Skip to content


Bhadsha Stores Vs. P.V.K. Govindan Kutty - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 1677 of 1954 (M)
Judge
Reported inAIR1957Ker41
ActsDebt Law; Madras Indebted Agriculturists' (Temporary Relief) Act, 1954 - Sections 4; Code of Civil Procedure (CPC) , 1908 - Sections 115
AppellantBhadsha Stores
RespondentP.V.K. Govindan Kutty
Appellant Advocate V. Balakrishna Eradi, Adv.
Respondent Advocate K.P. Raman Menon, Adv.
DispositionRevision allowed
Cases ReferredPalanichami Chettiar v. Reliance Bank of India
Excerpt:
.....dismissal of suit merely for reason that defendant is agriculturist - protection granted to indebted agriculturist against all legal proceedings for recovery of debt due by him for period of one year - agriculturist not free him from all liabilities for that debt - order passed by subordinate judge liable to be set aside - revision allowed. - - this inference gains strength from section 5 of the act which provides for the exclusion from the normal period of limitation applicable to such legal proceedings, the period during which such proceedings are held up by force of section 3. a creditor who, believing in good faith that his debtor is an agriculturist, refrains from instituting legal proceedings against the debtor during the period of one year prescribed by section 3, is..........of this provision is not made available in respect of a counter claim made by way of set off in a suit instituted by the agriculturist himself. this position is made clear by explanation 1 to section 3 which states that:' 'suit' does not include a claim to a set off made in a suit instituted by an agriculturist.'going by the strict terms of section 3, it is clear thatthe bar imposed by the section is to the effect thatfor a period of one year from the commencement ofthe act, the creditor should not institute any legalproceedings for the recovery of a debt due froman agriculturist and not that the creditor should giveup his claim against such a debtor.since the bar is against the institution of legal proceedings within a specified period, it is obvious that the question whether the.....
Judgment:

Sankaran, J.

1. The plaintiff in Section C. Section 76/54 on the file of the Subordinate Court at South Malabar is the petitioner. His suit is for money due under a promissory-note dated 19-9-1951 executed in his favour by the defendant for a sum of Rs. 590. The defendant, claiming himself to be an agriculturist as defined in the Madras Indebted Agriculturists (Temporary Relief) Act, 1954, (Act V of 1954), contended that the suit is not maintainable in view of the provision contained in Section 3 of that Act

This plea of the defendant was upheld by the learned Subordinate Judge who, thereupon, dismissed the suit with costs on 17th September, 1954. The plaintiff seeks a revision of that order on the ground that the Subordinate Judge acted in excess of his jurisdiction in summarily dismissing the suit.

2. The simple question for decision in this case is whether the scope of Section 3 of the Madras Indebted Agriculturists' (Temporary Relief) Act, 1954, is such as to completely absolve the agriculturist debtor from his liability to pay the debt in case the creditor institutes a suit in disregard of the mandate contained in that section. I think the answer to this question must be in the negative. It is abundantly clear from the section itself and from the preamble to the Act and also from the other provisions contained in the Act that only a temporary relief tor a limited period, from being harassed by creditors was intended to be conferred by the Act on indebted agriculturists. Section 3 runs as follows:

'No suit for the recovery of a debt shall be instituted, no application for the execution of a decree for payment of money passed in a suit for the recovery of a debt shall be made, and no suit or application for the eviction of a tenant on the ground of non-payment of a debt shall be instituted or made against any agriculturist in any Civil or Revenue Court before the expiry of a year from the date of commencement of this Act.'

The section as it is applicable to suits merely states that no suit for the recovery of a debt shall be instituted against any agriculturist in any civil or revenue Court before the expiry of a year from the date of commencement of the Act. It is significant to note that the benefit of this provision is not made available in respect of a counter claim made by way of set off in a suit instituted by the agriculturist himself. This position is made clear by Explanation 1 to Section 3 which states that:

' 'Suit' does not include a claim to a set off made in a suit instituted by an agriculturist.'

Going by the strict terms of Section 3, it is clear thatthe bar imposed by the section is to the effect thatfor a period of one year from the commencement ofthe Act, the creditor should not institute any legalproceedings for the recovery of a debt due froman agriculturist and not that the creditor should giveup his claim against such a debtor.

Since the bar is against the institution of legal proceedings within a specified period, it is obvious that the question whether the proceedings are hit by the section, has to be determined on the basis of the particulars disclosed by the papers placed before the Court at the commencement of the proceedings and not on the basis of any later decision which may be arrived at by the Court after investigation into the matters in controversy between the parties.

In other words, if a plaint in a suit, on the face of it, discloses that it is really a suit for the recovery of a debt from the defendant who is an agriculturist the bar under Section 3 will operate. The procedure to be followed in such a case is that indicated by Rules 11 and 12 of Order VII of the Code of Civil Procedure. Clause (d) of Rule 11 states that the plaint shall be rejected 'Where the suit appears from the statement in the plaint to be barred by any law.'

Rule 12 states that 'Where a plaint is rejected under Rule 11, the Judge shall record an order to that effect with the reasons for such order.' The right of a fresh suit in respect of the same cause of action is expressly saved by Rule 13 which states that 'the rejection of the plaint on any of the grounds herein before mentioned shall not of its own force, preclude the plaintiff from presenting a fresh plaint. In respect of the same cause of action.'

In the present case the learned Subordinate Judge was not acting under Rule 11 of Order VII while dismissing the suit. He could not also proceed under that rule because the plaint did not concede or disclose that the suit was against an agriculturist entitled to the temporary relief under the Madras Indebted Agriculturists' (Temporary Relief) Act. Thus the plaint as presented in Court was not affected by the bar imposed by Section 3 of the Madras Indebted Agriculturists' (Temporary Relief) Act and the Court was therefore right in accepting the plaint and registering it as a suit.

At a later stage when the defendant entered appearance and contended that he is an agriculturist as defined in the Act, the plaintiff had to admit that position as correct. Section 3 which merely states that no suit for the recovery of a debt shall be instituted against an agriculturist before the expiry of one year from the date of commencement of the Act, could not come into operation at that stage because the suit had already been instituted and the same had been admitted and registered by the Court. It has to be noted that the section does not state that the suit instituted for the recovery of a debt from the defendant, who might later on be found to be an agriculturist, will be unsustainable and will have to be dismissed. The procedure to be followed in respect of such a suit is that indicated by Section 4 of the 'Agriculturists' Relief Act of 1954. Sub-section (1) of that section is in the following terms: 'All further proceedings in suits and applications of the nature mentioned in Section 3 in which relief is claimed against an agriculturist, not being proceedings for the amendment of pleadings or for the addition, substitution or the striking off of parties, but otherwise inclusive of proceedings consequent on orders or decrees made in appeals, revision petitions, or applications for review, shall subject to the next succeeding sub-section stand stayed until the expiry of a year from the date of commencement of this Act:

Provided that, in regard to properly under attachment, the Court may pass such orders as it deems necessary for the custody or preservation of the property or for the sale of such property if it is subject to speedy or natural decay or, if in respect of it, tbe expenses of custody or preservation are considered excessive.'

Sub-section (2) states that

'On application made by the defendant or the respondent or by all the defendants or all the respondents, as the case may be, the stay effected by Sub-section (1) in a suit or application shall be dissolved and the suit or application shall he proceeded with from the stage which had been reached when further proceedings in the suit or the application were stayed.'

Section 4 is couched in general terms so that the stay as contemplated by the section may be ordered in respect of suits of the specified category instituted prior to the commencement of the Act and also in respect of suits instituted subsequent to the commencement of the Act. It is clear from a reading of Sections 3 and 4 together that the Legislature only intended to afford. protection to an indebted agriculturist against all legal proceedings for recovery of the debt due by him for the limited period of one year, but not to free him from all liability for that debt.

This inference gains strength from Section 5 of the Act which provides for the exclusion from the normal period of limitation applicable to such legal proceedings, the period during which such proceedings are held up by force of Section 3. A creditor who, believing in good faith that his debtor is an agriculturist, refrains from instituting legal proceedings against the debtor during the period of one year prescribed by Section 3, is given the benefit of Section 5. It is equally possible that a creditor, believing in good faith that his debtor is an agriculturist as defined in the Act, may institute a suit ror the recovery of the debt due to him, though it may later on be found that the debtor is realty an agriculturist.

There is no express provision in the Act authorising the dismissal of such a suit merely for the reason that the defendant is seen to be an agriculturist. On the other hand, as already pointed out the jurisdiction conferred on the Court by Section 4 of the Act is to order a stay of further proceedings in the suit during the period specified in the section. I it follows therefore that the learned Subordinate I Judge acted illegally and in excess of his jurisdiction in summarily dismissing the plaintiff's suit at the stage when it was found that the defendant is an agriculturist within the meaning of the Madras Indebted Agriculturists' (Temporary Relief) Act.

3. Learned counsel for the respondent has cited the decision in Palanichami Chettiar v. Reliance Bank of India, Ltd., 1956-2 Mad LJ 1 (A) in support of his contention that the learned Subordinate Judge was right in dismissing the suit The question that arose for consideration in that case was whether an application for rateable distribution filed in execution of a decree for recovery of money due from an agriculturist, was an application for execution hit by the provisions of Section 3 of the Madras Indebted Agriculturists' (Temporary Relief) Act.

The question was answered in the affirmative and the application for rateable distribution was dismissed. The view taken in that case appears to be that a suit or an application filed in contravention of Section 3 has only to be dismissed and that the provision contained in Section 3 is clearly to that effect and, as such, there is no justification for examining the Statute as a whole to find out the real intention of the Legislature in enacting Section 3.

With all respect I have to dissent from the view that Section 3 contains a mandate that a suit or an application hit by that section has to be dismissed. It has already been pointed out that the only effect of that section is to suspend legal proceedings against an agriculturist debtor for a period of one year from the commencement of the Act and not to negative the claim of the creditor. I have already explained the procedure to be followed by the Court in respect of a suit or an application by a creditor for the recovery of a debt due from an agriculturist.

4. in the result, this revision petition is allowed with costs and in reversal of the decree of the lower Court, the suit is restored to file for fresh disposal in accordance with law and in the light of theobservation made above. For that purpose the records will forthwith be sent back to the lower Court.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //