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Pandit Chander SaIn Vs. Rani Vidya Wati and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberRegular First Appeal No. 1321 of 1960
Judge
Reported in7(1971)DLT329
ActsDisplaced Persons (Debt Adjustment) Act, 1951 - Sections 2(10)
AppellantPandit Chander Sain
RespondentRani Vidya Wati and ors.
Advocates: Harbans Singh and; Santosh Chatterjee, Advs
Cases ReferredKrishan Talwar v. Hindustan Commercial Bank Ltd. and
Excerpt:
displaced persons (debts adjustment) act (1951) - sections 2(10) & 29- displaced person-who is-civil court-jurisdiction of civil court- whether competent to determine that a party before it is a displaced person and to grant relief under section 29-cesser of accrual of interest-plea of-whether can be taken in proceeding before it. ; the respondent executed a promissory note for a loan advanced to him by the appellant at lahore before the partition of the country in 1947. at the time of the execution of the promissory note the respondent was residing at lahore but had his properties at various places in india where also he used to reside before partition. after migration to india, the appellant filed a suit for recovery of the principal amount of the loan and interest thereon. the..........preventing the civil courts from dealing with those matters. in this case a creditor had filed a civil suit against a displaced person on april 8, 1952. on may 6, 1962, the displaced person-defendant made an application under section 5 of the act to the tribunal at delhi and thereupon contended before the bombay high court that the suit pending before it was liable to be stayed under section 15(a) of the act. this contention was up-held. we do not think that this case is of any help to the appellant. the bombay high court held that since the act was a self-contained code and a special act passed for special reasons, applying to special persons and setting up a special tribunal, it was within the exclusive jurisdiction of the tribunal after an application had been made to it under.....
Judgment:

S.N. Andley, J.

(1) This appeal raises the question whether in a Civil Suit a Civil Court can determine whether a party before it is a displaced person and whether he can take advantage of the provisions of section 29 of the Displaced Persons (Debts Adjustment) Act, 1951 (hereinafter referred to as the (Act') which came into force in Delhi as from December 10, 1951. The Commercial SubJudge, Delhi, who decided the suit filed by the appellant held that the predecessor-in-interest of the Defendant-respondents was a displaced person and they could take advantage of the provisions of the said section.

(2) The appellant had advanced a loan of Rs. 15,000.00 to Raja Dhyan Singh of Sheikhupura at Lahore against a Promissory Note dated May 23, 1946 carrying interest at Re. 1.00 percent per month executed by him. The respondents are the legal representatives of the executant who died at Delhi on February 1, 1957. During his lifetime, he had paid, from time to tmie, an aggregate amount of Rs 3,000.00 to the appellant towards interest due upon the promissory note. After the death of the executant, the appellant filed a suit for the recovery of Rs. 34,000.00 against the respondents. In this suit, he claimed a sum of Rs. 15,000.00 as principal and Rs. 22,163/13.00 as interest accrued from May 23, 1946 to September 16, 1958 and after giving credit for Rs. 3,000.00 paid by the executant towards interest and giving up a sum of Rs. 163/13.00 sued for Rs. 34,000.00.

(3) The suit was contested by the respondents who denied the loan and the execution of the promissory note. They also denied the alleged part payments and acknowledgements and pleaded that the suit was barred by time. They also pleaded that the appellant had not notified his claim to the Court of Wards, Sheikhupura, within tile time prescribed by law and, thereforee, the debt stood discharged. They further alleged that the debt in dispute was without legal necessity and was tainted with immorality. The last plea, which alone was argued in this appeal, was that the executant was a displaced person within the meaning of the Act and, thereforee, no interest will accrue on the said loan on and from the 15th day of August, 1947, by virtue of section 29 of the Act. In answer to this last plea, the appellant contended that the Civil court would have no jurisdiction to entertain this plea as the determination of these questions was within the special and exclusive jurisdiction of the Tribunals constituted under the Act,

(4) During the trial of the suit, respondents nos. 1,3 and 4 compromised with the appellant and on December 17, 1958, a compromise decree was passed against them whereunder these respondents were to pay Rs. 17.937/8.00 to the appellant. It is admitted that respondents nos. 1,3 and 4 paid to the appellant the said sum of Rs. 17,937/8.00 in execution of the compromise decree sometime in 1959.

(5) The trial-court held that the executant had taken a loan of Rs. 15,000.00 and had executed the promissory note as alleged by the appellant; that the suit was within time as the executant had acknowledged the debt and made part payments from time to time; that the appellant had notified his claim to the Court of Wards, Sheikhupura within the time prescribed; that the debt had not been proved to be without legal necessity or tainted with immorlity; that the executant was a displaced person from Lahore and that relief could be granted to the respondents by the Civil. Court under section 29 of the Act.

(6) Applying section 29 of the Act, the trial-court found that interest on the loan amount of Rs. 15,000.00 for the period between May 23, 1946 and August 14, 1947, at the contractual rate would be Rs. 2250.00 and Along with the principal amount of Rs. 15,000.00 the total amount due to the appellant would be Rs. 17,250.00 out of which the appellant had admittedly been paid Rs. 3,000.00 by the executant leaving a balance of Rs. 14,250.00 due from the executant or his legal representatives while the appellant had admittedly realised Rs. 17,937/8.00 from respondents nos. 1,3 and 4 under the aforesaid compromise-decree. In the result the trial-court dismissed the suit.

(7) The first contention urged on behalf of the appellant is that the executant was not a displaced person. There is over-whelming evidence on the record to prove that the executant had, after the 1st day of March, 1947, been displaced from his place of residence in an area now forming part of West Pakistan and had been subsequently residing in India. Nanak Chand (P.W. 6) has stated that the executant lived at Lahore till the partition of the country in 1947 and thereafter shifted to Delhi as a refugee. Milkhi Ram, (P.W. 7) has stated that the executant was a permanent resident of Lahore before partition and had his estate at Lahore in Sheikhupura. He has further stated that after partition the executant migrated to Delhi. Chander Sain, the appellant himself has stated that the executant was living at Lahore and other places in India before the partition of the country and had his property at Lahore and these other places. He has further admitted that the executant, after his migration to Delhi after the partition of the country, had paid different sums to the appellant on account of interest. In further support of the fact, the Respondents produced the refugee registration certificates Exh. D-1 which bears the signatures of the executant. Respondent no. I has stated the executant was permanently residing at Lahore; that after partition of the country land was allotted to the executant at Karnal and that he had migrated to India after the partition of the country. The argument of the appellant is that the executant had several places of residence some of which were in India and it could not thereforee be said that he had been displaced from his place of residence in Lahore as a result of the setting up of the two dominions in 1947.

(8) The evidence on record shows that the executant, who was the Raja of Sheikhupura in Lahore, was a permanent resident of Lahore and that he had migrated to India as a result of the setting up of the two dominions and would clearly fall within the definition of Displaced Person given in the Act. The mere fact that he had properties at various places in India where also he used to reside would not affect the question. A person may have several residences. The fact that the executant had a residence at Lahore before the setting up of the two dominions which he left after 1st March, 1947 where after he had been residing in India brings him clearly within the definition of 'displaced person' as contained in sub-section 10 of Section 2 of the Act.

(9) The next argument on behalf of the appellant is that the decision of the question as to whether a person is a displaced person within the meaning of the Act is within the exclusive jurisdiction of the Tribunals constituted under the Act and the Civil Court has no jurisdiction to determine this matter. A connected argument on behalf of the appellant is that relief under Section 29 of the Act can be granted only by the Tribunals constituted under the Act and not by a Civil Court. Since these two questions are connected, they will be discussed together. Section 29 of the Act is in these terms :

S. 29: Cesser of accrual of interest.-(1) On and from the 15th day of August, 1947, no interest shall accrue or be deemed to have accrued in respect of any debt owed by a displaced person, and no Tribunal shall allow any future interest in respect of any decree or order passed by it : Provided that : (a) where the debt is secured by the pledge of shares, stocks, government securities or securities of a local authority, the Tribunal shall allow, for the period commencing from the 15th day of August, 1947 and ending with the date of commencement of this Act, interest to the creditor at the rate mutually agreed upon or at a rate at which any dividend or interest has been paid or is payable in respect thereof, whichever is less; (b) in any other case the Tribunal may, if it thinks it just and proper to do so after taking into account the paying capacity of the debtor as defined in section 32, allow, for the period mentioned in clause (a) interest at a rate not exceeding four percent per annum simple. (2) Nothing in this section shall apply to the interest payable in respect of any monies advanced by a creditor including an insurance company, on the security of a policy of life insurance of a displaced debtor in order to keep it alive.

(10) The Act as its preamble shows makes 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 there with or incidental thereto. The debt of which adjustment and settlement is provided for is defined as a pecuniary liability incurred by a displaced person before the 15th day of August, 1947 and includes a pecuniary liability due to a displaced person. For the purpose of such adjustment and settlement. Tribunals were constituted under Section 4. Section 3 made the provisions of the Act affective not withstanding anything in-consistant therewith contained in any other law for the time being in force. A displaced debtor could apply to the Tribunal under section 5 by making an application in the prescribed form. Similar right was given by Section 10' to a displaced person having a claim against a displaced debtor. Jurisdiction was conferred on the. Tribunal by sub-section I of Section 9 and sub-section 2 of Section 14 to decide whether the applicant before it was a displaced person or about the existence of the debt or as to the amount thereof. Upon the filing of an application by a displaced debtor all proceedings in any Civil Court in respect of any debt were to be stayed and there was a bar to a fresh suit and to the transfer of any attached immovable property by section 15. Sub-section I of Section 19 gave to a displaced person from payment of interest on monies remaining un-paid, inspire of calls, on any shares held by a displaced person. Then Chapter Iii of the Act provided various other reliefs to displaced persons. Section 29 which has been quoted earlier contains a positive mandate that no interest would accrue on any debt, meaning a pecuniary liability incurred before August 15, 1947, on and from that date. It also contains an injunction against the Tribunal allowing any future interest in respect of any decree or order passed by it. Proviso (b) to Sub-section I of Section 29 empowers the Tribunal to allow interest at a rate not exceeding 4 percent per annum simple if it finds that the displaced debtor has the paying capacity. Section 30 grants exemption to a displaced person from arrest or imprisonment in execution of any decree for the recovery of any debt. Section 31 amends Section 60 of the Code of Civil Procedure in the matter of attachment of property. Section 32 provides for the scaling down. of debts in accordance with the paying capacity of the displaced debtor. Section 36 amends the Indian Limitation Act, 1908 by providing for extension of the period of limitation prescribed by the latter Act. Section 37 contains provisions over-riding Section 48 of the Code of Civil Procedure and curtails the period of limitation for execution of certain decrees. Section 38 provides for sale of the immovable property of a displaced person in execution and contains provisions for adjustment of the decree even though the market value of the property attached is less than the decretal amount, if such property is transferred to the decree-holder.

(11) The appellant's contention is that the Act is a complete self-contained Code with regard to the adjustment of debts by displaced persons and, thereforee, the reliefs which are provided by Chapter Iii and other provisions of the Act can be granted only by a Tribunal and not by a Civil Court. Reliance is placed by the appellant upon the case reported in : AIR1955Bom89 in re : Baburao K. Pai v. Dalsukh M. Pancholi where it has been observed that provisions in the law which oust the jurisdiction of a Civil Court must be strictly construed but when the court is dealing with an Act passed for special reasons, applying to special persons setting up aspecial 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. In this case a Creditor had filed a Civil suit against a displaced person on April 8, 1952. On May 6, 1962, the displaced person-defendant made an application under Section 5 of the Act to the Tribunal at Delhi and thereupon contended before the Bombay High Court that the suit pending before it was liable to be stayed under Section 15(a) of the Act. This contention was up-held. We do not think that this case is of any help to the appellant. The Bombay High Court held that since the Act was a self-contained Code and a Special Act passed for special reasons, applying to special persons and setting up a special tribunal, it was within the exclusive jurisdiction of the Tribunal after an application had been made to it under Section 5 of the Act to decide about the existence of the debt and the status of the applicant. This case is no authority for the proposition that the reliefs which are provided by the provisions in Chapter Iii of the Act and by other sections referred to earlier can be granted only by a Tribunal constituted under the Act and not by a Civil Court. The case reported in : AIR1957MP98 in re : Shyamlal Ramkrishna Agrawal and another v. Takhatmal Bodhraj and another was a case similar to the above cited Bombay case. In this case also, upon the filing of an application under Section 5 of the Act, the execution proceedings pending before the Civil Court were ordered to be transferred to the Tribunal by reason of the provisions of Section 15 of the Act. The above-cited Bombay decision was followed in : AIR1960All68 in re : Bishwa Nath Gupta v. Basdeomal Jogdhian.

(12) There is no doubt that if an application under section 5 of the Act is pending before a Tribunal the jurisdiction of the Civil Court to decide matters relating to adjustment and settlement of debts as provided by the Act will be ousted by reason of Section 15, but that does not mean that in the absence of such an application, the jurisdiction of the Civil Court to grant all the reliefs which are provided by Chapter Iii and other provisions of the Act is ousted. Such a construction would be repugnant to the objects, purposes and provisions of the Act. It cannot be doubted that if an application is made to a Civil Court for the arrest or imprisonment of a displaced person in execution of any decree for the recovery of any debt, the displaced person can claim exemption from arrest by reason of Section 30 of the Act. The exemption from arrest is only against a decree of a Civil Court and such exemption can be claimed only from a Civil Court which is executing its decree. If this were not so, the relief from exemption from arrest will be rendered illusory because there is no provision in the Act empowering the Tribunal to grant the exemption in respect of an execution pending in a Civil Court. A displaced person may not want an adjustment of his debt which has resulted in a Civil Court decree and he may merely rest content only with the relief of exemption from arrest. We do not see any reason why such an exemption cannot be granted by a Civil Court. That being so, it necessarily follows that the Civil Court will have jurisdiction to determine whether the person who is claiming the exemption is a displaced person or not. Similarly the relief in the matter of attachment of property provided by Section 31 of the Act can be claimed by a displaced person in a Civil Court if a decree passed by it is sought to be executed by attachment of his property. Section 36 provides for the extension of the period of limitation and the plea contemplated by this Section can be taken only in a civil suit or other legal proceeding. Similarly if the decree of a Civil Court is sought to be executed after the period of limitation as curtailed by Section 37 of the Act the plea will be determined by the Civil Court which is executing the decree. The relief provided by Section 38 of the Act in the matter of sale of immovable property in execution of a Civil Court decree is to be granted only by the Civil Court which is executing its decree for the recovery of a debt against a displaced person. Similarly the reliefs granted by sections 19 and 20 of the Act are available to a displaced person irrespective of whether he has approached the Tribunal for the grant of such reliefs. The various provisions mentioned above, make it clear that many of the reliefs provided by the Act are available to a displaced person in respect of a debt, meaning a pecuniary liability incurred before August 15, 1947, irrespective of whether the proceedings wherein such reliefs are prayed for are pending before a Civil Court or a Tribunal and it, thereforee, follows that in all such matters, the Civil Court will have jurisdiction to decide whether the applicant for relief is a displaced person and whether the debt is a debt contemplated by the Act.

(13) In line with the reliefs above referred to is the relief granted by section 29 of the Act. The first part of sub-section I of this Section contains an absolute prohibition that on and from 15th day of August, 1947 no interest shall accrue or be deemed to have accrued in respect of any debt owed by a displaced person. The second part of this Sub-section contains a different prohibition which is against a Tribunal in the matter of allowing future interest in respect of any decree or order passed by it. This prohibition is subject to the two provisos.

(14) It seems to us that if there is a debt owed by a displaced person. no interest shall accrue on such a debt after August 15, 1947. This cesser to accrual of interest is related to a debt owed by a displaced person and has no reference to the forum where the claim may be pending. We do not find anything in the language of Section 29 to pursuade us to say that there will be no cesser of accrual of interest in respect of any debt owed by a displaced person if a claim is pending in a Civil Court but there will be cesser of accrual of interest, if a claim is pending before a Tribunal. We do not find any substance in the argument on behalf of the appellant that the second part of Sub-section I of Section 29 contains an indication that the cesser of accrual of interest will be available to a displaced person only if an application for adjustment of a debt is pending before the Tribunal. As stated above, the provision as to cesser of accrual of interest is absolute in respect of any debt owed by a displaced person.

(15) For the reasons stated above it follows that if a plea about the cesser of accrual of interest is taken in a suit pending before a Civil Court, it will be competent for the Civil Court not only to determine whether there is a debt owed by a displaced person within the meaning of the Act but also to grant relief upon finding that there was such a debt. The view which we have taken finds support from a decision of the Punjab High Court reported in in re : Krishan Talwar v. Hindustan Commercial Bank Ltd. and another. where the Court was considering Section 17 of the Act. It was observed that the provisions of Section 17 are an addition to the substantive law of the country and advantages given by it are available to a debtor even in a Civil Court. We are, thereforee, of the view that the trial court had jurisdiction to decide whether the executant was a displaced person and also to grant relief under the first part of sub-section I of section 29 of the Act by holding that the debt in suit ceased to carry interest after August 15, 1947.

(16) The calculations made by the trial-court have not been disputed. It would, thereforee, appear that the appellant has received Rs. 17.937/8.00 against a claim of Rs. 14,250 as stated above. In the result this Appeal is dismissed with costs.


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