S.B. Majmudar, J.
1. The petitioners who are residents of village Nana Anklewalia in Lakhtar taluka of Surendranagar District, have preferred this petition under Article 227 of the Constitution of India, seeking to challenge the appellate order passed under the provisions of the Gujarat Rural Debtors Relief Act, 1976 by the appellate authority confirming the original order passed by the Debt Settlement Officer, Surendranagar in favour of respondent No. 1. A few facts leading to this petition may be stated at this stage.
2. Respondent No. 1 filed an application under Section 6(1) of the Gujarat Rural Debtors Relief Act, 1976, (herein-after referred to as 'the Act') before the debt settlement officer Surendranagar on the basis that he is a marginal farmer within the meaning of the term given in the said Act The said application was registered as case No. Adesh, Lakhtar 18.93 and it was filed against petitioner No. 1 Mansangji Kalyansang and two others namely Piribhai Tarabhai and Hiralal Maganlal. However, by a compromise purshis, Ex. 4, the said respondent withdrew his case against Pirbhai Tarabhai and Hiralal Maganlal and proceeded with the case only against petitioner No. 1.
3. During the pendency of the proceedings before the debt settlement officer, it was pointed out by petitioner No. 1 that the mortgage in question was executed by the respondent in favour of petitioners Nos. 2 and 3 herein, who were respectively his son and nephew. It appears that no notices were issued to these two petitioners by the debt settlement officer during the course of the inquiry conducted by him. But petitioner No. 2 voluntarily appeared and gave his statement. The debt settlement officer thereafter passed his order on 22-12-1978 and held the respondent to be the marginal farmer and it was further held that he was indebted to the tune of Rs. 10,900/-. He was absolved from the liability to pay the said debt.
4. The petitioners, being aggrieved and dissatisfied by the aforesaid order of the debt settlement officer, preferred an appeal before the appellate authority. The said appeal came to be dismissed and the appellate authority directed the petitioners to hand over possession of the land to the respondent. It is, thereafter, that the petitioners have preferred this petition.
5. Initially notice pending admission was issued by P. D. Desai, J. on 8-9-1980 and ad interim relief as to possession was granted. Record and proceedings of the case were called for and thereafter on 23-9-1980, P. D. Desai, J., admitted the petition to final hearing and granted interim relief against dispossession of the petitioners.
6. The respondent has filed his affidavit-in-reply.
7. Mr. D. D. Vyas, learned Advocate appearing for the petitioners submitted before me that the order of the debt settlement officer suffers from two patent illegalities viz., even though the petitioners Nos. 2 and 3 were interested in the mortgage security, they were not joined as parties before the trial authority nor were they given any opportunity to have their say. In any case, so far as petitioner No. 3 is concerned, there was nothing on record to show that he was given an opportunity-to have his say in the matter, or to lead his evidence. Mr. Vyas further submitted that the second infirmity which stares in the face is that the debt settlement officer has mentioned in para 2 of his judgment that on 23-10-1978, statements were recorded of the creditor as well as debtor in the presence of each other. But the record does not show that on 23-10-1978, any statement of creditor Mansang was so recorded. It, therefore, appears that inquiry conducted by the debt settlement officer was not in accordance with law and was absolutely perfunctory in nature and has resulted violation of the principles of natural justice. Mr. Vyas next submitted that no opportunity appears to have been given to the petitioners to cross-examine the respondent-debtor and hence also, the proceedings before the debt settlement officer were null and void. He lastly contended that the appellate order has been passed in the most perfunctory manner by the appellate authority and the main contentions raised by the petitioners in the appeal have not been dealt with by the appellate authority. He finally submitted that the appellate authority had no jurisdiction while dismissing the appeal of the petitioners, to pass any further adverse orders in the matter in absence of any cross-appeal by the respondent and to direct the petitioners to forthwith hand over possession of the mortgaged property to the respondent. The said direction in the appellate order, submitted Mr. Vyas, is totally ultra vires and is liable to be quashed.
8. Mr. Raju, learned Advocate for the respondent, on the other hand, combated the aforesaid contentions and submitted that there was no infirmity in the proceedings before the debt settlement officer. That even though the order of the debt settlement officer does not show that petitioners Nos. 2 and 3 were joined as parties, they had remained present before the debt settlement officer at the relevant time and if they did not choose to cross-examine the debtor, it was their own choice. Moment they remained present before the debt settlement officer, the question of not joining them as parties would pale into insignificance and principles of natural justice cannot be said to have failed on that count. He further contended that so far as petitioner No. 2 is concerned, he gave written statement Ex. 11 not only on his behalf but also on behalf of petitioner No. 3 and he stated what he wanted to say in the matter. So far as petitioner No. 3 is concerned, it is true that the record does does not show that he had remained present and given any statement of his own. But according to him, the affidavit-in-reply which has been filed by the respondent in the present proceedings clearly points out in para 8 of the affidavit that all the petitioners had remained present on 23-10-1978 before the debt settlement officer and if they had not thought it fit to cross-examine the respondent, they cannot be permitted to contend now that principles of natural justice have been violated by the debt settlement officer. He further contended that so far as the appellate order is concerned, it is an order confirming the decision of the trial court and hence, it was not required to be an exhaustive one and so far as the direction as to handing over of possession of the mortgaged property is concerned, it was merely a consequential direction and, therefore, it cannot be said that the appellate authority had acted ultra vires its powers under Section 13 of the Act while issuing such consequential direction, once it was of the view that the order of the debt settlement officer extinguishing the debt of the respondent was justified in the light of the facts established on the record. In short, he contended that this was not a case for interference under Article 227 of the Constitution as substantial justice was done between the parties.
9. Having given my anxious consideration to the rival contentions urged by the learned Advocates of the respective parties, I have come to the conclusion that the order passed by the debt settlement officer and as confirmed by the appellate authority suffers from a patent error of law and involves failure of the principles of natural justice and consequently both these orders are required to be quashed only on this limited ground without expressing any opinion on merits and the proceedings are required to be remanded to the debt settlement officer for a fresh decision on merits in accordance with law and in the light of the directions which I propose to give in later part of this judgment. In order to appreciate the grievance of the petitioners regarding failure of principles of natural justice, it is necessary to note a few relevant provisions of the Act. Under Section 6 of the Act, a duty is cast on the debtors and creditors to furnish particulars of debt to the local authority. Sub-section (1) of Section 6 provides thus:--
'Every debtor shall, within such period as may be prescribed, furnish to the local authority within whose jurisdiction he ordinarily resides, a true statement in respect of every debt due by him on the appointed day to his creditors'.
Amongst these, he has to give name and residence of the creditor and if there are joint creditors, the names and residences of all joint creditors. He has also to mention the place where the creditors reside. Equally, a duty is cast on the creditors of the debtor to furnish requisite details as laid down by Sub-section. (2). Under Section 7, the authorised officer of the local authority has, on the basis of the statements received under Section 6, to prepare or cause to be prepared a statement in prescribed form showing the names and residences of all the debtors and creditors from whom statements under Section 6 have been received, description of the debtor as to whether he is a marginal farmer, small, farmer, rural artisan or rural labourer and other details as laid down by Section 7. Thereafter follows Section 8 which provides for an inquiry before the debt settlement officer and the powers of such officer to hold inquiry. Sub-section (1) of Section 8 provides:--
'Any debtor or creditor who has any dispute to raise against any of the particulars mentioned in the statement published under Sub-section (2) of Section 7 may, within the period specified in the notice published under that Sub-section make an application in writing to the debt settlement officer having jurisdiction in the area in which the debtor concerned ordinarily resides, stating the grounds of his dispute against the particulars'.
Sub-section (2) of Section 8 provides:
'On receipt of an application under Sub-section (1), the debt settlement officer shall serve a notice in such form and in such manner as may be prescribed upon the other party, requiring him to be present before the Debt Settlement Officer for the purpose of being heard in connection with such application on a date specified in the notice and on all subsequent dates to which the hearing of the application may from time to time be adjourned by the Debt Settlement Officer'.
Under Sub-section (3) of Section 8, the Debt Settlement Officer shall, after calling for such further information or particulars in relation to the debt in question, if necessary, and after making such inquiry and following such procedure, subject to any rules made in this behalf, by the State Government, as in his opinion, the circumstances of the case seem to require, pass requisite orders as laid down by Section 8. Sub-section (3) (i) and (ii), Section 13 provides for an appeal against the decision or order of the Debt Settlement Officer and the appeal has to be preferred in such manner and with such officer appointed by the State Government for the purpose of hearing appeals under the Act in such local area. Sub-section (2) of Section 13 provides-
'The appellate officer may, after following such procedure as may be prescribed and after giving the parties an opportunity of being heard, either confirm or modify the decision or order made by the Debt Settlement Officer or direct the Debt Settlement Officer to take such action as the Appellate Officer thinks fit'.
Sub-section (3) of Section 13 gives finality to the appellate decision. Section 2 (j) defines the word 'prescribed' as prescribed by rules made under the Act. Section 28 of the Act empowers the State Government by a notification in the official gazette to make rules for carrying out the purpose of the Act. Sub-section (2) of Section 28 lays down various topics on which such rules can be framed without prejudice to the generality of the foregoing power under Section 28 (1). Section 28 (2) (g) refers to the form and manner in which notice under Sub-section (21 of Section 8 shall be served upon a debtor or a creditor; while as per Section 28 (2) (h) the inquiry to be made and the procedure to be followed under Sub-section (3) of Section 8 is mentioned as a topic on which rules can be framed. Under Section 28 (2) (k) is indicated the topic pertaining to the procedure to be followed by an Appellate Officer under Sub-section (2) of Section 13 in exercise of its rule-making power, the State of Gujarat has framed rules named and styled as Gujarat Rural Debtors' Relief Rules, 1976. Rule 10 provides for form of notice under Sub-section (2) of Section 8 and manner of service of such notice. It lays down that the notice under Sub-section (2) of Section 8 shall be in form IX and such notice shall be individually served upon the other party and also by affixing a copy of fhe same on the conspicuous part of the residence of such party. Rule 11 provides for inquiry and procedure to be followed under Sub-section (3) of Section 8. The said rule lays down that for the purpose of inquiry and procedure under Sub-section (3) of Section 8, the procedure provided for summary inquiries under the Bombay Land Revenue Code, 1879 shall be followed by the Debt Settlement Officer. Rule 14 deals with procedure to be followed in appeal under Section 13 (1) by the appellate authority. Sub-rule (11 thereof lays down that an appeal under Section 13 shall be made within thirty days from the date of order or decision of the Debt Settlement Officer. Sub-rule (2) of the said rule provides that the appeal shall be made in the form of a memorandum and shall state the grounds clearly and precisely. Under Sub-rule (3) it is provided that the appeal snail be made on payment of a fee of rupees ten in the form of a court-fee stamp affixed on the memorandum of appeal. In Sub-rule (4) of Rule 14, it is provided that when an appeal under Sub-section. (1) Section. 13 is received by the Appellate Officer, he shall issue notices, by registered post or by personal service through the local authority having jurisdiction, to all the necessary parties to the appeal, calling upon them to present their case before him on a date to be specified in the notice and on all subsequent dales to which the hearing of the appeal may, from time to time, be adjourned. Sub-rule (51 of Rule 14 is not relevant for our purpose.
10. In the background of the aforesaid statutory provisions, the scope and ambit of the inquiry under Section 8 of the Act will have to be decided. It is obvious that the inquiry before the Debt Settlement Officer is a quasi judicial inquiry wherein the officer concerned has to take objective decision on facts and has to decide the is between the parties. The inquiry which has been contemplated is a summary inquiry as per the provisions of the Bombay Land Revenue Code, as laid down by the relevant rules framed under the Act to which I have made a reference earlier. It is, therefore, necessary to turn to the relevant provisions of the Bombay Land Revenue Code pertaining to summary inquiry and the manner of conducting it Section 195 of the Land Revenue Code provides that in summary inquiries, the presiding officer shall himself, as any such inquiry proceeds, record a minute of the proceedings in his own hand in English or in the language of the district, embracing the material averments made by the parties interested, the material parts of the evidence, the decision, and the reasons for the same. The proviso to Section 195 lays down that it shall at any time be lawful for such officer to conduct an inquiry directed by this Act to be summary under all, or any of the rules applicable to a formal inquiry, if he deems fit. Under Section 196 of the Code, it has been provided as under-
'A formal or summary inquiry under this Act shall be deemed to be a judicial proceeding within the meaning of Sections. 193, 219 and 228 of the Indian Penal Code, and the office of any authority holding a formal or summary inquiry shall be deemed a civil court for the purpose of such inquiry'.
It has been further provided in Section 196 as under:--
'Every hearing and decision, whether in a formal or summary inquiry shall be in public and the parties or Their authorised agents shall have due notice to attend'.
11. The aforesaid provisions of the Land Revenue Code laying down the procedure of summary inquiry would fee applicable to the inquiries conducted by the debt settlement officer in exercise of his statutory power under Section 8. It will, therefore, be a quasi judicial inquiry wherein evidence can be led and an objective decision on facts in issue has to be rendered. The basic principles of natural justice and fair play have got to be followed by the debt settlement officer. In the present case, Mr. Vyas has pointed out two basic infirmities in the judgment rendered by the debt settlement officer. Para 2 of the order of the debt settlement officer shows that on 23-10-1978, statements of respondent debtor as well as creditor Mansang had been recorded in the presence of both of them. Still, curiously enough, record of the case which was called for verification does not show that on 23-10-1978 any such statement of petitioner No. 1 creditor was recorded by the debt settlement officer. It is also clear that before the debt settlement officer, it was contended by petitioner No. 1 that the mortgage in question was executed in favour of his son and his nephew. Even the statement of respondent-debter, Ex. 5 pointed out that the document was executed in favour of Ratubha and Chhanubha. In spite of this factual position, no notices seem to have been issued to the concerned interested parties who were mortgagees of the land in question, Mr. Raju is right when he contended that in spite of this initial infirmity Ratubha, petitioner No. 2 had appeared before the debt settlement officer and hence that infirmity did not have any vitiating effect. Still, the fact remains that so far as other mortgagee Chhanubha Harisang is concerned, there was no indication from the record of the case that he was ever served with any notice and he even appeared before the debt settlement officer and put forward his contentions, Mr. Raju was at pains to point out that in the affidavit in reply filed before this court, the respondent has stated in para 8 that on 23-10-1978, all the three petitioners had remained present and had not chosen to cross-examine the respondent. In the present petition under Article 227, the orders of the lower authorities have got to be scrutinised in the light of the record which existed before them. No addition can be made to the existing record in the present proceedings under Article 227. Even otherwise, the averments made in the affidavit-in-reply in para 8 that oh 23-10-1978, all the three petitioners had remained present before the debt settlement officer is not borne out from the order of the debt settlement officer himself, as in par 2 of his order, it is stated that on 23-10-1978, statements of the debtor and creditor Mansang were recorded in the presence of both of them. Implicit in this averment is the fact that no one else was present, otherwise the officer would have noted the said fact in his order. It, therefore, appears clear that no notice was issued by the debt settlement officer to the interested parties viz. petitioners Nos. 2 and 3 and that infirmity may not have any fatal effect so far as absence of notice to petitioner No. 2 Ratubha is concerned, as he himself waived the service of notice and appeared before the debt settlement officer. So far as other interested party viz. petitioner No. 3-Chhanubha is concerned, the record of the case does not indicate that he remained present before the debt settlement officer at any tune till his decision, and consequently, the proceedings before the debt settlement officer must be held to be contrary to the principles of natural justice and fair play so far as petitioner No. 3 is concerned.
12. Mr. Raju is right when he contended that when the statement of the debtor was recorded, it was for the creditor to cross-examine the debtor if he wanted to do so. But because he has not cross-examined the debtor, it cannot be necessarily inferred that cross-examination was refused to him. Still however, it is desirable that the. debt settlement officer while exercising his statutory powers and functions under Section 8 (2) takes the minimum safeguard of pointing out to the concerned parties their right to cross-examine the other side and to make a clear note about the same in the proceedings so that no scope for any confusion or doubt or misunderstanding or any future contention in that regard may survive. As seen above, the debt settlement officer acting under Section 8 has to follow the procedure of summary inquiry as laid down by Sections 195 and 196 Of the Land Revenue Code. It is, therefore, necessary for the debt settlement officer to observe the following procedure to avoid any possible contentions regarding alleged infirmity in the procedure adopted by him. (1) Proper Rojkam should be maintained indicating the events that take place from time to rime during the cours of the inquiry: (2) when the statements of the concerned parties, on oath, are recorded at the time of inquiry, it should be mentioned whether the other side has declined cross-examination of the deponent in cases where cross-examination is not found to have taken place; (3) During the course of such inquiry, when it appears or is brought to the notice of the debt settlement officer that in addition to the parties already on record before it there are other persons either interested in the security involved in the dispute between the creditor and the debtor, or are in any manner likely to be adversely affected by the decision of the debt settlement officer, notices should be issued to such interested persons and they should be brought on record of the proceedings as parties and they should be given an opportunity to have their say and to lead whatever evidence they want to offer. These basic safeguards would plug the loopholes in the inquiry and will avoid possible infirmities in the inquiry and would insulate it from future attacks on tha ground of procedural flaws.
So far as the appellate proceedings are concerned, the appellate authority even while confirming the decision of the debt settlement officer, must briefly note its reasons for rejecting the contentions of the appellant. The appellate order must show that the appellate authority applied its mind to all the relevant contentions urged on behalf of the appellant and must refer even in brief, the reasons for rejecting these contentions. It is trite to say that if the appeals are allowed, more detailed reasoning to displace the findings of the debt settlement officer has got to be given. So far as the contention of Mr. Vyas that the appellate authority had issued ultra vires direction calling upon the creditors to forthwith restore possession of the mortgaged property to the debtor is concerned, it must be noted that Section 13 (2) empowers the appellate authority to direct the debt settlement officer to take such action as he deems fit. If the direction concerns taking of consequential action by the debt settlement officer in the light of his own finding that the debt in question is extinguished it cannot be said that the said direction is totally ultra vires the powers of the appellate officer. Under Section 14 (2), once the order of discharge of debt is found to have been passed under Section 8, the statutory consequence thereof follows and the property pledged or mortgaged would automatically stand released in favour of the debtor and the creditor has to forthwith return such property to the debtor. Once the appellate authority confirms the finding of the debt settlement officer to the effect that the debt in question has got discharged, direction regarding handing over of possession would automatically follow. It is a statutory consequence of the order of discharge for which a debtor is not required to file a cross-appeal and there is ample power with the appellate authority under Section 13 (2) to direct the debt settlement officer to take such further consequential action of putting the debtor in possession of the mortgaged property which stands released in favour of the debtor. It is, therefore, not possible to agree with Mr. Vyas that the direction issued by the appellate authority to that effect was ultra vires his power. But as I am accepting the basic contentions of Mr. Vyas that the proceedings before the debt settlement officer were contrary to the principles of natural justice as indicated above, the impugned order will have to be set aside only on this:ground and the inquiry will have to be restored to the file of the debt settlement officer with a direction to proceed with the same in accordance with law after giving an opportunity to all the three petitioners as well as to the respondent to have their respective say in the matter and after following the procedure laid down by law, to pass a fresh order on merits in the matter. As fhe proceedings are pretty old, it is directed that the debt settlement officer viz. respondent No. 2, shall dispose of the remanded proceedings in accordance with law as soon as possible preferably within four weeks from the receipt of the writ of this court and the record of these proceedings at his end. Rule is accordingly made absolute to the aforesaid extent with no order as to costs.