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V.K. Balakrishnan Vs. Asoka Bank Ltd., Muttathangadi, Sherlalai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 702 of 1964
Judge
Reported inAIR1966Ker42
ActsKerala Agriculturists Debt Relief Act, 1958 - Sections 2, 15(1) and 18(1)
AppellantV.K. Balakrishnan
RespondentAsoka Bank Ltd., Muttathangadi, Sherlalai
Appellant Advocate George Vadakkel,; M.A. Joseph and; Jose T. Manjooran
Respondent Advocate P.J. Varghese,; K. Raman and; C.K. Sivasankara Panicker
Cases ReferredKesava Pillai v. Ramakrishna Paniekev.
Excerpt:
.....act, 1958 - whether agriculturist debtor can claim relief under sections 15 and 18 in respect of debts incurred by him after commencement of act - no provision in act of 1958 preventing post enactment creditors of agriculturist from taking appropriate proceedings against assets surrender under section 15 (3) (c) for realisation of their debts - section 18 deals with settlement of liabilities of debtor by court - expression 'liabilities' in section 18 (1) is used in an unrestricted sense and will include all debts of agriculturist even those incurred after commencement of act - expression 'liabilities' in section 18 (1) not controlled by section 15 (8) (b) (1) - liabilities to be settled under section 18 include every liability of agriculturist whether incurred before or after..........an agriculturist debtor can claim relief under sections 15 to 18 of act 31 of 1958 in respect of debts incurred by him after the commencement of the act, has been referred to the full bench by vaidialingam j. the answer to the question depends primarily on an interpretation of sections 15 and 18 of the act.2. the contention of the learned advocate for the first counter-petitioner is that in view of section 15 and the definition of 'debt' in section 2(c) of the act the settlement of 'liabilities' by court under section 18 on an application filed under sections 15(1) of the act must ho con lined to debts incurred before the date of commencement of the act in support of this proposition the learned counsel cited the following observation from the decision in balakrishnan nair v. mohammed.....
Judgment:

T.S. Khishnamoorthy Iyer, J.

1. The Civil Revision Petition which raises the question whether an agriculturist debtor can claim relief under Sections 15 to 18 of Act 31 of 1958 in respect of debts incurred by him after the commencement of the Act, has been referred to the full Bench by Vaidialingam J. The answer to the question depends primarily on an interpretation of Sections 15 and 18 of the Act.

2. The contention of the learned advocate for the first counter-petitioner is that in view of Section 15 and the definition of 'debt' in Section 2(c) of the Act the settlement of 'liabilities' by court under Section 18 on an application filed under Sections 15(1) of the Act must ho con lined to debts incurred before the date of commencement of the Act In support of this proposition the learned counsel cited the following observation from the decision in Balakrishnan Nair v. Mohammed Kunju 19641Ker LT 12.

'Section 15(3) which provides that 'the amount and other particulars of all claims against him (the debtor) at the commencement of this Act, together with the name, address and residence of his creditors' should he included in the petition, seems to indicate that the liabilities inclined after the commence ment of the Ad are to he excluded in proceedings under Section 15 the definition of 'debt' in Section 2(c) includes only liability due from or incurred by an agriculturist on or before the commencement of the Act. '

3. But a Division Bench of this Court in Hameed Koya v. Arunachalam Nair. 1963 Ker LT 653 following the decisions in Umbichi Ahmadu v. Kalyaniyamma, 1960 Ker LT 865 and Meenakshikutty Varasiaramma, v Travail-core Forward Bank Ltd., 1961 Ker LT 377, was of the view that the definition of the word 'debt' in Section 2 clause (e) 'does not govern the content of that expression occurring in Section 15 of tlie Act.' In view of these decisions and the use of the word 'liabilities' in Section 18 it is contended on behalf of the revision petitioner that the agriculturist if competent to file an application under Section 15(1) is entitled to a settlement of all his debts whether incurred prior or subsequent to the Act.

4. A definition clause does not necessarily apply to all possible contexts in which the word may be found in a particular statute. A strict adherence to the definition may lead to an anomaly or even repugnancy. In dealing with statutory definitions, Craies on Statute Law (sixth edition) page 101 states:

'It follows from the rule thus variously stated that all statutory definitions or abbreviations must be read subject to the qualification, variously expressed, in the definition clauses which create them, such as: 'unless the context otherwise requires': or 'unless a contrary intention appears'; or 'if not inconsistent with the context or subject matter'.'

Their Lordships of the Supreme Court in Vanguard Fire and General Insurance Co. Ltd., Madras v. Fraser and Ross, AIR 1960 SC 971 at pp. 974 and 975 observed:

'It is well settled that all statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word denned is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or the context. That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case, namely, unless there is anything repugnant in the subject or context. Therefore in finding out the meaning of the word 'insurer' in various sections of the Act, the meaning to be ordinarily given to it is that given in the definition clause. But this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context. In view of this qualification, the court has not only to look at the words but also to look at Ihe context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances.'

Even where the definition clause does not contain the qualifying words, the Lord Chancellor in 1940 AC 613 at 621 observed:

'It is perhaps worth pointing out that the words, 'unless the context otherwise requires', which we find in the Consolidating Act of 1929, are not to be found in the amending Act of 1928 1 attribute little weight to this fact, for in my opinion some such words are to be implied in all statutes where the expressions which are interpreted by a definition clause are used in a number of sections with meanings sometimes of a wide and sometimes of an obviously limited character.'

Section 2 of Act 31 of 1958 contains the following qualifying words:

'III this Act unless the context otherwise requires'

It is in the light of the qualifying words and the principles stated above that the words debts in Section 15(1) have to be interpreted,

5. Sections 15 to 18 provide for bringing about a full settlement of the liabilities of an agriculturist who is unable to pay his debts under the provisions of the Act. They are in the nature of quasi-insolvency proceedings.

6. Section 15(1) of the Act reads:

'Any agriculturist who is unable to pay his debts under the foregoing provisions of this Act, may present an application to the Court, within whose jurisdiction he resides or ordinarily carries on business for a full settlement of his debts.'

Section 18(1) reads:

'The Court shall then settle the liabilities of the debtor in the manner mentioned here-under; namely:

xx xx xx xx While Section 15(1) of the Art prescribes thecondition precedent to be satisfied before anyagriculturist makes an application for a fullsettlement of his debts, Section 18 prescribes thescope and ambit of such settlement.Section 15(1) is therefore confined to an agriculturist who is unable to pay under the foregoing provisions of the Act. Payment undersuch foregoing provisions can be made only inrespect of debts defined under Section 2(c) of theAct. Necessarily it follows that the inabilityto pay contemplated by clause (1) of Section 15 isalso in respect of such debts and the existenceof any such debt or debts is essential for themaintainability of a petition under Section 15(1).The Act is passed to provide for the relief ofindebted agriculturists. The agriculturist isgiven the right to pay the debt defined underSection 2(c) and calculated under the provisions ofthe Act in instalments and get a discharge.There may still be some who may not be ableto fake advantage of those provisions. To themsection 15 gives a substantial relief of a differentkind. To take advantage of it theagriculturist must show that he has a debtwhich he is unable to pay under the foregoingprovisions of the Act. It therefore follows thatdebts' in the clause 'who is unable to pay hisdebts under the foregoing provisions of theAct' in Section 15(1) can only mean 'debt' dennedin section 2(c) of the Act.

7. In 1900 Ker LT 865 one of the debts included in the application filed under Section 15(1) was a debt under Section 2(c) of the Act. The necessity of a debt under Section 2(c) of the Act for the maintainability of an application under Section 15(1) did not come up for consideration in the same decision. But in 1961 Ker LT 377 it was observed:

'The requirement of one of the debts being within the definition of Section 2(c) to attract the operation of Sections 15 to 18 has no basis in the wording of Sections 15 to 18 of the Act.'

We are of the view that the statement of law that no debt as defined in Section 2(c) is necessary to enable an agriculturist to file an application under Section 15(1) is not correct. We therefore disagree with the dictum in 1961 Ker LT 377, when it holds, that no debt defined under Section 2(c) of Act 81 of 1958 is necessary to sustain an application under Section 15(1) of the Act. This decision (1961 Ker LT 377) is relied on in 1963 Ker LT 653 only for the proposition that even debts excluded by Section 2(c) can be included for settlement under Section 18.

8. The next question is whether the expression 'liabilities' in Section 18(1) has to 'be limited ID the debts incurred prior to the Act. Even though one such debt defined in Section 2(e) is necessary for sustaining the application under Section 15(l), all the assets and liabilities of the agriculturist inclusive of those incurred subsequent to the Act will have to be taken into account for a settlement under Section 18.

9. A debtor has tu state in an application filed under Section 15(1) among other things (l) the amount and other particulars of all his properly including daitns due to him together with a specification of the value of such property and the place or places at which any such property is to he found and details of any mortgage, lien or charges thereon, (2) a statement that he wants a fair settlement of his debts, (3) a statement that he unconditionally leaves all his assets in Ihe control of the court. Section 15(3) (e) read with sub-clause (c) thereof shows that the word 'assets' in sub-clause (e) is used in its wider sense meaning all the property of the debtor whether charged or not and simple debts. The assets which a debtor has to surrender to the court are those belonging to him on the date of the application. This can include even assets acquired by an agriculturist after the Act. As was observed in Kesava Pillai v. Ramakrishna Paniekev. 1961 Ker LT 457 in the case of Section 10(3) (e) of the Travancore Acts II and III of 1116-a provision corresponding to S. 15(3) (e) of Act 31 of 1958-by virtue of the surrender of the assets in the control of the court, the court 'gets control of all tha assets of the debtor even if there is no actual vesting of property as in insolvency and thereafter the court holds the assets in trust for settling the liabilities of the debtor after allotting his due share' in accordance with Section 18(1)(a). Ordinarily the assets held by an agriculturist are available to be proceeded against for the realisation of all his debts. There is no provision in Act 31 of 1958 preventing the post-enactment creditors of an agriculturist from taking appropriate proceedings against the assets surrendered under Section 15(3) (c) for the realisation of their debts. The benefit of such assets would therefore be available fo such creditors also.

10. Section 18 deals with the settlement of liabilities of the debtor by court. The scheme of distribution of the assets of the debtor for settling his liabilities seems to us to indicate that the expression 'liabilities' in Section 18(1) is used in an unrestricted sense and will include all the debts of the agriculturist even those incurred after the commencement of the Act. Section 18, for settling the liabilities of the debtor, provides that after allotment of one-fourth of the entire assets (not exceeding Rs. 6,500 in value) subject to the terms of Section 18(2)(a) and after payment of all liabilities by way of public revenue due on land as defined in the Revenue Recovery Act for the time being in force or any tax, cess, fee, rent. jenmikaram or such other dues chargeable by virtue of any enactment for the time being in force, all the remaining assets shall be distributed and made over to the creditors. There is a proviso to Section 18(1) (b) of the Act as to priority in the matter of payment to the creditors as follows: (a) debts due to secured creditors, (b) debts due to the Government or to any local authority, (c) unsecured creditors in proportion to their debts. It is not argued -and in our opinion rightly too--that the debts by way of public revenue due on land etc debts due to secured creditors and the unsecured simple money debts that may be payable to the Government or any local authority referred to in Section 18(1)(b) can only be debts incurred prior to the date of the commencement of the Act. This obviously shows that the expression 'liabilities' cannot be given the same meaning as the word 'debt' defined in Section 2(c). If the contention of the first counter-petitioner is accepted, only those unsecured creditors whose debts were incurred subsequent to the Act would stand outside the purview of Section 18(1). These unsecured creditors are also entitled to proceed against the assets of the agriculturist for the recovery of their debts in other appropriate proceedings. Thus there will be a scramble over the assets of the agriculturist among his unsecured creditors whose debts were incurred both before and after the Act. The result will be that an agriculturist who files an application under Section 15(1) will be deprived of the benefit of allotment under Section 18(1) at the instance of unsecured creditors whose debts were incurred after the Act. We find it difficult to attribute this intention to the Legislature when it directed the settlement of the liabililies of an agriculturist and allotment of one-fourth of the entire assets (not exceeding Rs. 6,500 in value) to him subject only to such liabilities by way of public revenue due on land as defined in the Revenue Recovery Act for the lime being in force, or any tax, cess, fee, rent, jenmikaram or such other dues chargeable thereon by virtue of any enactment for the time being in force. It therefore follows that we cannot accept the contention on behalf of the first counter-petitioner to give a narrow interpretation to the expression 'liabilities' in Section 18(1) as denoting only those incurred prior to the commencement of the Act. In coming to the conclusion that the liabilities incurred after the commencement of the Act are to be excluded from proceedings in Section 15, the learned Judges in 1964 Ker LT 12 have relied on Section 15(3)(h) of the Act which provides for the inclusion of ''the amount and other particulars of all claims against him (the debtor) at the commencement of this Act together with the name and address and residence of his creditors' in the application to be filed under Section 15(1). The scheme of Section 18, the scope of the expression 'liabilities' occurring therein and the effect of sub clauses (c) and (e) of clause 3 of Section 15 have not been considered in the above decision. We feel that the meaning of the expression 'liabilities' in Section 18(1) cannot in any way be controlled by clause 1 or sub-clause (b) of clause 8 of Section 15. We are therefore of the view that the decision in 1964 Ker LT 12 in so far as it lays down that debts incurred after the commencement of the Act are to be excluded in proceedings under Section 15(1) of the Act does not lay down the correet law and has to he overruled to that oxtenl We also approve of the dictum laid down in 1961 Ker LT 377 that the liabilities to be settled under Section 18 of the Act include every liability of an agriculturist whether incurred before or after the commencement of the Act It therefore follows that the order of the court below has to be set aside and the order staving the execution of the decrees of the first counter-petitioner has to he restored. The civil revision petition is thus allowed and we make no order as to costs. In the view we have taken, we point out Ihe necessity to make suitable amendments for the inclusion of post-enactment creditors and the particulars of their claims in an application under Section 15(1) and for the issue of notice under Section 1R(2) to such creditors of the agriculturist.

11. Since we have held that the debtsdue to the first counter-petitioner also comein for settlement under Section 18 of the Act, it isopen to the first counter-petitioner to get himself impleaded in the petition for settlement ofliabilities pending in the court below and anyorder already passed removing him from theparty array, though at his in sentance will notoperate as a bar.


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