an application in revision under Section 25, Small Cause Courts Act. It arises out of a suit for recovering a certain amount on. the basis of a pronote. The applicant here was the plaintiff' in the Court below. The pronote upon which the suit is based was executed by the opposite parties Shiv Narain Katiyar and Kanhi Singh on 21st July 1934 and the suit was instituted on 20th July 1937, that is on the last day of limitation. The plaintiff impleaded both the executants of the pro-note as defendants. It is admitted that one of the defendants, namely Shiv Narain Katiyar, had previously made an application under Section 4, Encumbered Estates Act, and had obtained an order from the Collector under Section 6 of that Act. The suit was not contested by Shiv Narain Katiyar, but the other defendant Kanhi Singh wanted to tako advantage of the fact that Shiv Narain Katiyar had made an application under Section 4, Encumbered Estates Act, and had secured an order of the Collector under Section 6 of that Act. He therefore made an application to the Court, in the first instance, praying that the suit should be stayed, but a few days later made another application in which he claimed that the suit should be dismissed altogether because it could not be instituted under the law. The learned Small Cause Court Judge has allowed that contention to prevail and has consequently thrown out the whole suit. Hence the present application in revision.

2. The learned Small Cause Court Judge is of the opinion that the defendant's contention was well founded on Section 7(i)(b), Encumbered Estates Act, which runs as follows:

No fresh suit or other proceeding other than an appeal or revision against a decree or order or a process for ejectment for arrears of rent shall, except as hereinafter provided, be instituted in any Civil or Revenue Court in the United Provinces in respect of any debts incurred before the passing of the said order.

3. The argument on behalf of the applicant is that the learned Judge has not correctly interpreted Section 7(i)(b), Encumbered Estates Act, and has consequently erred in throwing out the suit altogether, that is, even so far as it related to Kanhi Singh, who has made no application under the Encumbered Estates Act. It is contended that the plea that the suit could not be instituted was not open at all to Kanhi Singh who had made no such application. Upon a very careful consideration of the scheme of the Encumbered Estates Act and Section 7 and other relevant provisions contained therein, I have no hesitation in holding that the view taken by the learned Small Cause Court Judge is entirely wrong. Section 7(i)(b) is no doubt in very general terms and refers to a suit or other proceeding 'in respect of any debts incurred before the passing of the said order', but a moment's Consideration will show that the debts in question must be debts to which a landlord is subject as referred to in Section 7(i)(a). Again the reference in Section 7(i)(b) is to debts incurred before the passing of the said order' which clearly refers to the order passed by the Collector under Section 6 of the Act. It is evident that the Collector's order under Section 6 must relate to an application made by a landlord under Section 4, Encumbered Estates Act.

4. It necessarily follows therefrom that the debts referred to in Section 7(i)(b) cannot be the debts of a person who is not a landlord and who has made no application under Section 4 of the Act, If the interpretation put by the learned Small Cause Court Judge is accepted, it would be necessary to hold that the intention of the Legislature in passing the Encumbered Estates Act was to bring the whole machinery of the Civil Courts to a standstill so far as any suit or proceeding was based upon any debt. This is obviously an entirely untenable position. The Encumbered Estates Act was enacted to provide for the relief of encumbered estates in the United Provinces and it is not concerned with the relationship between an ordinary creditor and debtor. It is only when the debtor happens to be a landlord and he makes an application under Section 4, Encumbered Estates Act, that the provisions of that Act come into operation for the purpose of staying any proceeding that might be pending against him in any Civil Court at the date of his application and of preventing the institution of any fresh proceeding after the date of his application. Any person who is not a landlord but who incurs a liability jointly and severally with a landlord who makes an application under Section 4, Encumbered Estates Act, cannot plead that no suit can be instituted against him in respect of that liability. It is only in those cases where his liability with the landlord is only joint and not several that it may be open to him to contend that no suit can be instituted at all.

5. There can be little doubt in the present case that the liability of the two defendants, Shiv Narain Katiyar, who had made an application under Section 4, Encumbered Estates Act, and Kanhi Singh, who had made no such application, was not merely a joint liability, but a liability that was joint and several. Section 43, Contract Act, which makes the point perfectly clear, runs as follows:

When two or more persons make a joint promise, the promise may, in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform the whole of the promise.

6. Illustration A to that Section is as follows:

A, B and C jointly promise to pay D Rs. 3000. D may compel either A or B or C to pay him Rs. 3000.

7. In view of this clear provision, there cannot be the slightest doubt that the plaintiff could have recovered the debt either from Shiv Narain Katiyar or from Kanhi Singh. It was open to him to bring a suit against any one of them alone, and if he had adopted that course it would have been fully justified by Order 1, Rule 6, Civil P.C., which runs as follows:

The plaintiff may, at his option, join as parties to the same suit all or any of the persons severally, or jointly and severally, liable on any one contract including parties to bills of exchange, hundis and pronotes.

8. It is thus clear that if the plaintiff had instituted the suit against Kanhi Singh alone no valid objection could have been taken by the latter on the ground that his joint promisor Shib Narain Katiyar had not been impleaded. It is equally clear that if the plaintiff had instituted his suit, in the first instance, against both the defendants, there was nothing in the law to prevent him at some later stage from exempting, Shiv Narain Katiyar and in that case also Kanhi Singh could not have raised any valid objection. The suit instituted by the plaintiff out of which this application in revision arises was therefore fully competent against Kanhi Singh, and the learned Small Cause Court Judge was obviously wrong in dismissing the whole suit. His order of dismissal so far as the defendant Shiv Narain Katiyar is concerned was perfectly right, but I find no justification in law for the dismissal of the suit as against Kanhi Singh. There is nothing in the Encumbered Estates Act to affect or control the plaintiff's right to institute a suit against Kanhi Singh. It is true that upon the application made by Shiv Narain Katiyar a notice would be-issued in the ordinary course to the plaintiff to put in a written statement of his claim, and it would be open to the Special; Judge under Section 9, Clause (5) of the Act to make Kanhi Singh a party to the proceeding and to apportion the liability under the pro-note between him and Shiv Narain Katiyar who is the applicant under Section 4 of the Act. When the Special Judge has made such apportionment, Section 9, Clause (5)(b) shall come into operation and the plaintiff shall have a right to recover from Kanhi Singh only such amount as may have been determined by the Special Judge.

9. There is nothing however in any provision contained in the Encumbered Estates, Act even to suggest that the plaintiff's right to bring a suit against Kanhi Singh is barred or limited in any way. It is to be noted that the apportionment of liability between joint debtors made by a Special. Judge under Section 9, Clause (5) of the Act is not an executable decree. In fact, the Encumbered Estates Act provides only for a decree being passed in favour of a claimant against the landlord who makes an application, under Section 4 of the Act. There is no provision in it for a decree in favour of the claimant against any person who is jointly liable with the landlord to discharge the debt. If the plaintiff is not allowed to institute the suit, the necessary result would be that his claim against Kanhi Singh would be barred by time. There is no provision in the Encumbered Estates Act to save limitation for the claimant against the landlord in respect of any claim which he might further have against the joint debtor with the landlord, arising out of a joint and several liability. I am therefore definitely of the opinion that the suit instituted by the plaintiff was fully competent as against Kanhi Singh and it should not have been dismissed as against him.

10. The view which I have taken in this case is fully supported by two decisions of the Court, one by a learned single Judge in Rammurti Saran v. Rahat Ali Civil Revn. No. 450 of 1937 and the other by a Bench, in Sewai Ram Pitam Lall v. Imperial Bank of India Agra Civil Revn. No. 470 of 1936. The former case is entirely on all fours with the present one, while the latter proceeds on the same principle, namely that where the liability of two debtors is not merely joint, but also joint and several, and one of them happens to be a landlord who makes fan application under Section 4, Encumbered Estates Act, it is not open to the other to raise the objection that the suit, so far as it relates to him, cannot be instituted. The result therefore is that I allow this application and set aside the order of dismissal passed by the learned Small Cause Court Judge. The suit shall be restored and shall be deemed to proceed against Kanhi Singh alone. It will be open to the learned Small Cause Court Judge to wait for the decision of the Special Judge regarding the liability of Kanhi Singh. The applicant shall have his costs in this Court.


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